一帮华尔街的分析师写的书，可读性还是非常不错的。每个公司的研究都追踪了数十年，其中的沉浮曲折真是令人唏嘘，虽然没有第一人称传记的那种生动感，但完全的路人视角也其实挺有意思的，总结出来的道理不难却感到十分关键。照例做些摘要。
One of the great lessons of this project is that successful people and successful businesses usually prefer to be out of the limelight. In that context, we are grateful to the family of Brian Jellison, who allowed us to tell his story, and to the leaders who worked beside him at Roper. Same with Danaher, which has an amazing story, and we are thrilled that the company trusted us to tell it.
There’s nothing that destroys a culture faster than wasteful spending and celebrity behavior among the executives. Every example of corporate failure we know about included exactly that.
低调、远离聚光灯，潜龙在渊对于成功的作用和道理，中外都一样。
Companies usually fail because of the incompetence and arrogance of a complacent management team, not because they struggled to predict the future.
很有意思的视角，失败往往不是源于对未来的误判，而是团队的自大和无能。
A healthy and supportive culture is absolutely critical to any company’s long-term success. But we’ve found it to be a by-product of actions and incentives, not a driver. Said a different way, it can’t be force-fed from the top. It’s not about words—it’s about actions. Most companies that talk about culture don’t have one, at least not a good one. Culture doesn’t come from a mission statement or a CEO’s webcasted lecture. Culture is encouraged from the top but is actually built from the bottom—on the factory floor or in the cubicles where the actual work gets done.
这段企业文化的描述相当精辟。文化是行动的副产物，是一种自下而上的结果，不是字面的宣讲。
While these and other chapters offer colorful details on individual leaders, the stories emphasize the need for discipline, often with the help of proven business tools, to prevent people from getting caught up in the enthusiasms of the moment.
纪律性对大公司老板来讲是相当重要的，要有实际的辅助工具，以免被冲昏头脑。不少老板的专断其实不是问题，问题是被冲昏头脑之后缺乏工具和纪律性来回到正轨。这点太重要了，要有刹车。
GE
Welch exited slower-growth, more competitive businesses like mining and replaced them with higher-growth, often higher-tech areas such as specialty plastics. He wanted businesses with the potential for concentrated market share. His motto became “Fix it, close it, or sell it.”
韦尔奇的战略并不复杂，高增长、高收益业务逐步替换掉竞争更激烈的矿业业务。所有业务要么改善好、要么关掉、要么卖掉。
In aviation, the product typically sells for low margins (in fact, often at a loss), but the manufacturer makes a lot of money providing service and spare parts over the long life of the engine.
Utilities could turn it on in a flash as a “peaker” unit on hot summer days. Or they could run it as base-load power 24/7 in an economical “combined cycle” in which excess heat powered a steam turbine. That versatility, along with increasingly cheaper natural gas, made it cost competitive with coal, and with far less environmental impact. The F series became the gold standard for gas turbines for two decades, and GE gas turbines now generate a third of all the electricity in the world.
Healthcare, in contrast, was a growth business without dominant players, but which needed extensive investment and engineering expertise.”
飞机业务大都一开始不赚钱，毛利很低，靠后面的服务和配件来实现长期受益。燃气轮机的业务核心是好用，加上价格比燃煤还有竞争力。医疗是个好业务，没龙头，增速好，还依赖大规模投资和技术。
In 2000, the company had an eye-popping P/E ratio (price to earnings ratio) of 40x, more than double the market’s average over time (at 17x in early 2020). And if you adjusted out the unsustainable part of the earnings algorithm (i.e., pension and one-time gains), that ratio was likely closer to 60x—insanely expensive for a mature company.
as GE Capital began its expansion, Welch had discovered that financial services offered a lot of discretion in declaring gains and losses. When GE’s core businesses had slow quarters, he could balance them out with strong results from Capital and vice versa.
GE的高光时刻，40x-60x PE，妥妥的高估。
BOEING
Aerospace companies and their government sponsors have long pushed the limits of engineering and exploration, often to great technical success. A new airplane costs billions of dollars to develop and remains in service for upward of 30 years. Massive fortunes are at risk, and there is little room for error. For most of Boeing’s history, technical achievement was synonymous with financial mediocrity. Cost, schedule, and business risks were usually secondary or tertiary considerations.
