Today, Eileen Fisher, the company, operates nearly 70 retail stores, which generated between $400 and $500 million in revenue in 2016. 31 It's a supplier to many other clothing retailers and has consistently been recognized as one of the best companies to work for. Unlike the businesses featured in Chapter 3 that faced enormous failures, the company has enjoyed continuous growth and thoughtful, productive change, unblemished by financial, legal, or safety failures. Its management practices and governance structures have created a showcase for psychological safety.

Our Stanford colleagues Perry Klebahn and Jeremy Utley made the “add nothing unnecessary” philosophy a cornerstone of their ten-week LaunchPad class. As we said in chapter 3, more than a hundred companies have been founded by LaunchPad students since 2010, and more than 50 percent are still alive in some form. Perry says each founding team is taught to experiment with one or a few narrow prototypes at a time and to assume they won’t be able to predict which offerings customers will want. That means most teams will need to keep abandoning and changing offerings before creating an offering that customers want and will pay for—and will generate enough revenue over the long haul to build a company. As a result, Perry and Jeremy teach students not to take or to delay, many steps that other entrepreneurial classes and investors preach as essential for starting a company. For example, many start-up experts recommend writing a detailed business plan to help founders flesh out and explain their product or service, financial model, target market, and backgrounds. Perry and Jeremy do teach students to keep iterating a three-to-five-minute pitch, because potential investors, employees, and customers will want to know what your company does. Perry and Jeremy also coach strategic inaction, because they believe that writing a detailed business plan is useless or worse. That’s because the company’s offering (and target customers) will almost certainly keep changing. Founders who work hard on writing a perfect plan, Perry and Jeremy argue, waste time that is better spent prototyping, iterating, and learning. And—since labor leads to love—all that effort can cause founders to become irrationally attached to bad early ideas. Perry and Jeremy aren’t alone in their dim view of business plans. A study of seven hundred start-ups led by David Kirsch of the University of Maryland found no relationship between the quality of business plans and whether start-ups received venture-capital funding. Carl Schramm, economist and author of Burn the Business Plan, argues that Amazon, Apple, Facebook, and Microsoft never had business plans, and “empirically, it appears as if you don’t need a business plan.” In short, before you heap some burden on people and eventually figure out that it wastes their time (or worse), slow down and ask, “Suppose we did nothing?

On June 15, 1971, The Washington Post Company went public at $6.50 per share (adjusted for a subsequent 4-for-1 split). When Kay stepped down as CEO on May 9, 1991, the price was $222, a gain of 3,315 percent. During the same period the Dow advanced from 907 to 2,971, an increase of 227 percent.” Now that I have studied Graham’s life and leadership, my own assessment is that she stands as one of the absolute best examples of a leader who took a company from good to great, with some of the gutsiest business leadership decisions of all time.

For acquisition, he shared, “We would look at almost anything that came up within the industry for sale, and we had four factors that drove our decisions. One, we would only buy number one or two share brands in their category. We did not believe we could take a dying brand and turn it around. Two, we wanted to buy businesses that had higher gross margin than out company average, so would help our gross margin. Three, we looked for asset-light companies. We didn’t want to buy a company with lots of factories or ones for which we’d have to build new factories. We preferred to bring operations into our own facilities. And four, we went for products that had some sort of advantage versus the competition that we could leverage with our marketing, sales, and operations muscle to make better.” That formula guided the well-measured acquisition of numerous leading brands during his tenure, including Spinbrush, OxiClean, Orajel, Batiste, and Vitafusion. These were businesses that his own business leaders had the expertise to run, and he folded them into Church & Dwight’s existing operations. Focusing on employees with R&D expertise, they kept, on average, only 10 percent of employees, many of whom joined the team at headquarters. “We doubled the size of the company,” he reported, without adding substantially to the number of employees.

To optimize opportunities for leaders it wants to bring in and retain in its fold, Blackstone has pioneered by actually creating a company for two standout talents. The firm perceived an opportunity to build a company for Thomas Staggs and Kevin Mayer to lead. Both men had been passed over to succeed Bob Iger at Disney. First, the firm bought Reese Witherspoon’s company, Hello Sunshine, and then they added children’s entertainment Moonbug and Exile Content Studio, creating Candle Media, with Staggs and Mayer as cofounders and co-CEOs.