In his memoir, L.L.Bean: The Making of an American Icon, Gorman tells of how, before he became president, he carried a little black notebook with him at all times in which he jotted down notes for how to improve the operation, eventually compiling more than four hundred specific ideas. Upon becoming president, he began to implement the list. Under Gorman, L.L.Bean increased revenues by more than forty times in inflation-adjusted dollars. If that’s shirtsleeves to shirtsleeves in three generations, then they must be very nice shirtsleeves indeed.

It is about consecutive consistency—meaning, you almost never fail to hit the march. Some companies in our research hit their 20 Mile March for more than forty consecutive years without a miss. Committing to march with consecutive consistency achieves a beautiful Genius of the AND: it stimulates the discipline of short-term performance and long-term building. You have to hit the march this cycle and every subsequent cycle for years to decades. (Directed reading: Great by Choice, Chapter 3.)

So where does all this leave us on the question of growth? Our main message is that growth rate should be part of your strategy formulation process, and that the pros and cons of various growth rates be thoughtfully considered. In general, the healthiest companies do grow, but at rates that allow them to put in place the pieces of greatness along the way. The question should not be, “How can we grow the fastest?” No, the question should be, “What growth rate is most consistent with our vision?

Intelligence Wins Wars

Perhaps the most difficult part of good strategy is hard-nosed competitive analysis. Almost every institution develops a pride in itself; it wants to believe it’s the best…

But facts are facts, and they’ve got to be assembled on a continuous, unbiased basis. Products have to be torn down and examined for cost, features, and functionality. Each element of the income statement and balance sheet has to be examined with total objectivity vis-à-vis competitors. What are their distribution costs? How many salespeople do they have? How are their salespeople paid? What do distributors think about them v. us? There are hundreds of questions that need analytical examination and which then must be pulled together in comprehensive, deep competitive assessments.

My critique of GDP measurement in practice relates to its inability to report sufficiently accurately what it is intended to measure: the value of economic output. And pronouncements based on such data about long-run trends in income or the rate of increase of productivity should be taken with a grain of salt – or several. When pundits fret over whether the latest figure for GDP growth is an annual rate of 1.8 per cent or 1.9 per cent, they are fussing over differences that are insignificant in relation to the fundamental and inescapable uncertainties in the data they are citing.