When you embrace a 20 Mile March, you have a tangible point of focus that keeps you and your team moving forward, despite market factors leading to confusion, uncertainty, and even chaos.This is how one wins. It’s consistency, stability versus sprint and recover.The 20 Mile March will only work if you actually hit your mark year after year. If you set a 20 Mile March target and fail to achieve it, you may well get crushed by events.

In this episode of the podcast, Brad Giles and Kevin Lawrence talk about The 20 Mile March concept by Jim Collins, and why you should consider it in your business. They list how to use it, and provide examples of 20 mile metrics for your business.

The 20 Mile March is a concept developed by Jim Collins in the book Great by Choice. Enterprises that prevail in turbulence self-impose a rigorous performance mark to hit with great consistency. The march imposes order amidst disorder, discipline amidst chaos, and consistency amidst uncertainty.

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EPISODE TRANSCRIPT

Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.

Brad Giles  00:13

Welcome to the Growth Whisperers where everything we talk about is building enduring great companies, companies that will last, companies that will endure, and that we’ll all be proud to watch grow through their journey. My name is Brad Giles joined today, as always by my co host, Kevin Lawrence. Hello, Kevin, how are things today?

Kevin Lawrence  00:34

Things are great. I know I say that every week, but they generally are. Just had a birthday recently. I don’t like things that are so much about me. But I had a great time with some family and friends. It was good. And again, we’re in the middle of our summer and life is good. I mean, sunshine, where we live in British Columbia, Canada is a great thing. Lots of chances to get out. I just love that it’s bright in the morning. And you know, and getting outside when it’s bright out is what anyway, life is good. How are you?

Brad Giles  01:12

Good. I went on a plane, which may not seem unusual to you. But yeah, it’s a bit of a new concept again here, went over to Sydney for a couple of days workshop with a team there. And yeah, so that was it was pretty good to get back in the groove. And I got back to the hotel. And I was like, You know what I actually remember I like this stuff. We’d like to start as we always do with a word or phrase or subject of the day. What might be on your mind at the moment, Kev?

Kevin Lawrence  01:48

Well, mine is similar to yours about getting on an airplane and it’s a magical thing called cocktail hour. And, you know, when we get to do these meetings in person, they work on Zoom, you just don’t get the social time. But when you get to do these meetings in person, what I’m finding is you get time where you just sit and have a drink, and sit and chat before dinner. And then you have a dinner and you socialize and it’s you know, cocktail hour to me is similar to having a coffee as you sit down. You have a chat, you catch up, you catch up with in my case executives I work with all around the world and what’s going on in life and with them. And it’s just the magic of cocktail hour. That only happens when you’re physically there together.

Brad Giles  02:33

Well mine is about the opposite of cocktail hour. It’s about a marathon. So if you were going to run a marathon, you’d probably be thinking, Oh, I’ve got to have quite a lot of water to drink. But that’s our intuition. But in actual fact, no one’s ever died of thirst in a marathon. But inversely, a lot of people have died from drinking too much.

Kevin Lawrence  03:06

They go to the wrong type of water.

Brad Giles  03:08

Yeah, they go to this stops or they carry too much. Yeah, a lot of people have actually died from drinking too much. But no one’s ever died of thirst. So that’s what’s on my mind.

