Meet Freddie (not his real name, but his tale is based on a true story). The leaders of his company, Property-Casualty Inc., read our book The Founder’s Mentality®, and wanted to transform the company from a struggling incumbent into a scale insurgent. They latched onto the idea of micro-battles and loved the notion of putting their top 20 leaders in charge of these focused initiatives.
One of them was Freddie, a 28-year-old star whom they promoted into the lead role of a micro-battle focused on creating a new direct-to-consumer insurance product. If successful, it could transform the company’s broker-centric model and shake up the industry. Freddie was empowered to form his own team (most of them in their mid-40s) and co-create a micro-battle mission with them. The leadership team asked to meet with him after each four-week Win-Scale cycle to discuss ways to accelerate or pivot the effort and how to remove obstacles. Freddie was fired up.
Four weeks passed, and Freddie’s team was ready for their first hour-long discussion with the senior executive committee (Exco). Here’s what Freddie’s hour was like:
Freddie: We’ve gotten tremendous customer feedback on the prototype of the new online homeowner’s policy we launched and now want to move it from a paper prototype to software. We’re bringing Bob on board to support development and will be testing with a group of customers in LA. The only thing I need from you guys at this point is some help with our LA sales team. They are overwhelmed by a request from IT to participate in a round of internal research on our new back-end system. We’d like to get them freed up so they can help us shape the product and be part of our LA focus groups. It’s going to be important to keep them in the loop and let them see customer feedback directly.
Jack, Exco member, head of customer insight: Nice work, Freddie, but we’ve just launched our corporate Focus Group initiative firmwide and really don’t want to be doing any other customer research this year. So talk to my guys and see if they can fit in the LA trials next year.
Mary, Exco member, head of IT: Good job, Freddie, but I really want our sales guys to test out the new IT system. These sessions are important for the IT rollout, and we’re not going to move our schedule.
Alice, chief executive: Look, Freddie, there are a lot of interdependencies here. In fact, I’m a bit worried about any direct-to-consumer insurance offer. We’ll just cannibalize our brokers, and that will create huge problems for us down the road.
Kevin, Exco member, HR: And anyway, Freddie, to really get this product to work, we’re going to have to sort out bigger issues with our corporate operating model, and that’ll take months. Not sure our folks are up for another big re-org.
Freddie had a miserable hour. His leaders launched a new micro-battle, ostensibly to rediscover the Founder’s Mentality, but made no effort to change their old behaviors. Freddie walked out of the room as a detractor and later, over drinks with his team, he confided: “Yeah, same old dusty wine, new Founder’s Mentality label.”
It’s about behavior change
This is our nightmare. Leaders of companies who want to rediscover their Founder’s Mentality must recognize that the journey starts with them and their behaviors. This was supposed to be Freddie’s chance to accelerate to the micro-battle’s next phase with his team and leadership’s chance to learn how to let that happen. Instead, you see the worst bureaucratic tendencies emerge:
- Jack and Mary often say they want to get refocused on the front line and move faster, but apparently not at the expense of their functional excellence programs in the customer insight and IT departments. They’d rather slow down Freddie and keep sales folks working on their internally focused initiatives.
- Kevin doesn’t want to help Freddie solve a specific, mission-critical issue, but instead raises a broader ideological concern about the need for a new corporate model.
- And just when the meeting needs a CEO’s true leadership and role modeling, Alice jumps in questioning why Freddie is working on a direct-to-consumer product at all, somehow forgetting that four weeks earlier, she had personally asked Freddie to champion this initiative.
This is why, when we introduced our micro-battle system in a recent blog, we said that key to this system are the Win-Scale model and the Lead-Learn model. Win-Scale focuses on how a dedicated team should manage an individual micro-battle, and Lead-Learn focuses on how top leadership should run a portfolio of battles. The Lead-Learn model relies on behavior change among executive team members and demands four things:
- Effective leadership would start with listening to Freddie and paying attention to the most recent customer feedback. In the example above, note how no one asked Freddie a single question.
- The executive team would specifically address and support Freddie’s request―not questioning it, but making it happen. They would send a powerful signal that they are willing to “break glass” organizationally by shifting real resources from business-as-usual activity to double down on the micro-battle. Note that not a single executive helped Freddie shift the priorities of the sales team. Instead, they clutched their resources even tighter. IT refused the request outright, and no one jumped in to ask why, after all, the company was taking salespeople away from customers to focus on IT’s issues.
- Leadership would learn from Freddie’s work and help address the broader issues. This meeting presented the opportunity to raise a fundamental question about the company’s brokers: how will they compete against a wave of digitally enabled direct-to-consumer products. This is a big issue and the company will have to deal with it separately. But in the meantime, the executive team should let Freddie get on with his test-and-learn process. No such discussions occurred.
