Good afternoon everyone. It's great to be here. This is a place I grew up in Oslo. Four amazing companies. Tremendous to hear from. What makes a really great company? This is a fascinating question that I spent decades researching. And one of the things we have done is that we have done three studies published in three books. Built to last, good to great and great by choice. And probably Benedetto probably would take quite a bit of time to read all three books. I hope it's worth your time.

So what are these all about in built to last? What we did was to say what are some of the enduring principles of great companies over the long hall and we studied that in the context of United States and we're looking at those companies that have endured for decades even more than 50 years and we heard from many of them today and we're using cumulative shareholder return over the long haul as a metric compared to the market and industry that they're in and as you can see from this graph many of these rise rose above the crowd to become a truly great company. That was the first study.

In a second study, the question was, can a good company become great? And if so, how? And of course, not all companies are born great. They have to transition like in this hockey stick that you're seeing here. And in the third study, we asked a different question which was in a world full of change and uncertainty like the one we live in today, what do you do as a leader to navigate that circumstance to become a truly great company and attain that kind of extraordinary performance over the long hall.

So these are the studies that we have done and to sit at what we just heard from these four amazing companies into some of this research.

First characteristic that is important is that we have to look over the long term. When we think about what makes for a great company, we're not talking about short-term performance, three years, 5 years, 10 years. We're talking beyond that. That's all of the studies that we have looked at. You have to stand the test of time. And these four companies we just heard from stood the test of time. I plotted them here on the timeline. Utis being the oldest one founded before the American Civil War. Then we have Goldman Sachs also this era back then and Nova Nordisk and the youngest company we just heard from is Ferrari but is more than 100 years old. Why is that important? They have traversed circumstances of hardship, recessions, even a depression, wars, downturns, industry cycle, and yet they have come out great. That's the first characteristic.

The second we have to look for is to ask compared to what. We can't just look at successful companies and say what did they do? In academic research, we call that selecting on the outcome variable of success only and that's a bias. So we have to look at what have they done that was different and better than what industry peers did at the same time. Industry peer that had the same opportunity back in the day to become great but became only merely good or worse. So what we're looking for are principles that separate the great from the good. Let me share a few of those principles and relate them to what we just heard.

So the first principle is that these companies had this duality about them. On one hand they focused on preserving the core core purpose values and principles and we just heard that today. Nova Nordisk about chronic diseases, Goldman Sachs customer excellence and partnership and so forth. It's a very clear purpose that remains stable over time. So that's one part. The other part of the duality is everything else is up for change and progress and relentless innovation like we also heard innovation in Ferrari Nova Nordisk the flywheel of Otus everything done in Goldman Sachs right there's that duality about these two companies now what is interesting is that many companies and leaders they confuse the two what should remain constant and stable over time and what should not.

Here's an example of that many years ago The leaders at IBM decided that they corporate their sales force and employees should dress like their corporate clients. And back in the day, the clients were wearing a suit and a tie. So then the salesforce started wearing a suit, a tie and ideally a blue shirt and that become the matching because they were in a customer service business and the idea was to gain respect and credibility with the clients they served. Good idea. Then years passed by and they started dropping the clients started dropping the suit and the tie and so forth particularly in the tech sector. But the IBM dress code marched on decade after decade until one day a new CEO from the outside Lou Gersonner walked in the door and asked why you dressed like that and they had no good answer because 30 40 years ago it was a good answer but no longer. It had become dogma a practice. That's the way we do things around here. That's kind of culture to dress like that. Of course not. Gerson stopped it. That was a practice that got confused by what was the culture. The culture was customer service. But the practice addressing like that was just a practice that had become obsolete. Leadership implication challenge the status quo. what should change and what should remain stable over time. That's the first principle.