Kevin Lawrence  03:21

Interesting. I have a family member, extended cousin who was qualifying for the Olympics, I think it was the LA Olympics 86. And wherever she was doing the qualifying race, it was somewhere that wasn’t used to having marathon races like a, you know, somewhere that it just wasn’t common. And they gave the runners ice water. And for a marathon runner who is running full tilt. Ice water is a bad thing because it shocks the body. And it can lead to all kinds of other things. Anyways, the story in the family and whether it’s the real deal or not, I don’t know. But it was that they basically because they gave her ice water and she drank it. It screwed up her system and give her cramps or whatever it gave her. It’s because it wasn’t the right type of fluid, interesting kind of fitting into what you’re saying. So if she knew what you do, maybe she didn’t drink the water. She would have been fine. Very interesting. So I got it, Brad. I got it. I got it. I got it. It’s a marathon cocktail hour. How’s that for fun? So the idea of today this week show is the 20 Mile March from Jim Collins in his book Great by Choice. And what is the equivalent output you can do consistently over time. And, you know, some people could run a marathon every day. But mortal people are likely to be able to hike or march 20 miles every day. And that’s what we’ll get into. And the whole idea of this show, and, you know, last week, we talked in Episode 119 about another Collins concept, the SMaC list, another list that gives you disciplines to help you make good decisions on an ongoing basis. And in both, he looked at the 10 xers companies that performed similar companies in very turbulent times, which is, you know, for many what we find ourselves in right now. So 20 Mile March was another piece of that book. And I love this principle, because, you know, when I pulled some stuff off Jim site, and he was saying, and he just talks about how in chaotic times, everything’s out of your control. Yeah, and right now, inflation, out of our control, supply chain issues out of our control, pandemic, completely out of our control, global shipping rates, for some companies out of our control, oil and gas prices out of our control, interest shortages, staff shortages, interest rates, like it’s actually most things a lot of things are out of control. Right now. It’s not just that it’s out of our control. It’s also a little out of control. And the idea in discipline is controlling what you can control. And the 20 mile march is one of those things.

Brad Giles  06:45

A quote from Jim Collins, I actually I saw him in Melbourne, and he said this quote, and it hit me so hard that I think every single workshop that I do I show it, and this is his quote, “the signature of mediocrity is not unwillingness to change. The signature of mediocrity is chronic inconsistency.” Okay, in so what he said is that the sample companies, or the comparison companies, they would change regularly, okay, but the ones that when what he called the 10, x’s in Great by Choice, they were willing to change, okay, but they were consistent about everything they did. So that’s talking to a degree to the 20 mile march, saying, It doesn’t matter what happens, this is what we’re going to do in this time period, and we’re not going to change.

Kevin Lawrence  07:41

Yeah, and that is that consistency is the core discipline for lots of success successes in lots of different ways. And he gets into one specific piece here with the 20 mile march. And the idea of this is, is that it’s a rigorous performance target, to hit with great consistency, like hiking or marching across the country, 20 miles a day. And Jim tells a story that when we were doing a session with him once about his wife, Joanne, and she did a cycling trip across North America with some girlfriends. And to make this principle work, they pre booked their hotels, at the intervals that they wanted to ride every day and plan their entire route. And what that meant was on the days, when they were feeling great they had an easy day, and they would be able to have a great time. And on the tough days where they had to grind it out in the rain. And you know, the thunder, or whatever it happened to be. They had rough days, but they still hit their mark week after week after week after week. And it’s that discipline and that consistency that makes companies run really, really well. The key is, you have to do it over a very long period of time, in many ways. theory that I kind of have is that, you know, the 20 mile march in many ways is connected to your flywheel. And it consistently speeds up your flywheel. And if you stop putting power to the flywheel, it can slow down. And the 20 mile march has many ways like a mechanism to fire up your flywheel. So the idea of this is that consistently marching at a pace, not too fast, not too slow, to ensure that you don’t overdo it, or under do it interesting, as I’m planning a road trip this summer. And also thinking about the same thing because I have a tendency to drive too far. So on a road trip, I’ll be like, Oh, we I had this anticipation of getting there, which fits into my personality in life. And but in that case, you’re bombing down a road and I like to drive fairly quickly. You can miss a bunch of the great stops along the way because you’re in such a hurry to get there. But once you’re there, all some of the good stuff can be behind it. So same thing isn’t we’re gonna book The hotels and we were actually looking yesterday at pacing out okay. Well, that would be about six hours of driving, because we want to do a pretty long road trip. And six hours of driving, we figured is probably the right amount, because you’re going to stop and have lunch somewhere and you got breaks, and there’s going to be traffic. So it’s just a good solid pace. So we’re kind of doing, you know, what can we do in six hours a day, to make it a great trip so that it’s not too excruciating? And that we actually get enjoyment and, and don’t destroy yourselves in the process.

Brad Giles  10:35

Well, that’s not too dissimilar to the actual concept. The 20 mile march comes from a comparison of two teams who were trying to be the first to reach the South Pole, going obviously, back many, many decades ago. In 1911 to be exact.