飞机业务真是不容易，伴随着技术突破的 同时往往是财务陷入泥潭。这个新技术早期需要大量投资，但销售毛利较低时分不开的，真不容易。所以未来的长期收益也十分应该了。
An analysis of a half century of aircraft development programs suggests that bets on new aircraft pay off and make money only half of the time. The other half of the time, poor sales, low production volume, or technical problems and delays lead to significant losses. As a result, until 2010, the industry hadn’t consistently generated acceptable levels of profitability. We estimate that from 1970 to 2010, Boeing generated a paltry average profit margin of just over 5 percent in the airplane business.
好痛苦的生意，赌新机型的结果是只有一半能赚钱。。。还非常高技术、非常有难度，技术和利润真是不对称啊
In just six years following the merger with McDonnell, Boeing went from controlling nearly three-fourths of the market to occupying a slight minority position versus Airbus.
收购麦道后的6年，波音就从75%的市场份额掉到了50%以下。读Bilnd fly的时候更细唏嘘。
Besides the R&D expenditures associated with the program, the company lost an additional $28 billion manufacturing the 787 before the first “profitable plane rolled off the line in 2016. This brought total cash out the door to roughly $50 billion, making the 787 investment a bet that was twice the size of the company’s entire market value at the time of its launch in 2003. Despite significant technological advances, robust sales, and a product that ultimately was well received by the customer, the 787 was by far the biggest financial failure in the company’s history. Along the way, it ended the careers of numerous executives and put the company’s financials under enormous strain.
787的巨大成功背后居然是巨大的财务失败，公司投入了500亿美元，2x市值。搞飞机真难啊。
IF A LITTLE IS GOOD, MORE MUST BE BETTER, RIGHT?
In the wake of Boeing’s success in expanding profit margins and cash flows, there was a palpable desire to determine what else could be achieved in the future through an expansion of similar efforts. The company launched PFS-2, asking suppliers not just for lower prices but also for more lenient payment terms in new contracts. The move effectively leveraged Boeing’s negotiating power to shift more value away from the supplier base and into Boeing’s pockets and further fueled the cash flow growth it had promised investors.
压榨供应链这么简单的事波音此前居然无比克制，真是良心公司，不过这一天迟早还是来了，后来还更极端了。
That’s also true for many companies in the tech world. Most of them are engineering- and product-centric, and as their markets mature with slower growth and normal profitability, they’ll have to confront the same challenge of ensuring profitability without jeopardizing safety and customer value. Additionally, while Big Tech doesn’t grapple directly with safety risks and the loss of human life, issues of customer privacy and social influence are similarly meaningful and only growing in significance.
技术公司经常遇到的难题：维持利润和保持安全和客户价值。今天互联网巨头遇到的隐私问题如出一辙。
DANAHER
It has fully exited nearly all its initial industrial assets and even spun off its dental platform—a testament to its leaders’ determination to gravitate capital toward higher-return opportunities while fading those in the maturity curve. In the process it created several valuable “mini-Danahers,” notably Fortive ($25 billion market cap), which houses Danaher’s original industrial assets, and Envista ($5 billion market cap), which has the dental assets.
从没想到丹纳赫居然是一家PE，或者另一家伯克希尔哈撒韦。更难得是成就了一堆公司！
The Rales brothers founded Danaher with a strategy akin to today’s private equity firms, in that they believed in buying and improving existing businesses, rather than seeding them from scratch. They were young men with limited experience in any real business, and they had limited access to capital. In hindsight they must have had guts. It was long before failure was considered “a learning experience.”
They started in real estate where they saw the power of compounding and leverage. By the early to mid-1980s, real estate investing had become very popular, while manufacturing was considered to be on a path to extinction, catalyzed by rising Japanese competition and unfavorable US labor relations. Despite that, they saw a bigger opportunity in manufacturing.
“The concepts are simple but require constant tweaking and experimenting. Everything depends on the organizational push for small improvements every day—not big goals with giant leaps, but small changes that all employees can rally around, with a commitment to measurement and tracking. Doing this correctly and over time is challenging.
早期的PE，就是不做孵化，不去赚孵化的钱，而是去赚把公司培育大的钱，这个逻辑在今天的VC/PE中都不是非常清楚很清晰。我们需要更加清晰，确实是两件事，术业有专攻，需要更加聚焦！
Much of Culp’s success can be traced to three important initiatives: (1) He worked with the board on a portfolio of businesses that exploited all the powers of DBS. (2) Unlike leaders who prefer to hire those who aren’t a threat, he increased the organization’s focus on talent and surrounded himself with people who would keep up with his fast pace. (3) He pushed DBS deeper into the organization. He and his colleagues developed an expanded toolkit touching every facet of the company.
