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Superstar Companies: Two Points of View

OHuge businessman goes across the townn September 13, 2016, we published a book entitled “Creating New Superstars: A Guide to Businesses that Soar above the Sea of Normality.” A few days later (September 17, 2016) an independently created “special report companies” appeared in The Economist entitled “The Rise of the Superstars.” What are the differences between our Superstars and those of The Economist, and how do our views differ?

The Economist report defines Superstars generally as very large and powerful companies: “a handful of corporate giants … generating unparalleled wealth for a small number of people and exercising growing control…” We, on the other hand, define Superstars as only those specific, large, Fortune 500 companies that have been growing exponentially for at least a decade. Thus, our Superstars are an exclusive sub-set of the companies considered by the Economist. Yes, they are giants, but more important, they are unique because of the exceptionally high growth they have been able to sustain over time, despite their large size.

To be more specific, the Economist’s list of Superstars includes corporations such as Exxon Mobile, General Electric and Johnson and Johnson and more—older, very large companies that over time have been slowly increasing in revenues and market capitalization. Our list of Superstars and almost Superstars is much more limited. Only Apple, Amazon, Alphabet, Facebook, Genentech, Amgen, and Gilead Sciences meet our criteria. These are relatively young, technology based companies with sustained exponential growth in revenues. Yes, the Economist list also includes these companies; but in our opinion, putting both types of companies in the same “basket” leads to an apples and oranges comparison. Thus, some of the Economist’s conclusions and insights are different from ours.

And there is another fundamental difference. The focus of our book is on creating new, exponentially growing Superstars, now and in the future. The focus of the Economist is on the evolution and survival of the current “super powers.” This leads to a much stronger emphasis on technology and science (what we call Launching Pads) and on creativity in our book, and more of a focus on excellent management and mergers and acquisitions in the Economist. To say it another way, we focus on sources of exponential growth, and the Economist focuses on expanding corporate power.

And yet, even with the differences, we and the Economist share several key insights:

— Technology is pervasive and transforming everything in today’s world.
Technology and globalization are key driving forces for creating corporate giants.
There is often a symbiotic relationship between Superstars and new start-ups or other small companies.
Superstars must keep undergoing radical and disruptive change to thrive.

Are giant companies good or bad? The Economist directly addresses this question, while we chose not to consider it. However, we do explore the potential impact of developing technologies and areas of science on business and hence humanity.

If you are interested in learning more about Superstars and the impact of technology, our book, “Creating New Superstars: A Guide to Businesses that Soar above the Sea of Normality,” is available in both paperback and kindle formats from amazon: http://amzn.to/2iQyWRP

The Economist Special Report about corporate giants is available as a pdf file at: http://www.economist.com/sites/default/files/20160917_companies.pdf

 

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