Dec 4

Engine 2: A Conversation in Mumbai

By | December 4th, 2018|Insurgency, The path to Scale Insurgency|0 Comments

I just returned from a trip to India, where I had the opportunity to spend an afternoon with P.R. Kothari, who leads strategy for Indian conglomerate Larsen & Toubro (L&T).

As my colleague and The Founder’s Mentality co-author Chris Zook noted nearly six years ago in the Harvard Business Review, L&T is one of about 100 companies that has managed to consistently deliver sustained, profitable growth over the past two decades or more. In India, as Chris noted this year in The Economic Times, it’s one of only three companies—along with Tata Group and Aditya Birla Group—that have remained among the top 15 companies by market cap or the equivalent since 1970.

Mr. Kothari has been there almost all that time. Having worked at L&T for 45 years, he has one of the longest tenures there, though not as long as L&T Chairman A.M. Naik, who has served for more than 50 years in the company. Started by two Danes (you guessed it, Henning Holck-Larsen and Søren Kristian Toubro) in 1938, L&T holds leading positions across several strong businesses in technology, engineering, construction, manufacturing and financial services. With $17 billion in revenue, it has grown by over 15% annually in the last 10 years. Oh, and one fun fact: L&T’s first bridge was built for the 1957 movie The Bridge on the River Kwai.

Although most of his businesses are enjoying double-digit growth, Mr. Kothari is already thinking about next-generation businesses that will take the company forward for years to come. In other words, he’s thinking about what we call Engine 2.


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-220x207This Founder’s Mentality® topic has become quite hot, and we’re working with a lot of business leaders on how to become scale insurgents. Central to this work is the idea of micro-battles, which at their simplest help large companies rediscover the art of getting stuff done fast. Let’s introduce you to what we call the Bain Micro-battles System.

Context: The six building blocks on the journey to scale insurgency

Context matters. What matters most is the growth paradox: Growth creates complexity, and complexity kills growth. Understanding how companies respond to this core problem has led us to look at companies on two dimensions:

All great companies start as insurgents, at war against their industries on behalf of underserved […]

May 5

Create a Company of Insurgents

By | May 5th, 2017|Insurgency, The path to Scale Insurgency|0 Comments

Company-of-Insurgents220x207Insurgent companies thrive on a culture of speed, focus and a direct connection to customers. But as any leader of a large incumbent company can attest, those cultural attributes are often the first casualty of a growing bureaucracy. Meetings and deliberation swallow up speed. Process and systems muffle the voice of the front line and customers. The sheer complexity of the portfolio overwhelms the clarity of the insurgent mission.

As we discussed in the first building block, reviving growth and sustaining it starts with rediscovering the insurgency and locking it in with the people who need to deliver it. But inspiring your people to act like insurgents also involves a concerted effort to revive the insurgent culture that was so critical to the company’s ability to win against larger competitors with deeper resources. The key is to reeducate the organization about what […]

May 4

Simplify to Fuel Growth

By | May 4th, 2017|Insurgency, The path to Scale Insurgency|0 Comments

Simplify220x207Vocabulary matters in business. One of the problems many large companies face is that bureaucrats have won the vocabulary war. They want us to believe that the opposite of simple is advanced and that to simplify means to dumb down, to cut corners, to somehow be less advanced.

But for our purposes, the opposite of simple is complex. To simplify is to improve systems and processes by making them more straightforward. Importantly, simplification is also a way to redeploy. Streamlining something or making it easier to do allows you to free up resources and move them elsewhere to support other priorities.


May 3

Build Learning Systems To Reconnect with Customers and the Front Line

By | May 3rd, 2017|Fragmentation of the customer experience, Frontline obsession, Lost voices from the front line, The path to Scale Insurgency|0 Comments

Learning-systems220x207For 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 of an issue, the relationship between experience and efficiency is not so clear.


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’s also probably walking the aisle ready to advise me. All in all, she’s delivering the benefit of customer intimacy that is part of any great insurgent mission.


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 working on a new business model in parallel.

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.


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.


Mar 27

Incentives vs. insights: Responding to turbulence in China

By | March 27th, 2015|The path to Scale Insurgency|0 Comments

founders-mentality-turbulence-in-china-220x207We just finished a Founder’s Mentality 100 (FM100) session in Shanghai, where we had a full day with some of China’s leading founders. Turbulence remains a constant theme, but the source of turbulence is evolving. In our 2014 sessions, turbulence almost always meant “digital” as Chinese founders worked feverishly to move their businesses online. This year founders are defining turbulence more broadly—it includes not simply the online challenge, but also the need to respond to a fundamental softening of China’s growth outlook and the need to create a new value proposition for their employees.

What really struck me in these meetings was that founders are far less focused on “the answer” and far more intent on changing incentive structures so the new generation would be motivated to find the answer. As one founder put it: “I have built my business to thrive in today’s China. But I won’t be the one to figure out the new business model for tomorrow’s China. The answer will come from the new generation. My job is to liberate them, empower them and reward them to come up with new answers.” […]

Mar 20

Cultural workflows: Is that your mother riding that elephant?

By | March 20th, 2015|The Journey North, The path to Scale Insurgency|0 Comments

Founder's MentalityIn my recent blog post on surgical strikes, we talked briefly about “cultural workflows” and how they can slow a company down. During our eight weeks of workshops on how incumbent companies can maintain their Founder’s Mentality®, this topic came up often. So I wanted to devote a full post to exploring different kinds of cultural workflows and offer some quick ways to address them.

Cultural workflows are disruptive activities that arise from otherwise sound cultural attributes. While a given attribute may have started out as a pure positive, over time it encourages negative behaviors. What makes these behaviors so hard to manage is that they hide behind the values companies hold most sacred. As one workshop participant said, “It’s like the elephant in the room is being ridden by your mother—no matter how stinky the elephant, who wants to be seen as attacking your mother!” […]

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