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Tag: 10X Companies

  • Why top companies need not be the most innovative?

    Jim Collins in his book titled “Great By Choice” shares startling insights which goes to prove just this.

    The iconic brand South West Airlines copied the entertainment aspect in its brand from its once famous competitor named Pacific Southwest Airlines.

    It was sheer discipline that made Southwest survive the test of time and Pacific Southwest Airlines extinct.

    The same holds good with Amgen wherein its competitor Genetech innovated and created patent after patent but still failed to survive in the long run.

    Thus 10X or high performing companies were not necessarily most innovative

  • What happens when the aggressive growth strategy is not sustainable?

    Let us a look at the following 10X high performance organizations(highlighted in bold)vs their competitors who were outclassed in the long run

    1. Stryker vs USSC
    2. Southwest Airlines vs PSA
    3. Progressive Insurance vs Safeco
    4. Intel vs AMD
    5. Amgen vs Genetech

    Be it AMD , USSC or the other players one common link which made all these companies go out of market was their lack of discipline when it came to framing their growth strategies.When the ride was smooth they aimed for non sustainable levels of growth which eventually led to their downfall when the environment started getting unfavorable for e.g. recession , slowdown etc.

    The disciplined “20 Mile March” approach during thick and thin not only enabled the 10X companies survive but be profitable as well during the hard times.For e.g. immediately after 9/11 in 2001 all airline companies reported huge losses barring SWA which reported profits in 2002 as well.

    Truly “Fanatic Discipline” when ingrained in the mannerism of an organization and the “20 Mile March” approach works consistently year on year nothing can stop the company from leaving behind a legacy.

    Adopted from Jim Collins’s book titled “Great By Choice”.

  • Seven characteristics of a good “20 Mile March”

    A balanced year on year growth strategy which is born out of fanatic discipline of 10X companies has been termed as the “20 Mile March” in the book titled “Great by Choice” by Jim Collins.

    Such a strategy takes into account the fact that we need to respect “unforgiving environment” when the tide is rough for e.g. recession , slowdown etc. and hence pegs the growth figures to an achievable mark fully mindful of the fact that in the infinite game of business not always  the environment will be friendly.

    Seven characteristics of a good “20 Mile March” are as follows:

    1. Clear performance markers
    2. Self imposed constraints esp. to settle for lower growth rates when the tide is smooth
    3. Appropriate to the specific enterprise
    4. Largely within the company’s control to achieve
    5. A proper time frame
    6. Imposed by company on itself
    7. Achieved with high consistency

  • Three Reasons why “The 20 Mile Marchers” always beat competition

    Adopted from Jim Collins’s book titled “Great By Choice”

    “20 Mile March” is a term coined in his book to explain why 10X companies have won over their competitors by being slow and steady , in the infinite game of business.

    The three reasons why such a strategy helps to fight against all odds during difficult times has been mentioned below:

    1. Builds confidence in ability to perform during adverse conditions
    2. Reduces likelihood of catastrophe when hit by turbulent disruption
    3. Helps to exert self control in an out of control environment

  • How do “high performing” companies overcome uncertainty?

    “The 20 mile march” or the disciplined and consistent year on year growth plans of high performing companies , impose order amidst disorder , consistency amidst uncertain environment.

    This sense of “fanatic discipline” manifested in the form of the well thought out growth plans sacrifice the enticement of aiming for greater growth when the tide is smooth.

    Better known competitors of these 10X companies have fallen by the wayside because of  a lack of discipline.These are companies who have aimed for higher and higher growth when the tide has been smooth.As a result of such unplanned growth attempts they have failed to survive during difficult times for e.g. slowdown , recessions etc.

    These are times when the sense of discipline of these 10X companies have enabled them not only to survive but be profitable as well.

    Think of 9/11 attacks in 2001 , outclassing all competitors , South West Airlines still managed to be profitable in 2002

    Adopted from Jim Collin’s book titled “Great By Choice”

  • What is meant by “The 20 Mile March”?

    Adopted from Jim Collins’s book titled “Great By Choice”.

    10X companies meaning high performing companies have a common pattern of following “The 20 Mile March” growth approach.

    By this is meant an approach wherein the leaders in such companies define a growth rate which is ethical , reasonable and not too aggressive.This would mean defining a ceiling and floor in terms of the growth rate.

    “Fanatic discipline” is required to be able to peg the growth rate to a ceiling when the times are good.By not falling prey to such enticement would ensure that when the tide is rough e.g. recession the company would be able to be profitable and meet targets when lesser companies would fall apart by the wayside.

    “The 20 Mile March” has been a common pattern noticed in great companies which have survived the test of time for e.g. South West Airlines , Intel , Amgen , Stryker etc.