Culp wanted process in everything. He wanted no waste. Emails had to be to the point, with only the necessary folks cc’d. To prevent bureaucracy creep, he limited most meetings to 30 minutes, often done while standing. Simple visualization tools were encouraged, and daily management was emphasized.
成功是有方法的。方法还都大同小异，也并不复杂。读书越多，越有这样的感受。
His first big deal was the purchase of Pall Corporation, which makes filtration products for biotechnology companies, and at $14 billion was Danaher’s largest transaction ever at the time. Joyce went on to buy high-flying Cepheid, a maker of molecular diagnostic equipment, for $4 billion. And in early 2020 he took on GE’s Biopharma division, ironically from his former boss, Culp, who had gone on to run that conglomerate. That one had a whopping $20 billion price tag that takes Danaher deeper into the high-growth biotechnology space.
从过滤设备到分子诊断，再到GE的生物医药资产，丹纳赫的收购成就了今天的地位。
he narrowed down the focus to eight core metrics. Just four were financial: organic growth, margins, cash flow, and ROIC. Another two of the metrics related to the customer experience: on-time delivery and quality measured by defects/million. And the last two involved people: internal job fill rate and retention. Danaher still uses these eight simple metrics to measure manager performance and benchmarks across the organization and within specific regions, metrics we would consider a best practice overall. (See Figure 4.7.)
八个核心指标的方法，今天依然值得学习。今天大家面临的问题主要是选择太多、需要关注的太多，不好判断哪个真正重要。能收到这几个指标上，看似简单但实际十分不易。
Insiders also credit Comas with fine-tuning Danaher’s M&A diligence and integration processes. When Danaher acquires a company, it usually replaces the CFO and immediately tracks the metrics that cross-compare with those of other Danaher businesses. Comas made a point of asking, “Now that the deal is closed, please tell us everything that you failed to tell us during diligence.” He believed that things always go wrong in a deal; what distinguishes the good from the bad deals are the speed and permanence of the fixes. He put the people and processes in place to make sure the bad news traveled more quickly.
收购完立即换掉CFO，跟进指标，找到坏消息。
DBS is real. It focuses employees, it drives positive outcomes, and it facilitates a culture that encourages leaders to develop the next generation and leave before their effectiveness declines. It pragmatically embraces external hires and the tools they often bring from prior workplaces. Danaher says it is a shameless adopter of others’ best practices, because DBS isn’t good enough, never will be good enough, and will always have to change.
Danaher believes that project management requires some form of visual aid, and that regular (but short) meetings should be held in front of the visual aid. For example, every Danaher acquisition has a war room with timelines, maps, and checklists. Responsibilities are clearly noted, and if someone is falling behind, the red ink denotes that as an area of focus. Bad news travels fast, accountability is maximized, and the successful completion of tasks is noted. The feedback loop is nothing that email or Excel could accomplish. Visual management is a simple yet powerful tool.
好思路也需要好工具来指导，更加视觉化冲击的方式。
Next, we want to emphasize the power of compounding. At Danaher, it’s multidimensional. Compounding via pure operations creates increments of productivity that add up over time: processes that can add low-cost capacity to factories just by making small process improvements and freeing up factory space, while helping employees get a little bit better at their jobs every day. Compounding via financial engineering is powerful as well—doing smart deals, bringing acquisitions into the culture successfully, improving the asset, and paying off the associated debt. This all creates a powerful flywheel effect. Compounding via DBS—making the business system itself better over time by incorporating tools learned from others, while constantly modernizing the core tenets, is foundational to Danaher’s success.
复利，要从各个方面持续提高。经营、财务、内部管理，都是可以创造复利的地方。
Honeywell
From an operations perspective, Cote was an amazing tactician who balanced the long and short term perhaps better than any other leader in American corporate history. He “failed fast” before it became a familiar business concept, while driving deep change in the organization.
快速失败，快速试错的价值非常大。Bezos也是类似思路。
Honeywell dates back to 1886, when Albert Butz commercialized an innovative thermostat for coal furnaces, founding the Butz Thermo-Electric Regulator Company in Chicago.
The merger of AlliedSignal and Honeywell is a useful lesson in the limitations of traditional deal analysis. These were two solid companies with substantial aerospace operations and little direct overlap. Yet the organizations had very different cultures: Honeywell favored creativity, while AlliedSignal pushed for strict engineering discipline.