Kevin Lawrence  10:53

I got the notes off Jim’s source material 1911. Exactly when that happened. Yeah.

Brad Giles  10:59

And one of the teams had the discipline to march 20 miles, no matter the weather, so nice, fine day. They’re not going more than 20 miles, they’re going only 20 miles. Terrible blizzard. They’re getting out of the tents packing up in the blizzard, and still marching 20 miles. So it doesn’t matter what’s happening. We’re going 20 miles, the other team, the comparison team, nice, fine day, let’s push for 40 or 50 miles. And then in a terrible blizzard, that stay in our tents, perhaps we will go out when it’s good. And then we’ll push through. Now. Of course, we know that the 20 mile march team made it they were the first to the south pole and then made it out. And you know, were celebrated as heroes when they got home. The other team who didn’t match 20 miles every day, but surged when they could, they will die.

Kevin Lawrence  11:55

Yeah, exactly. And they did get there. They just didn’t make it back. Yeah. And there was many other things that happen in that. And it’s basically in many ways, protecting you from your ego, or from youthful exuberance that can get the best of you at times. Yeah, right. It’s not that you’re not capable, sometimes of pushing harder, but you can kind of wear yourself down and, and those people you’re talking about we’re I am I’m descending on Scott, I think floors, and medicine, that’s how you I know there’s a way to pronounce. And I’ve got my notes here. And the other interesting things too, just in this and, and those, the those stories include some of the principles from Great by Choice, but I also remember, like the discipline that they had to do that 15 or 20 miles every day in March there and even at the end, when they were getting close, and out of this endless Amundson. They thought Scott might be ahead because they had word that he was trying to get there first, and they wanted to get there first and the team is like, we can do 25 miles a day, we might be able to do more, we could push more and assure that we win. And Amazon said no. And they consistently did their 15 to 20 miles every single day and they maintain their pace. Underneath that is the thinking of like, we don’t want to overdo it. Yeah, because if you go too hard, you’re gonna and inconsistently you’re gonna wear the system, you’re gonna wear yourself down. Yeah, right. And you or you could wear yourself down and you leave yourself more open to be vulnerable if things go wrong. If you just had a 30 mile day, and then the next day is a storm, you know, you can you get in a lot of trouble. It’s not a great choice. So the other interesting thing about Amazon that I really loved is the honest journey. He practiced eating and living on seal blubber. Basically, if you’re running out of food, there’s big fat seals, but the stomach in the system is not used to eating those kinds of things. So he tested eating different things. He did all kinds of other things to assure success. So so the main thing is, that story is a great story bread, and thanks for opening it up with that. The other thing about this is really is it’s about the second point is about self control. Because generally, more companies will die of indigestion than they will of starvation. Generally, they grow too fast. They make a big freakin mess. And then they wonder why the girl stops and the company get in trouble. They get overextended. They get over something. Yeah. And and and then they get in trouble or they get the businesses in trouble. It’s not because there’s not enough opportunity. There’s always an abundance of opportunity. Just gotta stay disciplined. It’s a bet it is and it’s a long game. It’s not a sprint. And you hear people all the time on a roll. We got to be the first to market. Oh, no. You need to be good and you need to be there long term like right now in turbulent times. You got to be there on the other side of the valley that happens in the economy. Yeah, right it that’s all you gotta be good. You gotta be good solid operator moving towards great. And you got to be there on the other side. You don’t necessarily need to do anything insanely fast or, or kill yourself you got to sustain not sprint. Yeah, so yeah, the self control is a really, really big piece anything you’d like to add in there?

Brad Giles  15:22

Look, I’ll get back to the original statement I said the signature of mediocrity is chronic inconsistency – 30 miles, five miles, no miles, 50 miles. And compared to that the analogy is 20 miles every day. And that’s what we’re advocating. This is how one wins. It’s consistency, stability versus sprint and recover.

