Miguel A. Lopez Alexander Johnson Carissa Tarnowski Rebecca Eggerman Hannah Stephens Great By Choice 20 Mile March

Preview Walk Across the U.S. 20 Mile March The Alternative The Strategy Characteristics of 20 Mile March 20 Mile March Comparisons Unexpected Findings Performance Mechanisms Results of Success Self-Imposed Discomfort Good 20 Mile Marches 10X and the 20 Mile March Whole Foods Cause and Effects Summary

Walk across the U.S. How long will it take you? How much supplies will you need? Where will you find shelter? How much will it cost you? How will you communicate to the outside world? How far is 3,000 miles?

San Diego Maine 3,000 Miles How far is 3,000 miles???

20 Mile March Walk 20 miles Don’t walk more than 20 miles Don’t walk less than 20 miles Don’t think about weather

Alternative Walk in only good weather If you can, walk more than 20 miles If the weather is bad, rest

The Strategy 20 Mile March Alternative Walk 20 Miles Don’t walk more than 20 Miles Don’t walk less than 20 Miles Don’t think about the weather Walk in only good weather If you can, walk more then 20 miles If the weather is bad, rest

Characteristics of a 20 Mile March Clear Performance markers John Brown 20% marker Self-imposed restraints Not move past a given point in a year Appropriate for specific enterprise No such thing as an all purpose 20 mile march it must be tailored to the industry.

20 mile march Largely within the company’s control to achieve No need for luck in the market to achieve your goal. A proper timeframe Not too short and no too long

20 mile march Imposed by the company on itself Imposed by the enterprise not copied from somewhere else (no outside pressure) Achieved with high consistency. Intention to achieve benchmarks not good enough.

20 Mile March Comparisons StrykerUSSC 20% annual earnings 20 Mile March consistently Successful from Erratic growth and earnings Breakthrough innovation Overextended and sold out in 1998

Southwest Airlines PSA Profitable for 30 years Maintained profit even after 29/11 Constrained growth to ensure profitability Began with 20 Mile March philosophy Abandoned philosophy in 1970s Taken over in 1986 by US Air

Progressive InsuranceSafeco Insurance Averaged combined ratio 96% Limited growth to ensure maintained ratio Profitable 27 of 30 years Focused on combined ratio early on Went for growth acquisition of American States in 1980 Profitable 10 of 27 years

IntelAMD Upheld Moore’s Law Doubled complexity at minimum cost Kept consistent over entire course Pursued big growth Unprepared for bad times No steady growth marker

MicrosoftApple Practiced 20 Mile March innovation Products improved over time Never strayed from 20 Mile March Didn’t use 20 Mile March initially Inconsistent profit and growth Introduced 20 Mile March with return of Steve Jobs

AmgenGenentech Used 20 Mile March in incremental innovation Continuously developed existing drugs Strong revenue growth Bet-big and over overpromising mentality Began 20 Mile March in 1995 after downfall Broke 5 year goals into 1 year goals

BiometKirschner Consistent profit growth 20 of 21 years 20 Mile March innovation Never overextended Didn’t use 20 Mile March “Grew fast through acquisition” Resulted in crisis and sold out in 1997

Unexpected Findings ExpectationsReality Pursuing aggressive growth Making radical, big leaps Catching the Next Big Wave Hit stepwise performance markers Great consistency Long term

Performance Mechanisms Concrete Clear Intelligent Rigorously Pursued

A Result of Success? 10X Companies Embraced long before they were big companies Comparison Companies Some had shown no signs of 20 Mile March Some only did well when they also 20 Mile Marched

Creates Self-Imposed Discomfort Unwavering Commitment High performance in difficult times Holding Back In good conditions

A Good 20 Mile March Performance Markers Lower Bound Self-imposed Constraints Upper Bound Tailored to the Enterprise Applies to Company Lies Largely Within Control to Achieve

A Good 20 Mile March Goldilocks Time Frame Not Too Long/Short Designed and Self-imposed by the Enterprise Not Imposed from the Outside Achieved with Great Consistency Good Intentions Not Enough

10X Companies 20 Mile March Strategic Mechanism Near-perfect Record Missing a march is not seen as OK There’s no excuse, and it’s up to us to correct for our failures, period.

Whole Foods Market Intends to Grow at such a pace that financial health continues to prosper Salary Cap limits the maximum cash compensation paid to any Team Member

Whole Foods Market "The pace of new store openings and lease signings continues to increase, and our accelerated growth plans are on track. We expect healthy comparable store sales growth and continuing operating margin improvement in fiscal year 2013.“ - John Mackey, co-founder and co-chief executive

Whole Foods Market For the quarter ended Sept. 30, Profit of $112.7 million Sales grew 24% to $2.91 billion. Latest quarter same-store sales rose 8.5% 14th consecutive quarter of growth.

Cause and effects of the 20 Mile March Builds confidence Failure to complete leaves an organization exposed to turbulent events Helps exert self-control

The 20 Mile March Summary A distinguishing factor to 10x companies and comparison companies Requires hitting specific performance markers with great consistency over a long time period Does not have to relate to financials It is never too late to adopt 10Xers set their own 20 Mile March

What is your 20 Mile March? What is something that you want to commit to achieving for 15 to 30 years with as much consistency as the 10X companies we have discussed today?