May 2

Refocus the Operating Model on Your Franchise Players

By | May 2nd, 2017|Insurgency, The path to Scale Insurgency|0 Comments

Franchise-players220x207As they drift along the default path toward struggling bureaucracy, companies very often lose focus on the employees who really matter—those in mission-critical roles. We refer to these employees as “franchise players.” They are the people who deliver the insurgent mission to customers.

Imagine, for instance, I’m a big box specialty retailer of kitchen and bathroom plumbing fixtures. My insurgent mission is to deliver “well-designed, contemporary kitchen and bath fixtures at wholesale prices.” Now imagine I’m a consumer attracted by that mission and I head into the store to buy a modern rain shower-type shower head. Who delivers that insurgent promise to me?

Well, first it must be the store category manager who is responsible for the shower head aisle. She has arranged the aisle, kept it clean, and made sure the right choices are easy to find. She is also probably walking the aisle ready to advise me. All in all, she is delivering the benefit of customer intimacy that is part of any great insurgent mission.

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May 1

Build Engine 2 to Challenge Industry Rules and Boundaries

By | May 1st, 2017|Insurgency, The path to Scale Insurgency|0 Comments

Engine-2-220x207Incumbent companies are notably bad at strategic adaptation and will always find it difficult to respond to the threat posed by insurgents in their industries. Yet sustainable growth often demands the ability to explore and commit to new revenue streams to offset the natural slowing of a mature core business. Leadership’s first priority has to be giving the core business model more room to run by reviving the Founder’s Mentality® and dialing in growth led by the front line. But leadership also has to entertain the notion of throwing out the old model and working on a new one.

These things don’t have to be mutually exclusive—scale insurgents focus on optimization and innovation at the same time. The challenge involves mindsets. Most large companies have to force themselves to adapt their strategy-development process to cope with the chronic turbulence and uncertainty of global markets. This rarely comes naturally to an organization vested in the status quo. Large companies also have to look at the innovation challenge through a new set of lenses. They have to upend an incumbent’s propensity to fight the future and must encourage people to imagine how they can use the company’s biggest assets—scale and accumulated experience—to disrupt markets rather than defend them.

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Apr 30

Rediscover the Insurgency and Capability Spikes to Accelerate Growth

By | April 30th, 2017|Frontline obsession, Insurgency, The path to Scale Insurgency|0 Comments

Rediscover-insurgency220x207People who work for insurgent companies are on a mission to redefine their industries. They know what their company stands for, and they believe its offerings can transform an underserved customer segment. They have a clear bias for action and a loathing of bureaucracy.

But as these same companies evolve into industry leaders, the sense of insurgency that fueled their growth often wanes. People begin to define themselves by the timeworn rules of their industry and start defending the status quo rather than continuously reimagining it.

The first building block on the path to scale insurgency, then, is to rediscover the insurgency and lock it in with the key people who must deliver it. Think about three things here.

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Feb 6

Leon: Founder’s Mentality in Action

By | February 6th, 2017|Frontline obsession, Insurgency, Video|0 Comments

It’s popcorn time again.   A while back we offered up a little film on Jaipur Rugs and how the company’s founder and his leadership team kept their insurgent mission alive by connecting their weavers and customers.   Now we tell the story of UK-based fast food chain Leon and the founder’s quest to answer a simple question:  “What if God Made Fast Food?”

Please enjoy this remarkable story of Founder’s Mentality in action.  As you watch the video, ask yourself:

  1. Are our people as passionate about the insurgent mission of our company as Leon’s team?   (For that matter, you might ask whether your own company still has a clear insurgent mission.)
  2. Does this passion translate into a different customer experience?   Does your company have the same sense of frontline empowerment, where each team feels like mini-founders transforming their industry?

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Dec 29

State the Obvious

By | December 29th, 2016|Death of the nobler mission, Insurgency|0 Comments

switch-220x207I’ve just returned from Argentina where I had a chance to meet with the management team of Mercado Libre, Argentina’s largest company by market cap, and one of four Argentinian unicorns (insurgent companies valued at greater than $1 billion). As often happens in these meetings, I was able to see Founder’s Mentality in action: In this case, Marcos Galperin, the CEO and founder, explained that what really defines his team is its profound belief in technology and its ability to continually disrupt industries. The Mercado Libre story also provides a simple lesson: Talk about the obvious. More on that in a moment.

