What happens when the aggressive growth strategy is not sustainable?

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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”

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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

How do “high performing” companies overcome uncertainty?

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“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”?

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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.