Every day people examine news, sharemarket performance and other factors looking for signs and explanations for shifts in valuations for companies, businesses and assets.

Their search leads to mountains of books, articles and electronic data feeds. Only a few sources are insightful, reliable and free of bias. Even fewer focus on Australia.

One useful book on increasing company performance and valuations is The First XI. It is written by four Australian authors who have either an academic or consulting background or a combination of both. The lead author is Professor Graham Hubbard, currently Head of Adelaide Graduate School of Business. Hubbard.

Prof Hubbard and his co-authors apply rigour to answer this question: What is it that winning organisations do which gets them above-average performance over the long term?


Their answers are not startling or new for readers familiar with books and articles on management. This is a good thing and we’ll discuss why this is so.

A major reason why this is a good thing is that it avoids an all too common game in management literature. In that game, an author talks up an allegedly brand new concept. It is presented as a theory for everything. We’ve seen that since the 1990s with words such as “re-engineering”, “leadership” and “blue ocean strategy”. It’s resulted in a stream of books debunking management gurus and junk management literature.

The First XI was first published in 2001 by John Wiley & Sons. As a testament to its success, a second edition appeared in February 2007. The second edition has marketing support from Fairfax Books. The preface is written by Fred Hilmer, CEO of Fairfax publishing from 1998 to 2005 and now Vice Chancellor of the University of New South Wales. All this helps make the book a significant business book by Australian book marketing standards.

In 2001 the book’s methodology gave it a head start in its first edition. The authors examined 199 firms in Australia before identifying 11 that met their criteria of achieving above-average returns for 10 to 15 or more years. The  logos of the first 11 appear in the GRAPHIC accompanying this post.

"first_xi_winning_wheel_framework" Their research followed the methodology or track of prior US-centric works which we’ll mention shortly. Fortunately not included among the 11 are – Ansett, OneTel, Compass or HIH Insurance – all Australian companies which have died this decade.

Professionals can work top down or bottom up. The top down approach begins with theory and moves to practice, it focuses on developing high-level frameworks to explain what goes on in business. The bottom up approach learns from experience, it focuses on concrete problems, drawing lessons from specific case studies to work out what to do. Both approaches are needed.

A strength of the First XI is that it combines both a top down and a bottom up approach. The 2007 edition adds information on the performance of the first 11 organisations between 2001 and 2006 (going bottom up from company performance experience). It then moves to develop a theory to explain why the 11 have been successful (going top down, looking for common patterns).

"first_xi_australian_characteristics"In working top down, one of the noteworthy elements of The First XI is its chapter titled “Comparing our findings with other studies.” It provides additional reasons why it is a good thing that the discoveries of the book are not startling.

The message is that broadly speaking the performance of the 11 organisations in The First XI can be explained in ways already covered by the US-centric management literature which inspired The First XI.

These US books are In Search of Excellence (published 1982), Built to Last (published 1994) and Good to Great (published 2001).

  • "first_xi_asx_performance"To illustrate, at page 383, we find this: “Overall, apart from the leadership chapter oversight, there is nothing our findings conflict with in a major way in the In Search of Excellence study. There is considerable agreement between the findings. Given the 20 year time difference between the studies, this is itself interesting and encouraging.”
  • Then at page 384 there’s this: “Overall, apart from BHAGs [Big Hairy Audacious Goals] and the apparent ‘people’ oversight, there is a large degree of agreement between the two studies. Our study covers all the issues that Built to Last covers and we also include elements that were not covered in that study. Nothing else we found is in conflict with Built to Last.”
  • Then on the same page as regards Good to Great the conclusion is “Once again, overall there is little disagreement.”

Very early in the book there appears a useful statement on the foundations of the book’s research. The authors cite the Australian references at the end of this post and they say they lead to this question: “Which are Australia’s high-performing organisations and why? (page 3)

Unfortunately, the answers The First XI provides are under whelming in many ways. For example, like the vast majority of US or Australian business books it fails to address the needs of small and medium-sized enterprises, let alone micro businesses or start-ups. Experience in practice shows that the needs of the meek are very different from very large or transnational corporations, about which books and papers continue to proliferate. The number of books about big business vastly exceed the number of good books on small business. This distorts perceptions about the reality faced by small business.

But there’s at leat three reasons to recommend The First XI.

First, it uses the “winning wheel framework“. This is a useful central organising concept structuring the book, chapter by chapter. This framework is tested against the first 11 Australian organisations in the study.  The framework is set out in a GRAPHIC accompanying this post.

Second, the book confirms that Australian conditions are different from overseas. They are different in many ways even from relatively familiar territory such as the business environments of the United States. Some of those differences are set out in another GRAPHIC in this post.

The third good feature of the book is its focus on implementation of theory. As we’ve noted, the theory largely links to the Australian references below plus the US books – In Search of Excellence, Built to Last and Good to Great. Along the wayThe First XI dismisses many popular and media fixations present in Australia, for example:

  • Winning is NOT about great breakthrough ideas. To quote: “Winning is the outcome of a lot of decisions and activities, not one, and not just luck.” (page 12)
  • Winning is NOT about  charismatic or high-profile leaders, while personalities sell news stories they can’t build an organisation on their own. Indeed what is required is more than people. To quote The First XI: “While organisation success or failure is often attributed to the CEO, the reality is that in truly winning organisations there are whole groups of people, coupled with systems and processes, that are difficult, even boring, or impossible to write about in the popular press.” (page 12)
  • Winning is NOT about profits alone. “The reason for this is that profitability is only one of the measures of organisational performance.” (page 12)
  • Winning is NOT about marketing promotion. “The product has to be right before you put it into a nice package and promote it.” (page 13)

This third point is also illustrated in a GRAPHIC in this post. It sets out the sharemarket performance for the first 11 from 1980 to 2001 which brings us back to where we started on the path to discovering what winning organisations do which gets them above-average performance over the long term.


Note on graphics:

All the graphics in this post are taken from electronic documents in websites featuring work by some or all of the authors of The First XI. In our firm we extensively use management graphics. Some are featured or discussed in our following posts: Are managers from Earth and lawyers lost in space? and Industry clusters build competitive advantage.

Australia Management References:

Graham Hubbard, Delyth Samuel, Graeme Cocks & Simon Heap, The First XI: Winning Organisations in Australia (John Wiley & Sons Australia, Sydney, 2007)

Australian Quality Council, Australian Business Excellence Framework.

Pappas, Carter, Evans and Koop/Telesis, The Global Challenge: Australian Manufacturing in the 1990s (Australian Manufacturing Council, Melbourne, 1990).

Australian Manufacturing Council and Manufacturing Advisory Group (NZ), Leading the way – a study of manufacturing practices in Australia and New Zealand, ( Australian Manufacturing Council, Melbourne, 1992)