Merck & Co., Inc. (MRK), Abercrombie & Fitch Co. (ANF): An Interview With Michael Raynor

That one really surprised us, because if we were going to find an exception, we would have thought we’d have found it there. But we didn’t.

Brendan: What do you think is the big takeaway from the book? What do you want people to learn after reading?

Michael: I guess, first of all, just those rules; that these are ways of thinking about hard choices. They are ways of identifying in which direction you want to be moving consistently over time, using the rules to help you make difficult decisions in the face of ambiguous data.

I think we have this mythology, somehow, that if we collect enough data and analyze it enough, the right answer will invariably fall out, and the world just doesn’t work that way. There is inevitable and inescapable ambiguity.

Some people think that decision-making biases are a bad thing. In the face of ambiguity, the only way you can make a decision is if you have a bias. What our data show, I think, is “Here are the right biases to have.”

When you’re making choices about how to create value, Better Before Cheaper. When you’re making choices about how to drive profit, Revenue Before Cost.

Brendan: Michael Raynor, coauthor of The Three Rules: How Exceptional Companies Think. Thanks so much for your time.

Michael: It’s been great. Thank you.

The article An Interview With Michael Raynor originally appeared on Fool.com.

Brendan Byrne has no position in any stocks mentioned. The Motley Fool recommends Linear Technology. It recommends and owns shares of Johnson & Johnson and Whole Foods Market (NASDAQ:WFM).

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