Dec 22

The economics of empowerment

By | December 22nd, 2014|Revenue grows faster than talent|0 Comments

heroes v systems duotoneWe just finished our eighth Founder’s Mentality 100 (FM100) meeting of 2014, this time in Jakarta. One of our most important discussions there focused on the question of “What’s happened to our heroes?”—and that led to an exploration of what one founder called “the economics of empowerment.” Let me explain.

One of the things founders talk a lot about is how difficult it is to balance “heroes” and “systems.”  Most companies during the start-up phase are perpetually short on talent. Heroes step into the breach, doing amazing things they really have no business doing, and their exploits become the foundational stories of the company. Eventually, however, even these overachievers get stretched too thin, leading to an urgent need to “professionalize” the company. Leadership seeks to broaden the team, bring in systems to support the team and move the company to the next stage. […]

Nov 23

Closing the talent gap: Seven tips from Dubai

By | November 23rd, 2014|Revenue grows faster than talent|1 Comment

talent gap1We’ve discussed the talent gap faced by insurgent companies several times in these blog posts—noting that they face many years where their revenue grows faster than talent, leaving them in a perpetual scramble to find good people. We’ve also noted that far too many companies try to fill the gap by adding systems, rules and procedures, which only feed the bureaucracy, creating distance from the front line. To date, we’ve summarized three sets of best practices:  a) we suggested CEOs should use the talent table to match the best recruits to the most important jobs; b) we provided the case example of Yonghui, a company that has successfully brought in professionals to complement the founders; and c) we noted that the leader needs to be accountable for getting the balance right between heroes and systems. […]

Jun 17

Whatever happened to peer-to-peer learning?

By | June 17th, 2014|Revenue grows faster than talent, The path to Scale Insurgency|0 Comments

Whatever happened to peer-to-peer learning?In our meetings on the Founder’s MentalitySM, I keep running across a common theme—the decline of “adult conversation.” By this, I mean the loss of peer-to-peer learning as companies scale.

Consider these laments from meetings over the last month: […]

Apr 23

Recruiting and the power of astonishment

By | April 23rd, 2014|Revenue grows faster than talent|0 Comments

High VoltageWhile in Shanghai a few weeks back, I was talking to one group of founders about the importance of recruiting. They mentioned two things: First, they take personal accountability for all senior recruiting. Second, they ask each senior recruit for a “rapport d’étonnement” after 100 days. By the time this phrase made its way from French to Chinese to English, it was described to me as a “shock report,” which I found a bit perplexing. But with further clarification, I understood the concept and loved it.

The founders’ first point was that recruiting senior talent was their No. 1 job. They had made some disastrous mistakes in recruiting a few years earlier and concluded that they had delegated too much of the task to their human resources director and headhunters. In seizing back control, they argued that they were the only ones who could really determine “fit”―that vague but critical set of characteristics that suggest a new recruit will work well with the team, while understanding, nurturing and building upon the firm’s culture. […]

Apr 22

Passing on the culture of business building

By | April 22nd, 2014|Revenue grows faster than talent|0 Comments

cranesI was in Jakarta recently meeting with founders of some of Indonesia’s leading companies. One of these was Dr. Hc. Ir. Ciputra, a serial founder who has started and floated three businesses and is one of Indonesia’s top philanthropists. One of these businesses, the Ciputra Business Group, specializes in residential and commercial real estate projects. Dr. Ciputra is the company’s president commissioner (in addition to founder and chairman). We met at the company’s new headquarters, in the center of the Ciputra World Jakarta complex: a $1.3 billion, 12-hectare development in one of the top commercial and office areas of Jakarta. When completed, it will consist of 15 towers that will include shopping centers, several hotels, apartments and condominiums, and a large green.

After introducing me to his leadership team to discuss Founder’s MentalitySM, Dr. Ciputra explained his belief that maintaining Founder’s Mentality at the company requires that he pass on a culture of business building. […]

Apr 18

Helping the lettuce grow: Training and scale

By | April 18th, 2014|Death of the nobler mission, Revenue grows faster than talent|0 Comments

baby lettuceIn this blog, we’ve explored specific actions founders and professional managers can take to capture the benefits of scale and scope while retaining the Founder’s Mentality℠. In earlier posts, we laid out the challenge and three important actions for overcoming it: storytelling, setting up the systems and capabilities table and focusing senior executives’ time on integration.

A fourth action―and one that company leaders too often leave to others―is training. As a number of the attendees at our recent Founder’s Mentality 100 (FM100) meeting in Shanghai emphasized, founders themselves are in the best position to pass on the Founder’s Mentality to future generations. Founders have a responsibility to ensure that the company is managed according to its principles; training is one of the last things they should let go of as the company scales up. […]

Apr 17

Bringing in the professionals

By | April 17th, 2014|Revenue grows faster than talent, The unscalable founder|0 Comments

FuzhouI wrote this on my flight from Fuzhou to Shanghai after a wonderful set of meetings with the founders and president of Yonghui Superstores. This is an amazing Chinese success story, although the founders are the first to warn that it is far too early to claim victory. It is also a perfect case study of how founders can professionalize their fast-growing company and prevent it from aging prematurely without straying from their Founder’s MentalitySM.

The two Zhang brothers—Xuansong (the current chairman) and Xuanning (the CEO)—launched their first stores in Fuzhou in 1998. They experimented with nine smaller-format stores before opening their 10th store in 2000 using the Yonghui brand and format. Their mission was to provide the mass consumer with safe, fresh produce at reasonable prices. Their one major business-model innovation was to buy fresh food directly and sell it themselves (vs. working through distributors and having others sell fresh food via concession). […]

Apr 10

Benga: The best of cultural integration

By | April 10th, 2014|Revenue grows faster than talent|1 Comment

BengaIn our discussion about the importance of storytelling in keeping the Founder’s Mentality℠ alive, we mentioned that it is critical to tell stories of how new recruits have added to the original culture, making it stronger and richer.  When I talk to folks about this, I like to tell the story of Benga.

Just before my recent trip to Asia, I was in Kenya recording tribal music as part of my work with Singing Wells, a nonprofit devoted to preserving and promoting the unique music traditions of East Africa. We spent four days in Nairobi recording most of the surviving stars of the Benga movement. […]

Apr 8

The systems and capabilities table

By | April 8th, 2014|Revenue grows faster than talent, The complexity doom loop, Uncategorized|0 Comments

Strategy on a handAs companies seek to grow and achieve scale while maintaining their Founder’s MentalitySM, they face one constant: the tension between building a professional organization and maintaining a company’s entrepreneurial energy.

As we’ve discussed previously in these blog posts, companies can and must thoughtfully add professional management without destroying the founding culture. We’ve talked about the value of “upside-down management” and adding structure without sinking into the quicksand of bureaucracy. None of this, of course, is clear cut. For a fascinating look at the lively debate around the wisdom of replacing founders with outside talent, consider the well-argued, but opposing, viewpoints of Ben Horowitz (on behalf of founders) and Reid Hoffman (in support of professional management). […]

Apr 5

Transplanting talent: Learning from Richard and Ronald

By | April 5th, 2014|Revenue grows faster than talent|0 Comments

fm-blog-4-04-14-transplant-220x207For many threatened with long-term or acute organ failure, organ transplant may be the only option. The greatest risk to these patients, aside from the inevitable risk that comes with surgery, is tissue rejection. Their immune systems, paradoxically, set about to destroy the one thing that will save them. Physicians have learned to mitigate this risk by focusing on four major factors:  […]

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