May 6

Introducing the Bain Micro-battles System℠

By | May 6th, 2017|Founder's Mentality defined, Insurgency, Micro-battles, Net benefits of scale and scope, Southward winds, The Journey North, The path to Scale Insurgency, Westward winds|0 Comments

Micro-Battles-220x207

 We’ve been doing less blogging lately because this Founder’s Mentality® topic has become quite hot, and we’re working with a lot of business leaders on how to become scale insurgents. The biggest new developments involve micro-battles, and the purpose of this blog is to get you up to date. We’re also going to step back to provide context and lots of links to previous blogs if you’d like to explore further. […]

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. […]

Dec 23

Incumbents and the Journey North, part 2

By | December 23rd, 2014|Net benefits of scale and scope|0 Comments

Founder's Mentality - Incumbents and the Journey NorthIn September, we started a discussion exploring how our work on the Founder’s Mentality® applies to industry incumbents. In Part 1, I warned the leaders of these large, established companies that insurgents would increasingly become their main competitors, especially in emerging markets or industries. I also noted that most incumbents could do a much better job of delivering on the promise of their size and could definitely do more to liberate their people from the complexity that is sapping their energy. […]

Sep 30

Rediscovering our faith in intelligent design and secrets

By | September 30th, 2014|Death of the nobler mission, Net benefits of scale and scope|0 Comments

Rediscovering our faith in intelligent design and secretsIn his new book, Zero to One: Notes on Startups, or How to Build the Future, PayPal cofounder Peter Thiel argues aggressively that the goal of any new start-up should be to build a “creative monopoly.” By that he means entrepreneurs should aim to create a new market and be the only competitor in it (think Google in search advertising). There’s no point in becoming yet another competitor in a crowded market (think most airlines).

Thiel powerfully advocates for the role of creators in business―those companies that create what he calls “entirely new categories of abundance” (see this Wall Street Journal adaptation). He contrasts creators with undifferentiated competitors that fight endlessly (and earn little to nothing) to win a piece of a static industry. In our language, Thiel is arguing for the power of insurgents over incumbents, where the insurgent’s world is about creating new markets and the incumbent’s is too often about dividing up existing markets.He writes: […]

Sep 12

Hammer time: Why Chinese founders value spikiness

By | September 12th, 2014|Net benefits of scale and scope, The Journey North, The path to Scale Insurgency|1 Comment

Founder's Mentality - Hammer time: Why Chinese founders value spikinessDuring our Founder’s Mentality 100 (FM100) meetings in Shanghai last week, the founders kept alluding to volleyball and Lang Ping, the former star player of the Chinese women’s Olympic volleyball team (and the former coach of the US women’s team). She helped China beat the US to win the gold medal at the 1984 Los Angeles Games.

During a break, we talked to a couple of the founders about the reference. They noted that Lang Ping was known as the Iron Hammer, famed for her extraordinary ability to spike the ball and quickly bring a point to her team. Everyone knew that when the ball came to her she would handle it decisively, quickly and, more often than not, victoriously. […]

Sep 5

Step 4: Learn

By | September 5th, 2014|Net benefits of scale and scope, The Journey North, The path to Scale Insurgency|0 Comments

Founder's Mentality - LearnFor many people in business, the “experience curve” has become an artifact of the manufacturing age. While it explained a lot about market supremacy when huge, stable producers like General Motors and Caterpillar led the economy, it is less useful as a predictor of dominance in the digital world.