Kevin Lawrence  15:49

Yeah. So interestingly, you know, one of the companies that I work with their 20 mile march is also connected to their directly to one of the pieces of their flywheel. And it’s the number of salespeople that they have in the company. And what we realized, at a certain point, going back five years with this company, is the number of salespeople wasn’t growing. And as a result, our revenues weren’t growing enough, and profitability. So now we have an obsession with the number of salespeople that we hire, promote, develop, train all the work that we do. And that is one of our number one numbers we track in the business because it’s their army, army strength. And we drive it like crazy. It is the 20 mile March is one of our number one objectives every year, that we know that the growth of our sales team is the growth of our company. And it’s the most critical discipline, that often wanes normally in the past, when we get busy, and people let it fade.

Brad Giles  16:46

So you might look at it just to discuss that for a moment and say, currently, we’ve got a sales team of 40. This time next year, we need a sales team of 48, which is we’re going to add two sales people net per quarter, and then we’re going to grow it and so this time, next year will be 48 people, this is the average budget, this is how we like it.

Kevin Lawrence  17:08

Yeah. And with those numbers that you used, we have a target of where we always want to be, we’re always working three years out. Yeah, you know, and that case, the number would probably be for you to probably be like 100. Yeah, so we’re marching towards 100, from our base of 40, which is one of our key disciplines and drivers of our growth, because without that, it doesn’t work. So self control is key. This the next thing around the 21. March is it builds a lot of confidence. Because you consistently when you consistently achieve it, because you’re consistent, it’s not a massive win, and then a horrific loss. It’s you know, it’s a stable system and stability in lots of different ways, builds confidence in the system confidence with your colleagues, and allows you just to stick to your work because you believe you’re gonna win.

Brad Giles  17:57

Yeah, I’ve mentioned to you on this podcast before, the state in which I live is predominantly a mining state. And that state is driven by cycles. So at the moment, the I think the iron ore price is probably the primary driver of all finances in the state, it was as high as 240. And as low as $30 per ton in the past four or five years, right? So you can imagine the massive changes. So when it’s high, mining companies are making big investments, nothing matters apart from getting the tons out. Yep. And the opportunities seem boundless. And when it’s dry, you know, when it’s really low, it’s really, really tough. And so the SMAC applies in that environment. And the way that I’ve worked in clients that are in mining services, or whatever it is, is we’re saying, We’ve got to keep an eye on the longer term, the consistency, because it can, you can get caught up in the euphoria of the mass.

Kevin Lawrence  19:10

And if you over invest when the time is high, yeah, you’re gonna get the crap beat out of you when the market falls, and then you won’t be able to invest properly in the next cycle because you get really, really damaged whereas if you consistently invest when the market goes incredibly high, you’re not going to fall as far like it’s disciplined through chaos. Yeah. And it’s a great example, Brad, is that, you know, companies they get too caught up in that. Then when a falls, they fall with it, and they end up very weak when they fall.

Brad Giles  19:44

Yeah, yeah, it’s the consistency that that really you know, that really matters because everything goes up and everything goes down, you know, there is surging demand, you know, it’s just this constant battle between supply and demand that one way or the other, and we’ve got to endure through that.

Kevin Lawrence  20:10

So why is it critical to have this kind of governor on your growth, to not grow too fast, because when the money showing up at the table, a lot of people have a hard time not grabbing it now. So why is it dangerous to grow too fast?

Brad Giles  20:27

Because we’re human beings. And we have emotions. And, you know, our brain is just a wet mess of meat that has electrical stimulus in it. And that means that, you know, and a great deal of our brain is primal. Okay. And that drives us to want to gamble, to take risks, and, you know, to not stick to the disciplines that make us actually succeed and get what we really want.

Kevin Lawrence  21:07

So basically, that’s one of my marches. They don’t gamble on growth. Yeah, consistent and discipline. And, you know, we watch when people do take on too much business, like, if you’re a business, and you’ve got, you know, three or 400 employees, and you double, in a year or so, which I’ve got a client recently that did that. And they’ve miraculously done a spectacular job of it. But there’s a cost to the organization. Because when you go in double in size, often a bunch of your systems start to fail, whether it’s management systems, back end operational systems, or whatever it happens to be, service levels often fall, because it’s hard to maintain quality. So you know, a 20% growth per year, let’s just say is a sustainable growth a lot of organizations can do if they’re dialed in. But at scale, 100% growth a year, you’re basically you’re gonna implode yourself in almost every case, you can do it for a short period of time. But then you start to build up these debts in the system that you got to pay. And it really, really hurts. That’s why companies will go and they’ll grow and then they’ll flat note or crash. Because it’s just too hard. This the system just can’t handle that quick of growth.

Brad Giles  22:22

And the problem is, it’s there’s very few people like us who were talking about building enduring great businesses and focus on the boring basics. If you look to the Business Media, it’s all BS, right? Talking about this company had 14,000% growth, or this company did this. And it’s all they only talking about the meteors in the sky, not the stars, if that makes sense. They’re only talking about a beautiful metaphor. Yeah. Well, I think it’s a bad one. But yeah, right. They’re only talking about these real outliers.

Kevin Lawrence  23:01

Yeah. And I saw this great article in The New York Times and recently about this young Canadian artist who’s 26. Yeah, and her paintings are selling for $1.4 million. Right? It’s a beautiful story. And I’m thrilled for her, and she has a really interesting art. That’s just how what happens one time and 50,000, you know, for every 50,000 artists or 100,000 artists, there might be one of those at that age. But the point of it is, we’d love those stories. It’s just generally not how it’s done. And I And I’m thrilled for the people that it does. But building a great business is generally not those one of those outlier events, its core disciplines, compounded over time.

Brad Giles  23:44

And when the average executive or leader reads those stories on a regular basis, they can’t help but be compelled to want to try for those types of things. But so many of those businesses crash and burn.

Kevin Lawrence  23:59

Yes, because you crash and burn your systems, you crash and burn your people because you overload. Everyone goes through growth spurts we’ve done in our own firm recently, too, and it’s hard and too much too fast. Sounds good. You think you’re gonna make a whole whack more profit, and often you give a whole bunch of a back. So great things. So let’s get a few examples. So I there’s an example the Jim talks about from Stryker, and I didn’t give a simple example. It’s a company in the US. And they decided John Brown, the CEO decided they would have a 20% net income and growth year on year now. He also put a little bit of teeth into it. Anyone who was behind that 20% net income growth as the watermark, they said it’s the watermark. So if you’re below it, he needed a circle. And all of those people were given snorkels, snow so you were diving snorkel, a diving snorkel, because you’re below the watermark. So yeah, you would be awarded a snorkel and even when they had their annual Chairman’s breakfast when they had their annual divisional reviews. You got invited to his table, the chairman, John Brown’s table, if you were above the watermark, everyone else just went for breakfast. They weren’t in the room they weren’t invited in, they were basically social exclusion. Because they didn’t perform. So that’s, you know, that’s I like the teeth. And I mean, that’s accountability. That’s not everyone’s culture. But you know, if you’re gonna have the drive to grow net income, 20% year on year, it’s beautiful. By the way, I’m also thrilled to see when people are talking about growing net income or return on capital, not revenue, growth, revenue growth is a dangerous, undisciplined way of looking at most businesses, gross margin growth, EBIT a growth or net income growth, return on capital growth, in return on return on capital, sustaining return on capital, but getting a higher number, which is generally tied back to your net of your uutta.

Brad Giles  26:03

So if you were at Stryker, and you’re turning up and you’ve produced a 40, or 40 or 50% growth, then you’re not necessarily succeeding.

Kevin Lawrence  26:15

I’m sure you would get a talking to of like, how you’re going to sustain that. And why didn’t you save some of that? Yeah, why didn’t you modulate your growth so that you could do it next year, and the next year, and the next year.

Brad Giles  26:28

And that’s what’s so important in this 20 minute discussion.

Kevin Lawrence  26:31

It is strength, you’re building strength and concern. It’s, it’s like the flywheel speed, don’t speed it up too fast, consistently discipline. So some other ones we’ve seen is EBIT up percent increase one client is that they want their EBITA percentage to go up year on year on year, the percentage, not the dollars. So it doubles down on the dollars.

Brad Giles  26:55

Now that would be consistent over many years, it’d be like a 1% per year or something like that, right?

Kevin Lawrence  27:01

Less than 1% in less than one. It’s a less than 1% Number. Yeah. And it’s over many, many years.