- Finally, leadership would step back, look at the discomfort this micro-battle was exposing and use this information to adjust the company’s full-potential agenda. You would have hoped that someone would suggest that shutting down an IT initiative that tied up the sales force was a good thing. You’d also hope someone would call out the head of customer insight for wanting to stop Freddie from talking to customers.
Getting a leadership team focused on these four issues involves a lot of coaching and focus on behavioral change. Why? Because leaders bring a lot of baggage to the table. They’ve been in an organization that rewards and develops an incumbent or bureaucratic mindset, so it’s not surprising they would have to shed some comfortable old habits on the company’s journey toward scale insurgency.
All of this corporate drama, in fact, begs the question of why Freddie should march up to the board room every four weeks to undergo such pain and frustration. If the objective is to operate in a more agile way, why slow things down with another Exco meeting? There is, indeed, a clear contradiction in this. If you succeed in choosing the right leaders for each micro-battle, you will have a group of hard-charging insurgents who want to get on with their jobs changing the status quo. Making them discuss their actions in front of their bosses every four weeks seems at odds with the desire to empower the front line and accelerate change.
Yet these sessions are vital for two reasons. First, micro-battles are designed to force transformational change up and down the company―especially in the executive suite. Second, executives have to learn from each other about speed and flexibility and think beyond their individual silos. In other words, the leadership team needs these micro-battle meetings to reconnect with their own Founder’s Mentality. But old habits keep getting in the way.
Letting go of the baggage
Leadership behaviors are a direct result of the leader’s current mindset and the routines he or she has developed over the years. This is a big topic, but to understand what we’re talking about, let’s ask a few questions about the mindset of these leaders:
- Is the CEO in this case conscious that this review with Freddie is a “moment of truth”―a leadership moment demanding role modeling? Or is she unaware, not recognizing the necessity to lead? My guess is the CEO was rushing from meeting to meeting, exhausted. She forgot that this meeting wasn’t just about Freddie’s product initiative, but the company’s journey to scale insurgency. She rightly pointed out the cannibalization issue, but wasn’t thinking about the need for new behaviors and the spirit of test-and-learn. She failed to recognize that her backtracking completely undermined Freddie’s initiative.
- Are these leaders defaulting to control mode because they don’t trust Freddie? My guess is the head of consumer insight doesn’t trust Freddie to run a good feedback session with customers and so controls him by shunting him off to the queue for focus groups―in 2018! The whole point of a micro-battle is empowerment, so this lack of trust has deflated Freddie’s team completely.
- Are the leaders projecting a lack confidence in their own judgment onto Freddie? My guess is the CEO and head of HR aren’t sure strategically how to address the broker question or how the company should organize to run this new product. So rather than let Freddie sort these issues out over time and then learn from his experience― the very objective of the micro-battle―they have undercut him.
That’s a lot to bring to the table, but hardly surprising. These leaders are also creatures of routine and great at what they do. They’ve mastered their specific organizational roles and have been rewarded for pursuing their specific functional objectives. Remember, we’ve said that all organizations have to deal with the three big trade-offs.
- Intimacy vs. scale. The head of consumer insight is trying to create common approaches to the company’s focus groups to bring scale benefits. Freddie is trying to bring intimacy benefits―right now―to LA consumers. This feels really uncomfortable to a guy focused on scaling routines, so the head of insight lashes out.
- Routines vs. creativity. The head of IT has a big program requiring big disciplines. This micro-battle guy’s creative idea for prototyping in LA is getting in the way of testing her new system on the sales force. So she slaps Freddie down.
- Short term vs. long term. Freddie is in the moment, relishing his progress and moving quickly to the next four-week cycle. The head of HR is thinking through a multiyear organizational program. Freddie isn’t fitting that time frame. Slap.
Poor Freddie. Without deep focus on behavioral change at the leadership level, the best micro-battle teams run into the bad-behavior buzz saw. Treated like this by his bosses, it’s easy for Freddie to tumble into a negative spiral and start to exhibit what we call a tourist or, even worse, a victim mindset (see Figure 1). Tourists tend to remain positive, but are only along for the ride, having lost the initiative to lead change. Victims avoid taking risks or exploring new initiatives at all, and express their frustrations by grousing on the sidelines. Micro-battles suffer from either sort of behavior and depend instead on the proactive, entrepreneurial energy of the micro-battle leader. It is critical that top leadership teams both encourage and role model a founder mindset.
That’s why you need to master the Lead-Learn model and that’s why leadership training at the top is a key part of running the model. So how do you create a positive Lead-Learn cycle? How do you engage leaders and leadership teams to act like founders instead of victims and tourists?