GE had valued Honeywell at $55 per share; when Cote took over 16 months later in February 2002, it had fallen to $35, finally bottoming in late 2002 near $18. Beyond a failing stock price, employees continued to rush for the exits, customers noticed a sharp falloff in product quality, and bondholders began to get nervous. Honeywell was spiraling downward.
霍尼韦尔从煤炉温度计起步，收购到险些被收购，估价还从收购时的55跌到了1/3，进入至暗时刻。
Most important to the longer-term turnaround, he introduced Lean manufacturing and began to measure and pay for progress, incentivizing continuous improvement. The Honeywell Operating System started within the four walls of the factory floor well before it spread to the wider organization. The beginning targets were basic and centered on inventory turnover, defect rates, and on-time delivery. He combined that system with the vision of a renewed Honeywell with new products, modernized factories, and expansion into emerging markets.
The turnaround consisted of five components: (1) taking out costs, (2) developing new products, (3) fixing the portfolio, (4) expanding in emerging markets, and (5) doing a financial overhaul. These were about equal in importance, and Honeywell addressed them all as quickly as it could—not exactly an easy exercise.”
日本公司的精益管理方法最终拯救了不少美国公司，美国人的粗旷管理时代过去了。
UTC
Incentives drive outcomes in an organization. At UTC, corporate incentives and a focus on improving margins led to many years of success, followed by several years of failure. The rise and fall of United Technologies highlights that the best incentive systems are not static or myopically focused; they should exhibit the same dynamism as an organization’s ever-evolving set of opportunities and risks.
持续追求毛利也是把双刃剑，可以带来成功，也可以带来失败，事无绝对。核心是度。
The automotive segment had the lowest margins in the corporation and didn’t enjoy the same upside potential, or “runway,” as the other operating units.
Roughly a decade into David’s tenure, it wasn’t yet evident to external observers that things in the organization were beginning to change for the worse. However, on the inside, there were growing questions around the sustainability of the efforts being taken to push margins higher. Principal among these concerns was underinvestment in new products and technologies, as R&D projects were being shelved in favor of maintaining or expanding shorter-term profits.
Many inside the company later argued that this golden era of profitability and growth was the perfect time to be reinvesting in the next generation of products that could set the company up for long-term success. However, the organization and its leaders were largely oriented around a 10 percent earnings growth target that was only feasible if margins continued to move higher. Margin expansion was core to the company’s success and its managers’ paychecks.
Some of this margin differential was understandable, as the company possessed the largest collection of installed and serviceable elevators on the planet. Since service sales feature the highest margins, this pointed to a margin premium of a few percentage points. The rest of the difference came from lower spending on new products and a focus on selling high-end elevators rather than lower-margin, entry-level products. This focus kept margins high but resulted in the company ceding significant market share to competitors in the world’s fastest-growing new elevator market, China.
Finally, at the aerospace units, Pratt’s more than doubling of margins was helped by skipping the investment in the next generation of aircraft engines.
追求毛利的后果之一就是投资不足，以未来增长为代价。或者过度依赖高毛利的服务业务，都不好。指标必须综合，有长期视野，长短期利益平衡好。
Chênevert’s thinking on the future of UTC’s end markets was influenced by the power of “megatrends”—the expansion of the global middle class, the urbanization of global populations, and secular growth in air travel demand. This was similar to David’s “gravity, weather, and war” characterization, as both pointed to long-term growth. Together with investments in talent, Chênevert believed these trends formed the backbone of the UTC investment story.
Megatrends，抓住真正的大趋势。
For organizations large and small, it’s nearly impossible to find singular metrics that appropriately drive the needed behavior across organizations, especially over extended periods of time. Business conditions, competitive dynamics, product/technology cycles, and talent availability are all dynamic variables. Compensation and incentives for executives and managers should be as well. Few companies do this well. It requires a thorough examination of the particular opportunities and constraints that an organization faces over both the short and long term and the courage to shift course when internal and external conditions change.
企业活的越久，需要经历的变量越多，真是要小心应对。
CATERPILLAR
Caterpillar’s experience illustrates the depth of the problems that can arise when a systematic culture and operating system isn’t present in a large organization. Without that, a company is forced to try to manage by feel, using forecasting and intuition to guess demand. In a cyclical industry, staying true to Lean is even harder, but also more important. There are some booms and busts in the end markets in this case study, but they aren’t the focus. Rather, it’s how CAT dealt with them and how that accentuated the volatility.