First, a bit of background on the company. A group of Stanford Business School students founded Mercado Libre in 1999 in a garage in Buenos Aires while finalizing their studies.  The founder, Marcos Galperin, is still the current CEO. The company has emerged as the largest online retailer in Latin America and Galperin is recognized as one of the world’s top entrepreneurs. In addition to being named Argentina’s Entrepreneur of the Year (2012), Fortune named him one of the top entrepreneurs under age 40 in 2010, an honor he shared with Mark Zuckerberg (Facebook founder) and Marc Andreessen (Netscape co-founder).  […]

Dec 28

How to Super-size the Economy

By | December 28th, 2016|Frontline obsession, Insurgency, Owner mindset|0 Comments

founder-special-sauce-220x207One of the new movies on offer this holiday season is the Michael Keaton film “The Founder,” which depicts how Ray Kroc’s relentless drive turned a small California restaurant into the ubiquitous McDonald’s chain.

Earlier this month, the Wall Street Journal published an op-ed James Allen and I wrote called “The Company Founder’s Special Sauce” (subscription required, or view the digital reprint on Bain.com). In it, we noted that Kroc epitomized many of the traits of the Founder’s Mentality. Indeed, his autobiography, Grinding It Out, was one of many books by founders I read during our years of research for our book, The Founder’s Mentality. […]

Dec 28

FxE=R: Finding the Right Balance

By | December 28th, 2016|Founder's Mentality defined, Frontline obsession, Net benefits of scale and scope, The curse of the matrix, The Journey North|0 Comments

Finding balanceEarlier this year, I used the fading summer months as an excuse to choose a nice pub in the bucolic London suburb of Richmond to meet with Richard Rose and Noel Collett, the respective chairman and chief executive of Crawshaws. What I didn’t expect in such leafy surroundings was a math tutorial, but I came away with a new understanding of a simple equation: FxE=R.

Let’s back up. I have long been fascinated by Crawshaws, which is essentially a company of local butchers. Using the language of the Founder’s Mentality, you can tell its story simply. Crawshaws’ insurgent mission is to redefine the fresh meat industry by combining the best of a local butcher shop (community orientation, entrepreneurship and devotion to serving local consumers) with the best of a chain grocer (size, sophistication and central buyers who can secure great prices on fresh meat). The franchise players—the people with the mission-critical roles in such a company—are the local butchers (who deliver intimacy) and the national buyers (who deliver scale). How you create a company that strikes the right balance between them was the key question on our agenda. […]

Nov 29

Event: Facebook Live with Chris Zook

By | November 29th, 2016|Video|0 Comments

Chris Zook

Harvard Business Review hosted The Founder’s Mentality coauthor Chris Zook for a Facebook Live presentation on December 5.

Chris explained the principles of his best-selling book and took questions from viewers.

Watch a replay of the presentation below.

Oct 24

The Key Traits of Great Founders

By | October 24th, 2016|Insurgency, Video|0 Comments

Most successful businesses start off with a clear insurgent mission on behalf of underserved customers. They are at war with their industry and each employee understands the company’s bold vision—and is inspired by it. Yet as a company grows over time, this insurgent mission and sense of purpose can become diluted.

Our research of hundreds of founders across more than 40 countries has shown that great founders consistently work hard to maintain that clear insurgent mission. They have a laser-like focus on the long-term goals of their business. Great founders listen to their customers and are always looking to innovate and push the boundaries to stay ahead.
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Aug 22

Building Loyalty Through Spikiness

By | August 22nd, 2016|Insurgency|0 Comments

airplanes-istock-220x207We’ve written a lot in these blog posts about the power of leadership economics and how important it is to be spiky—to concentrate all your resources on a few critical battles to overwhelm your competition. We’ve also noted that most incumbent companies have a lot of trouble with this. Instead of constantly trying to free up resources from activity X so they can redeploy them to build leadership in activity Y, they spread internal investments around more or less democratically, budgeting an annual 2% to 3% bump for everybody.

The problem with this is that by trying to be good at everything, it is difficult to be great at anything. Yet leaders of large, complex companies continue to budget this way because the internal battles for resources can be fierce and leaders are reluctant to penalize teams that are working hard, even if their businesses show less promise than others. Eventually, of course, the cuts must come as mediocre parts of the business wither. And when they do, the effect can be brutal. Managers who are used to getting a regular 2% bump each year inevitably feel like losers when leadership shifts resources to others. The bigger your budget, after all, the more important your business must be, right? […]

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