First, you need to apply adult learning principles. Adults learn best when the learning is:
- Connected to something they care about deeply. An easy way to make them care is to run a Founder’s Mentality diagnostic, which places your firm on the competitive map and identifies the forces working against you. Given the tremendous cost to employee confidence, we don’t know any executives who aspire to work in a struggling bureaucracy, and the team can usually align pretty quickly around the need for real behavioral change. But as Freddie’s example shows, leaders must regularly recommit to the need for behavioral change. It is easy to drift back into the old negative routines.
- Structured to be iterative over time. What we talk about here is a field and forum approach―a cycle of action and reflection where learning builds upon itself. Learn, apply and test, adapt; learn, apply and test, adapt―this in an iterative learning cycle. Through several interventions (forums), you create awareness and build skills. Then, trainees can field test what they’ve learned and get feedback in a real business environment. One common way we do this is to coach micro-battle sponsors on the executive committee in one-on-one sessions after they’ve participated in micro-battle reviews. If the execs in the Freddie example had received regular feedback after their previous micro-battle reviews, they would have been much more aware of the need to “lead in the moment.” Instead of thinking and working in an “X posture” (the answer is in me, I need to stay in control), we encourage and coach leaders to take a “Y posture”: How can I help Freddie to achieve his results? How can I remove barriers? How can I stay in learning mode?
- Learned from role models. What’s critical here is that top leadership needs to role model the right behaviors. Otherwise the rest of the organization will be extremely unlikely to change. The executive team must learn to reinforce and celebrate the right role modeling in the areas where it counts: the micro-battles. And this starts with the CEO, who in our case study was a horrible role model for her team.
Second, you need to create the right environment around Freddie and his colleagues, so they get excited about the change rather than discouraged. We argue that the executive committee needs to work with the top 40 “franchise players” in the company, co-create the path to becoming a scale insurgent, and then give that team the responsibility to lead the first 20 micro-battles (“A” leaders on “A” priorities). You create a team of owners, not tourists or victims. You can then work with this team to design an integrated skills- and capabilities-building program (both technical skills, such as sales or operations, as well as leadership skills) throughout the “leadership spine” in your organization.
Finally, you can do some simple things to shake up the Lead-Learn meetings to keep top management from slipping into old behaviors.
- Trim the number of leadership team members who attend. Not everyone needs to be there, and changing the usual dynamic helps promote new thinking.
- Hold a stand-up meeting, ideally in a separate “war-room.” This, too, signals that a Win-Scale meeting is about moving quickly and solving problems, not sitting around debating ideology.
- Focus on what the micro-battle team wants to talk about. These meetings shouldn’t be comprehensive “progress reports” where the leadership team sits in judgment. The objective needs to be removing organizational obstacles and allocating the resources needed to overwhelm problems. Working through specific issues and making quick decisions are the behaviors micro-battles are meant to encourage at all levels of the company.
A better outcome
Let’s now assume the leadership team had committed to launching micro-battles and going through deep behavioral change. Freddie’s hour would have looked very different:
Freddie: We’ve gotten tremendous customer feedback on the prototype of the new online homeowner’s policy we launched and now want to move it from a paper prototype to software. We’re bringing Bob on board to support development and will be testing with a group of customers in LA. The only thing I need from you guys at this point is some help with our LA sales team. They are overwhelmed by a request from IT to participate in a round of internal research on our new back-end system. We’d like to get them freed up so they can be part of our focus groups and hear customer feedback directly. It’s important to keep them in the loop.
Jack, Exco member, head of customer insight: Nice work, Freddie. You know we’ve launched our Focus Group initiative―let me call our guys now to redirect resources to support you in LA. Let’s not force you to reinvent the wheel; we’ve done thousands of focus groups, and your team should get that expertise ASAP. I’ve just emailed our team to call you right after this meeting.
Mary, Exco member, head of IT: Good job, Freddie. I’ll stop the salesforce interviews in LA to free up those guys to support you. I just emailed the team, and you’ll get confirmation by 4:00 today. Call me if this doesn’t happen.
Alice, chief executive: Look, Freddie, there are a lot of interdependencies here. I’m concerned about cannibalization of our brokers, but let’s cross that bridge once we understand what consumers need. Full speed ahead.
Kevin, Exco member, HR: In addition to Alice’s concerns, I’m a bit concerned that our operating model isn’t really fit for purpose to run an online business. But that’s my problem. You create a great new business, and I’ll commit to figure out how the organization can adjust to support you. That’s on me, not you. You just focus on creating the next great growth platform for our company.
Freddie would have had a good day.
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