真是打死也不敢相信卡特彼勒这么大的公司居然是靠感觉和猜测来管理，而不是系统的经营和文化。这样落后的管理思路下恶果是自然的。
Another problem is that customers sometimes lie or spin the truth to suit their own needs. During the upturn in commodities, one of CAT’s mining customers infamously told the company it could buy every truck CAT could make for several years.
Recessions, poor management, and inflexible labor had driven International Harvester, the largest machinery company in the world, into bankruptcy in that decade. CAT lost $1 million a day for two years in the 1980s.
拖拉机是个周期性行业。更需要好的管理体系来度过危机。
At the end of the day, CAT simply hadn’t invested in the capacity to come anywhere near meeting this simultaneous growth in demand in its end markets. Fracking customers bought engines from Cummins instead. CAT’s capacity shortage thus let a competitor into a business where CAT had been the primary, most trusted supplier. More important, CAT hadn’t gained control over the aspects of the business that were within its power, making the situation much worse. Otherwise loyal customers went elsewhere, not just to Cummins in fracking but also to Cummins in power generation sets and to Komatsu in mining.
投资不足、预测错误、押错周期简直是所有悲剧的来源。
By 2004, 15 years of underinvestment had weakened the company. Unlike some companies, CAT did generate enough cash to have invested more, but not enough money flowed to the factories to secure future growth.
CAT’s mining business had a broad product lineup, but it was too weighted toward mining trucks and bulldozers. Komatsu and other mining equipment manufacturers had shovels as well as trucks, a pretty obvious synergy. The shovel scoops up dirt and dumps it into a truck.
矿山设备这块，卡特彼勒果真是看不到推土机和矿车之外应该搞搞装载机吗？虽然这么写，但我不觉得。
The strategic fit was quite attractive; yet Burritt’s only comment on my presentation was that assets don’t come cheap, and CAT had no desire to overpay. Instead, CAT rival Bucyrus bought the Terex assets for $1.3 billion in 2009.”
ROPER
Roper’s unconventional CEO, Brian Jellison, saw the market for M&A stuck in an old paradigm—one that undervalued true cash flow, misunderstood the future capital needs of asset-intensive businesses, and overlooked hidden potential liabilities like healthcare, environmental, and pension costs. Jellison’s vision itself was basic—focus on generating cash flow, invest that cash flow opportunistically, and employ capable leaders to run newly acquired assets. He articulated a framework for success and then got out of their way. Sound familiar? It’s perhaps closest to the strategy employed by Warren Buffett. Not exactly a new model, but shockingly underutilized.
关注被低估的现金流强劲的公司！市场有时候是无效的，否则就不会有这么多机会了。
Roper found comfort in remaining off the radar, focusing on the day-to-day power of compounding returns and letting the results speak for themselves. No advertising budget or PR campaign. Just a quiet and steady focus on the power of investing cash flow in higher-return assets and using those cash flows to reinvent its portfolio from its cyclical industrial roots to a higher-return, more predictable software future.
Flying under the radar often meant margins twice what the main suppliers earned, and the overall investment needs were limited and easier to cut back on in recession periods. The factories were smaller, closer to the customer overall, and focused on final assembly. Jellison also saw the big players increasingly interested in larger, splashy M&A deals. Smaller, niche assets (sub-$500 million and even sub-$100 million) garnered more attractive prices. In addition, he saw that smaller company managers were usually more intimate with their businesses overall and respected within their organizations but had not been incentivized appropriately.
好机会并不复杂，高毛利、低投入，强现金流。但也有其局限，不是大生意。这其实是个权衡和选择。
The very highest P/E multiples are at companies whose business models have few physical assets to maintain and high margins on that low asset base. Companies with low asset intensity and high margins typically generate lots of cash. And companies with these characteristics that also grow are particularly attractive, as each incremental dollar of growth drives returns even higher. This is a concept Jellison called CRI—cash return on investment—and its correlation with valuation was central to his vision. The best example of a high-CRI sector would be software. The best example of a low-CRI sector would be automotive.
CRI，关注现金回报，虽然保守却是好生意。
He had three requirements: (1) lower asset intensity than ROP’s existing portfolio, (2) good businesses within niche industries, and (3) excellent management. He would walk away from any deal that lacked all three.”
“By the end of 2004, less than 2½ years into the job, Jellison had already done $1.5 billion in deals, taking a sub-$600 million revenue company that he inherited in 2001 to one that did $1.5 billion in 2005. He accomplished this while maintaining a minimum 50 percent gross margin threshold with operating margins in the high teens, nearly tripling cash flow from $100 million to $250 million—all while decreasing the asset intensity and volatility of the company overall.
神奇的两年半，投资15亿，收入从6亿涨到了15亿，现金流涨了2.5倍。
“He found it insane that a company like GE would sell a high-margin, high-cash asset like NBC Universal for 10x EBITDA (analogous to cash flow), only to turn around and buy capital-intensive and cyclical assets in oil and gas for prices exceeding 12x EBITDA. Capital-intensive semiconductor companies traded for the same valuation as low-capital-intensity software assets. Healthcare equipment was valued as highly as healthcare IT software. It made no sense to him.
汝之蜜糖，彼至砒霜的最好案例了。GE追求大规模，追求大增长，看不上细分市场；Roper追求现金回报、高毛利，看不上重投入和低毛利。
Traditional software companies, like Oracle or Microsoft, generally favored internal new product investment. When they did do acquisitions, they wanted a high-growth profile—certainly above 10 percent, and rarely near the 5 percent ballpark that Roper was more than happy to take. Jellison found the biggest mispricings in less sexy, slower, but still solid growers. These were usually software companies in highly niche markets.
软件细分市场的魅力值得好好研究，这也是个挺有趣的一件事，也有不少机会。5%的低增速不是坏事。
Jellison could take that 5 percent unit growth, and through operational improvement, he could translate it into nearly 10 percent profit growth. He then could utilize cash to purchase similar assets that would add another 5 to 10 percent to the top line, translating over time to 15 to 20 percent annualized profit growth. He did this without using equity and maintaining investment-grade debt.
5%的增长如何变成15%-20%。
The vast majority of Roper’s acquisitions have been small to mid-sized assets, typically owned by private equity, but too small to IPO and off the radar of larger strategic buyers. Most good acquirers know the danger of overpaying, and overpaying almost always relates to having an overly optimistic deal model around the growth of the asset and the ability of its managers to deliver that result.”
Roper does smaller deals relatively speaking, does not do turnarounds, and wants no such postdiligence headaches, because when it closes a deal, it backs off and lets the company run as is, with new incentives usually, but with management intact. Roper wants all the pros and cons out on the table, well before it goes down the bidding path. Easier said than done, but Jellison had a way of finding problems up front and walking away from the transaction. This is perhaps why his hit rate was so high. There was extreme process in his diligence.
小型收购也是考验技术和纪律的。不做重整，不换管理层，只是给新的激励。所有优点缺点都在桌子上谈，极度透明，发现大问题就及时走开，所以成功率才很好。
But he only wanted assets with A-grade management teams. The deals he turned down through the years were more likely due to management deficiency than the asset quality itself.
顶级管理团队执掌的公司。
The risk profile was also lowered, because there was no such thing as “integration risk.” Roper assets are autonomous, never integrated. There are never social or cultural issues, because the existing entity is maintained. There isn’t a mass exodus risk, because managers are locked down before the deal closes. This could be a bigger part of the deal success story than we give it credit.
不做整合，保持独立运行，锁定管理层。
There were a few common problems that Roper saw in its acquired businesses. The first was that high-CRI companies tend to underinvest in sales and marketing and overinvest in the product and in the back office. The high-margin structures helped hide poorly placed jobs. Jellison joked that he saw many companies with more accountants than salespeople, and he would self-fund sales expansion by cutting back-office roles down to the minimum necessary. Many of his assets were so focused on “the product sells itself” concept that they would have only a few sales representatives, who covered only part of the United States. Many of these companies didn’t even attempt to expand outside of large city centers or to think globally. Jellison raised the growth rate just by having more sales coverage.
现金流和高毛利也掩盖问题，对销售和市场投入不够，过多的投入产品和后台。
Profit growth was his preferred metric, which made sense given the types of assets in the portfolio. One thing he never incentivized for was market share. He didn’t want managers to push bad contracts to gain share. He gladly spent on R&D to develop best-in-class products, but the goal was always about compounding value.
关注利润增长，不关注市场份额，这其实是战略选择。
TRANSDIGM
Many of the successful industrial companies we discuss in this book have very formalized businesses systems; TransDigm isn’t one of them. However, any lack of formality is more than made up for by the company’s strict adherence to its core principles of value-based pricing, productivity, and profitable new business.
基于价值定价、生产和利润作为核心原则，无所谓公司怎么组织。真是奇葩。
That’s because almost no one but the maker of the original buckle has ever certified other designs with the Federal Aviation Administration (FAA). As a result, a company named AmSafe accounts for more than 95 percent of the global aircraft seat belt market.
