The Power of the Comparison Analysis
One of the powerful aspects of this research is that it zeroes out systemic factors versus whining factors. What I mean by that is this. Because we’re doing closely paired comparisons, we’re picking companies that are facing the exact same constraints. Any number of our companies were in industries where there were immense constraints outside their control, whether it be interest rates in the case of mortgage banking, whether it be deregulation or regulation in the case of airlines and industries, whether it be unions, whether it be chronic structural issues, whether it be dumping of steel and whether anything gets done about that. Some industries we looked at were just great industries that faced very little in the way of systemic problems. But some of them were very, very difficult industries facing tremendous systemic problems.
Yet, nonetheless, somebody was able to have this breakthrough, not just by metrics of that industry but relative to any sets of companies, outperforming $1 invested in GE under Jack Welch. The other company facing the same constraints didn’t. What we found is that people can often make breakthroughs despite those systemics.
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