How great companies get that way

04/10/2013 | Harvard Business Review

A statistical study of companies by the authors of a Harvard Business Review article has identified three elementary principles that make companies exceptional. The first two: "Better before cheaper -- in other words, compete on differentiators other than price" and "Revenue before cost -- that is, prioritize increasing revenue over reducing costs." The third rule: Change anything necessary to follow the first two rules. The authors studied companies trading on U.S. exchanges from 1966 to 2010 using a performance measure of return on assets and identified top performers. Exceptional companies included 3M, WD-40, McDonald's, cafeteria chain Luby's, IBM and information technology company Syntel. The key to their success appeared to be consistency in applying the first two rules.

View Full Article in:

Harvard Business Review

Published in Brief: