What It Takes: Seven Secrets of Success from the World's Greatest Professional Firms
Summary
Charles Ellis, who founded the consulting firm Greenwich Associates and has advised professional firms for decades, examines what distinguishes a small number of professional service organisations that have sustained excellence over long periods.
His subjects are firms including McKinsey, Goldman Sachs, Cravath, the Mayo Clinic and a small number of others, and his method is to identify what they share. The characteristics he finds include: extreme selectivity in recruitment, with acceptance rates far below what the firms could fill; a culture of mission that the members genuinely hold rather than state; investment in developing people that exceeds what a short-horizon calculation would justify; the willingness to decline work and clients that do not fit, including profitable work; internal candour about performance; and governance arrangements that select leaders from within on the basis of demonstrated values rather than by seniority or by producing revenue.
Ellis argues that these characteristics reinforce each other and that no single one is separable. He also argues that firms lose the position by making individually defensible compromises, which is the same drift argument Mandis makes about Goldman specifically. The book is admiring and its firm selection is on the outcome, which is the standard problem with this method: it cannot distinguish the characteristics that produced excellence from those that accompanied it. The observations about recruitment selectivity and about declining work are the most concrete.
Key takeaways 7
- The firms Ellis examines are far more selective in recruitment than the number of positions requires.
- Declining profitable work and clients that do not fit is a practice these firms maintain and most firms cannot.
- Investment in developing people exceeds what a short-horizon financial calculation would justify.
- Leadership is selected from within on demonstrated values rather than by seniority or by revenue production.
- Ellis argues these characteristics reinforce each other and that adopting any one alone produces nothing.
- Firms lose the position through individually defensible compromises rather than through any decision to change.
- The firms are selected on the outcome, so the method cannot distinguish causes from accompaniments.
Who should read it
Leaders of professional service firms who want the practices that a small number of durable institutions share, treated as observation rather than proof.
About Charles D. Ellis
Founder of Greenwich Associates; chair of the Yale endowment investment committee; author of 'The Loser's Game'
His 1975 essay 'The Loser's Game' is the primary source that reframed active management as a negative-sum contest, and the argument is still cited verbatim.
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