Evaluating Management in Growth Companies

In growth investing, management is not one factor among many. It is the factor. A mediocre management team running an exceptional business will eventually destroy it. An exceptional management team running a mediocre business will eventually transform it.

Why This Matters

Philip Fisher spent more time evaluating management than any financial metric. His scuttlebutt approach — talking to customers, suppliers, competitors, former employees, and industry experts — was designed almost entirely to understand management's character, integrity, and operational capability. Fisher's thesis: superior growth companies are almost always the product of superior management, and the business quality visible in the financials is a lagging indicator of management quality that was evident years before the numbers reflected it.