Brad Giles  27:07

So in five years, less than 1%, every single year, we get a feeling, and then everything comes back to that but don’t go too high, and don’t go too low be in that Goldilocks zone.

Kevin Lawrence  27:19

You got it. Cash, building up cash in the businesses, and improving whether it’s cash flow or cash, we’ve seen a really interesting one, which is dividends to shareholders in privately held businesses, family businesses. One that I had heard about, this wasn’t one of our clients, but someone else shared this with me is that the dividends to the family? The shareholders went up every single year. So and that money was coming out no matter what. Yep, so the CEO and executive he had to produce additional returns beyond that. So they had capital reinvest, because the there was an accelerator on the stuff being sent out to shareholders. Yeah, I’ve seen it around new market openings. But it’s again, it’s often guardrails. It’s like a min max, right? It’s it regulates a speed almost like regulates the that was, so it was marketed openings.

Brad Giles  28:15

I’m saying that with retailers, so retailers can get into a buoyant market. And they’re, they’re going to open too many stores too fast. In bricks and mortar stores, and it constrained their balance sheet. Whereas if they say, we’re going to open one store per quarter or half, something like that, it may be more sustainable.

Kevin Lawrence  28:36

Yeah, and by the way, opening up new stores from retail, and often people get, I’ve seen it happen. A lot of times, it’s a lot of work in retail, people get over exuberant, they exuberant, sorry, they get excited about it. And then I started opening up b stores and C stores because they’re trying to do it too quickly. And not doing the diligence or waiting for the good locations. Yeah, yeah, new product releases about how new products will get released. And continually or, and the existing product will there’ll be constant mini releases. And that’s what improvement.

Brad Giles  29:07

That’s what I do in software a lot. It’s like every week, or every fortnight, whatever it is, we’re going to do a sprint, and we’re going to have the next version and the next version. Yep.

Kevin Lawrence  29:15

Constant releases return on capital growth, as I had mentioned, revenue growth, which is can be a dangerous one, depending on the business model. And a real estate development group I work with is the development square footage that we’re going to expand the square footage that we develop at a certain pace, and we’re not going to go too fast or too slow. And all of these things I mean, the idea here is, is it’s putting parameters on the growth. So you know, when sometimes executive teams will want to slow it down and make it easier to hit their bonuses. Right. And it’s almost an expectation set between the executive team and sometimes shareholders of what is the pace of growth. So we’re gonna have and what is that marker that we’re gonna watch? Is that the people that we hire? Is it the markets that we enter? Whatever does it happen to be? Is it the profitability of certain pieces, wherever it happens to be just, you know, how are we going to set those disciplines in place to consistently bring the best out of us and make sure that we get stronger and stronger as we grow?

Brad Giles  30:25

Because just like people, companies, you know, become weaker or can die from trying to consume too much or do too much.

Kevin Lawrence  30:35

Yeah, exactly. You remind me of a big dinner that we had the other night. And the 20 mile March, it’s like when you have dinner, that’s really, really good, and you just eat too much. Right? You’re that’s not a great thing. If you had your most important day of work tomorrow, and you didn’t eat enough, or you ate too much, or you drank too much. It’s gonna set you up to be wobbly the next day and you can’t be your best. It’s consistent discipline and not excessive. And also not being too conservative too.

Brad Giles  31:09

Yeah, yeah. And we circle back to the check in about the marathon, right? If nobody’s died from a lack of thirst of no one’s died from not drinking enough during a marathon, but heaps of people have died from drinking too much. So we’ve got to maintain discipline.

Kevin Lawrence  31:28

Exactly. That’s the 20 mile march. So thanks for listening. This has been the Growth Whisperers Podcast. I’m Kevin Lawrence, and I’m here with my partner, Brad gels. I’m in Vancouver, Canada. Brad’s in Perth, Australia. If you haven’t, please do subscribe wherever you listen to podcasts, and please share it with a couple of friends, other CEOs and execs that you know might benefit from this. For the video version, go to youtube.com Search the growth whispers and to connect with us in our newsletters or the great content and resources on our websites. Brad’s is evolution partners.com.au And mine is Lawrence and co.com. Hope you have a great week and hope you continue to march towards where you want to get and ideally towards your version of greatness. Have a great one.