The core business that has propelled your growth so far. It is currently most of your revenue and almost all of your profit. It requires 70% of the organization’s time.
The new business/innovation that will determine the next wave of high growth, typically focused on where the future growth will be. Engine 2 should have a degree of connection to Engine 1. This engine should satisfy the original founding insight—a need to disrupt the industry on behalf of underserved customers.
Founder’s Mentality is the set of core strengths and values that drives exponential growth of insurgent businesses. It has three major elements:
- Insurgency: The drive and instinct of a company to redefine the industry on behalf of the dissatisfied customer. This mindset gives a company a bold mission, a long-term view and an external orientation.
- Owner’s mindset: The mindset of people in the organization to treat the company’s economics as their own and focus on efficient risk- and cost-management.
- Frontline obsession: A maniacal focus on talent, empowering employees to do the right thing for customers.
Founding team’s proprietary insight
The definition of the underserved consumer (people who needed the company’s products and services), as identified by the founding team. It was the reason the company came into existence.
The drive and instinct of a company to redefine the industry on behalf of the dissatisfied customer. This mindset gives a company a bold mission, a long-term view and an external orientation.
A radical concept, it involves the creation of something new and bold in order to disrupt industries on behalf of underserved customers.
The key people involved in delivering the strategy, accountable for delivering on the most important elements of the customer proposition.
Monday morning meeting
A tool for conflict resolution, where the simple rule is that everyone must raise any organizational obstacles to their own actions, and the leadership commits to making decisions to address these within the four remaining days of the week.
The mindset of people in the organization to treat the company’s economics as their own and focus on efficient risk- and cost-management.
Storm warnings bring a sense of urgency and a burning platform to the company’s position. The four major storm warnings include:
- Major industry turbulence
- Fundamental shifts in the ability to access talent
- Major internal dislocations
- Capital structure (vulnerability and volatility that comes with external capital)
Strategy on a hand
The thumb states the strategy in a sentence (the core proposition) and your fingers describe the three to four critical capabilities that define your repeatable model. It is vital that both the leadership team and the front line can define the strategy in this way.
Unit of value creation
The organizational unit that is ultimately empowered to deliver a company’s products or services. In a complex organization, there can be multiple units of value creation.
Forces that push companies toward incumbency or bureaucracy.
- Westward winds: As insurgent companies gain scale and scope, they also encounter a number of forces that threaten to drive them off course and away from their Founder’s Mentality. The best companies recognize these forces early and take action to resist them. We call these forces the westward winds.
- Southward winds: Large multinationals often struggle against forces that threaten to turn the power of incumbency into the pain of bureaucracy. We refer to these forces as the southward winds.