The second principle I'd like to share is this idea that this company had a pierce and clarity about the operating model. And I'm so glad we heard from Otus today because you just provided a fantastic example of this idea. You call it the flywheel. Those of you are familiar with the book Good to Great, you will recognize these three intersecting circles. What this company had going for them was very clear what they can be the best at in the world and that's what we heard today the excellent of Goldman Sachs what Nova Nordis can do Otis can do and Ferrari right you you answer this question but then there is a second question and that is passion that the employees coming to the working for the company feels the passion for the company they feel passion for what they're doing they feel passion for the customer but in mentioned so much about the employees and the passion that they have coming and working at Ferrari. Then the third thing is having that profit model economic engine. And when you answer the three questions, you get an operating model.

Here's an example. Great by choice. We studied Southwest Airlines. This is their business model. Bus on wings. Just to be clear, that's not an actual bus. That's an AI generated image by my slide designer. What does that mean? They figured out that this operating model is going from A to B. No frrills, no luxuries, free seating and so forth. We get you there. Many others that copy this model later on. Historically the most successful business model in in the airline industry in the United States.

Some years ago, the then CEO Howard Putnham described the model. What was the operating model? This is what he wrote in the Wall Street transcript. He said, "This is what we do. Under two hours only, you 737s only quicks 10 minutes at the gate, in and out in 10 minutes. Low fear, high frequency, keep it fun, no interlining, no food, people not mail, no seat assignment, bags, fly free." It's a brilliant articulation of an operating model for an airline. Right? Everybody can understand it. You're that flight attendant. You understand it. Of course, some of these things have evolved over time. You apply fly wells, you evolve it, you expand it, you become better at it. But it's that kind of piercing clarity and what we're about and what we're not trying to do that really makes a difference of these companies.

Third principle driving progress and particularly how did this company drive progress. Here's another company we studied which is progressive insurance in United States and one year they decided that they were looking at the market to enter of insurance for trucks big cars. They did an exhaustive analysis and they figured out this seems attractive and they decided on aggressive investment into that market. Turned out to be a failure and they had to pull back for a variety of reasons. Then a few years later they decided to go into the market for safe drivers. Here they can't the approach was completely different. Let's do experiments. Let's start small. Let's start with a thousand subscribers in Florida. next year Texas and so on. And after three years of experimentation, they then figure out this is how we can make money in this market. We have a good pricing model and then they launched aggressively across the United States. Very different approaches and the key here is that in markets that characterize uncertainty there is a premium of experimentation. experimentation and not just analysis gives you empirical validation for what works.

So these companies we studied and I think we heard it from today of innovation experimentation but in I remember on the podcast when Nikolai you talked about in electric vehicles and how you have experimented with that for several years right it takes like a long time to experiment you got to be patient but doing that creates a culture of experimentation and that's what we saw in these companies and that is that you got to have starting a lot of exper experiments both in products and processes pilots, test marketers, demos, and so forth. Going to kill the bad ones. Then you're going to have the courage to go all in on some of the very good ones and scale it aggressively. This means that you have to have a culture of appropriate risktaking and learning that professor James talked about in the opening remarks. Having that openness to learning and being able to have that culture that drive the progress forward.

So three principles preserve the core stimulate progress a very clear operating model and a premium of experimentation to drive progress.

So what have we not find in some of our research? Well one thing is were these leaders visionaries? No it's not the idea that they could see where the business is going to be 10 years from now. I mean, who can predict where we're going to be 10 years from now in any industry and sort of point the company toward that destination? Absolutely not. We do not see that.

Another one that comes up is this one. Were the leaders charismatic? Well, some were. We saw that today and some were not. It's a nonvariable.

And then finally, what about luck? Maybe this is just a random walk that the great companies that we see are just we're just lucky the right place at the right time. And our answer is no. Why? Because we studied luck. We had these great companies and then we had the merely good one, the average industry peers. And over the long time all these companies had a fair amount of bad luck and good luck. And the question is, what are you doing with that luck? What are you doing with the good luck and seize the moment? And what are you doing to be prepared to weather the storms? And so therefore, let me then close since we're in Norway, a quote by our great Norwegian explorer Ru Ammonson who said, "Victory, um, there we are. Victory awaits the person who has everything in order. luck. Some people call it greatness is not a function of circumstant luck. Greatness is a function of the lead the choices that the leaders have made over time to build a great company culture as we heard from today of these four amazing companies. Thank you.