飞机安全带扣的垄断生意。
Investors are inherently skeptical toward most IPOs, especially for companies coming out of private equity ownership. Private equity firms have a reputation for gutting companies and overburdening them with debt before dressing them up for sale to institutional investors that they hope won’t be able to tell the difference.
PE背景的公司名声居然这么臭。国内还没有如此，可能是韭菜还感受不深？
These competitive and regulatory moats make the aviation supply chain home to a lot of good businesses, the best of which make money selling low-cost, relatively high-priced spare parts for the ~30 years that an aircraft is in service.
The highest profit margins in the industrial world are in the aerospace aftermarket.
The average operating profit margin in the global aerospace industry is ~15 percent. TransDigm’s is ~50 percent. (See Figure 9.4.) This is partially based on the purity of TransDigm’s portfolio, which is made up solely of “proprietary aerospace businesses with significant aftermarket content.” There are no bad businesses, which allows the company to enjoy the pricing benefits of being a sole source supplier without dilution from weaker business models. However, it’s also a function of TransDigm’s laser focus on its value drivers.
低成本、高价的垄断产品优势。
TransDigm is remarkably consistent in the application of what it calls its three value drivers: (1) value-based pricing, (2) productivity, and (3) profitable new business. It’s a basic formula that requires masterful execution to get right. What’s proved amazing over the years is how many levels of financial, strategic, and organizational discipline have been simultaneously layered on to achieve these seemingly simple goals to remarkable success.
价值定价的领域，能想到的只有矿机和创新药了，其他的消费品就是iphone、茅台、爱马仕了。这其实才是未来，不能总是基于成本定价。
For every part, TransDigm is maniacally focused on earning an appropriate economic return. That means that as older planes are retired and production runs of spare parts become less frequent and more challenging to predict, TransDigm demands that it be compensated, not just for the direct cost of the part, but for the costs of keeping production lines “hot” with skilled labor and working machinery. ”
TransDigm’s pricing strategy remains sustainable because of three key factors: (1) regulatory, (2) economic, and (3) customer behavior. On the regulatory front, the time-consuming and costly FAA approval process for new parts creates a high barrier to entry.
价值定价方式其实离不开监管，监管是个前提。
In the company’s first 25 years in existence, it acquired more than 60 other businesses (such as AmSafe and McKechnie) and paid $7 billion in dividends. This was from a company that started with four small businesses and an initial equity investment of just over $10 million.
25年间并购了60多家公司，从1000万起步，给投资人分红了70亿，真是传奇。相比之下国内的并购浪潮还远远没开始呢。这其中如果是纯自由市场，应该是大有可为的。
The average company acquired by TransDigm had 20–30 percent margins upon deal closure, but within a few years TransDigm would often pull this up to nearly 50 percent, just by applying the company’s operating model. The financial returns from these deals amplified the profits generated by TransDigm’s core operations. Perhaps most importantly, TransDigm has never done an M&A transaction that strayed from its core competencies or diluted its overall portfolio of assets. In the event that an appropriate M&A deal is not available, TransDigm doesn’t reach; it simply pays out its excess cash as a special dividend and waits for the right deal.
简单、谈定而有效的商业逻辑。收购20%毛利的公司逐步提升到50%，不偏离自己的核心逻辑，实在没有好公司收购就发个特别股息给股东，静静等待下一个机会。
STANLEY BLACK & DECKER
Lean manufacturing is the opposite of all that. The principles of Lean are simple: reduce waste, decrease inventory, and build what is needed quickly, rather than try to anticipate demand.
精益管理的精髓：减少浪费、减少存货、不预测需求、快速生产。
Charlie Munger of Berkshire Hathaway has been quoted as saying, “I think I’ve been in the top 5 percent of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it.” In the case of United Rentals, the incentive puzzle wasn’t hard. Managers had been compensated on growing EBITDA. In other words, they were paid for revenue and profit growth but were not charged for the fleet they owned. That promoted a simple, pro-growth decision: buy more stuff and worry about renting it later. It didn’t encourage managers to wring utilization out of the fleet they already had, since buying another machine might be easier than trying to turn one around in the repair yard faster. This seems like an obvious mistake, but compensation practices are often surprisingly misaligned.
12
In almost every business case we’ve studied, success over the longer term is more often a function of factory floor excellence than of product differentiation. It’s that excellence that drives above-average margins and the related outsized cash generation. Whether that cash is reinvested internally or levered through M&A doesn’t matter, as long as the returns are high enough to stay on the flywheel. But without that cash flow, a company eventually falters, falling further behind peers each and every day. Said a different way, modest product differentiation isn’t considered a game changer by nearly any real customer base. So unless the product differentiation is rather large, manufacturing cost and quality will reign supreme. This was a hard-learned lesson for industrials during their darker era, when globalization began to expose flaws. The ones that failed usually learned this lesson too late.