The concept is simple: The more a company does of something, the more it learns and the better it should get at doing it. The resulting efficiency becomes a major competitive advantage, which only increases as the company gets bigger and gains more experience. In modern industries characterized by turbulence and technological disruption, however, a feisty insurgent can very quickly render a company’s accumulated experience irrelevant. And with the global shift to services, where unit costs are less an issue, the relationship between experience and efficiency is not so clear. […]

Aug 28

Going slow to go fast… in 1861

By | August 28th, 2014|Net benefits of scale and scope, The path to Scale Insurgency|0 Comments

Going slow to go fast - Founder's MentalityFrom the raki ritual in Turkey to the peculiar institution of nemawashi in Japan, we have returned often to the theme that leaders sometimes need to “go slow to go fast.” At a friend’s recommendation, I read 1861: The Civil War Awakening, Adam Goodheart’s brilliant book on the lead-up to the US Civil War. It contains one of the most amazing examples I’ve ever come across of a leader (in this case, Abraham Lincoln) going slow to go fast.

Goodheart spends a full chapter describing Lincoln’s extraordinary, months-long preparation to craft his speech for a special session of Congress beginning on July 4, 1861. Lincoln used the speech, which was delivered in writing, to lay out his justification for the war. Goodheart writes that Lincoln’s choice of July 4 was no accident: It “signaled that in Lincoln’s mind, the business before the nation’s representatives in 1861 was somehow related to the business of their predecessors in 1776.” Goodheart continues: […]

Jul 22

Why 97% of strategic planning is a waste of time

By | July 22nd, 2014|Net benefits of scale and scope, The path to Scale Insurgency|0 Comments

Founder's Mentality - Why 97% of strategic planning is a waste of timeIn recent meetings with the CEOs of several large global companies in the financial services, industrial goods and consumer products sectors, it became clear to me that many corporate leaders are fed up with their strategic planning processes. Not to put too fine a point on it, there was general agreement that 97% of these efforts are a waste of time and rob the organization of essential energy. (The 97% they came up with wasn’t an actual data point, but it gives you a pretty accurate idea of how they feel.)

In previous blog posts, I’ve noted that while the nature of strategy has changed, our planning processes haven’t. Here are eight reasons why they break down: […]

Jun 27

The bigger we get, the smaller we think

By | June 27th, 2014|Lost voices from the front line, Net benefits of scale and scope, The complexity doom loop, The path to Scale Insurgency|0 Comments

Founder's Mentality - The bigger we get, the smaller we thinkIn meetings with clients over the past few weeks, a common theme has emerged regarding the perils of planning as companies grow. The latest instance was at a meeting in the US in which several founders on a panel were discussing the positives and negatives of being bought by a large corporation. One of them raised an issue I’ll paraphrase this way: “I don’t want this to be quoted back to me when we set this year’s budgets, but one thing has really struck me about joining a corporate parent—I’m being encouraged to think smaller.”

That echoed something I’d heard a few weeks earlier in a conversation with a partner at a private equity firm. “The bigger we get, the more conservative we’ve become,” he said. “It is now viewed as a good thing to hit the very conservative investment thesis formed at the time we did the original deal. As we grow, it is a lot harder to ‘think big’ and take risks to create a 10X deal.”  […]

Jun 12

Why trust speeds up organizations

By | June 12th, 2014|Net benefits of scale and scope, The path to Scale Insurgency|0 Comments

Founder's Mentality - Why trust speeds up organizationsIn my last blog post, I wrote about a founder’s panel I attended, where individual founders discussed how selling a company to a large corporate buyer could increase or decrease its “speed.” One of them talked about the difference between a culture of buy-in and a culture of trust, a topic worth exploring further.

This founder (we’ll call him Bob) noted that while the buy-in culture espoused by his new parent company looked good on paper, it actually amounted to a massive brake on the speed of decision making. “I’m told to get two people to approve every decision now, which is more than I’m used to, but at least it’s straightforward,” he explained. “Then I’m advised that I should really get the buy-in of a dozen more players because that will smooth things. To be frank, it often sounds like what the corporate parent is saying is, ‘A dozen more players don’t trust you to make the right decisions for the greater firm.’ And that slows me down.” The distinction he was drawing between “good buy-in” and “bad buy-in” is a crucial one for growing organizations hoping to maintain the speed and alacrity that are important components of the Founder’s Mentality℠. We generally see three kinds of good buy-in: […]

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