真是巨难得的经验：好公司的核心是运营抓的好，能够获得高毛利、高现金流以保持飞轮转下去。并不是产品差异化好的不行。也确实，除非产品的差异化足够大，成本和质量这类运营管理就是决定性的。
The strongest industrial cultures that we have seen are Lean based, and the ones most committed to continuous improvement are Lean based. Even if someone tried to copy it, it would already be an outdated version. However, the best practices are clear. Keep it simple: find what is critical to your organization’s success, and then measure and compensate around those metrics. The payoff can be big. The flywheel effect itself assures some level of success, and if proper focus is maintained, it can be quite powerful. And whether you are running a company, searching for a better employer, or looking for investments, it’s relevant for each.
Culture is an output: actions of leadership and incentives drilled into an organization over time.
精益管理基础的企业文化非常关键，文化是个结果，回报也会十分巨大。
But the reality is that meaningful disruption is rare and far more difficult to accomplish than perceived. Most companies do it once, providing the foundation for their existence, and then never do it again at anywhere close to the impact of that foundational event. Setting the expectation that an organization hits a home run on every innovation typically leads to no innovation at all. After that celebrated innovation, the company became so focused on the next big thing that it often forgot to do the small things well.
The reality is that all businesses are founded on some level of disruption, but the vast majority of success comes in the years to follow as products are incrementally improved, manufacturing is dialed in, and markets are broadened or further penetrated. It’s notable that the two most successful companies in industrials over the past two decades, TransDigm and Roper, have no mandate, desire, or effort at all related to disruption. ”
革命性的创新其实非常难，公司能赶上一次就极其幸运了，不要总是期待下一次。而是做好运营，深挖下去，这个革命性的创新本身就可以赚钱100年。
The main idea is to treat cash as investors do: dispassionately looking for the best return, not what builds an empire. Vanity deals never work. Deals done for defensive reasons are also usually doomed. And “game changing” is normally the path to “game over.”
不要试图去通过并购建立帝国，防御性的并购最终都是失败的。
In each case, cash flow was deployed to a higher-growth, higher-margin, more defensible, and higher-return plan, executed over a long enough time period to better manage risks inherent in big change. In that context, goals for market share can be dangerous, as they often drive short-term behaviors (sometimes unethical) with long-term risks.
为市场份额而并购是危险的，主要是过于短视了。
But network effects are isolated to a few disparate examples where they can lead to outsized profits down the road. For 99 percent of businesses out there, pricing a contract at or below cost, or allowing a customer to defer cash payments, brings eventual pitfalls. We find few examples where the strategy actually works past a company’s early disruption phase. Some industrials have succeeded with razor/razorblade models that warrant selling up front at just above cost. But these businesses require long-term service revenue streams protected by intellectual property. More and more, the bloom is off that rose. Network effects can prove fleeting, and the US government has threatened to investigate tech firms that have acquired outsized power with this strategy. Countries in Europe and Asia have promised to follow suit.
网络效应不容易。
The best companies are those that have gone a step further and built something different and new, growth companies that are created around operational competence rather than around a product cycle. Danaher and Fortive operate a wide range of businesses arguably better than anyone else in the world, from professional tools to biotech.
好公司是能建立差异化的，有好的运营能力，而不只是一时产品的运气。
Lessons on what to avoid are clear. Forecasting end markets many years out is a mistake in driving strategic decisions; it’s a well-informed coin flip.
We increasingly look for two markers of success. One is humility, a shorthand way of saying the ability to embrace feedback and change, benchmarking, and a method for generating quality feedback. The other is a well-established process for feedback, which enables continuous improvement, the core of any successful industrial, though one too often trapped on the factory floor rather than spread throughout the organization. Red flags are the opposite: arrogance, overconfidence, and a strategy of managing tightly to targets, as well as strong bets on end markets, or at least high confidence in making them.
成功的标志两个：谦逊，或者建立好的反馈循坏。反之的自大、骄傲、过度自信就是失败的标志了。
Business books talk about strong leadership, but that often gets placed into military parallels, where larger-than-life, loud men shout out commands. That never seems to work in business.
商业书上讲的领导力通常类似于部队式管理，但实际没什么鸟用。