Videos on the Founder’s Mentality
Most fast-growing companies aspire to global leadership in their industries. They often start as insurgents: fast, agile and adaptable. But to win in the long term, they must scale, often losing what we call the Founder’s Mentality. Bain’s James Allen explains the elements of Founder’s Mentality and the winds that can blow a company off course.
Insurgent companies are defined by a special mission and a clear focus that motivates and inspires employees. But as they grow, these companies risk losing the traits that made them insurgents in the first place, making them vulnerable to the next wave of fast-moving, inspired insurgents. Chris Zook discusses the three elements that define insurgency and the importance of recapturing insurgency if companies have lost it.
As companies grow and serve more customers, they also become more complex. As complexity grows, decisions are increasingly made by people who are distanced from the front line and have never made a product or served a customer. According to Chris Zook, great leaders maintain a short distance between the leadership and the front line.
Growth threatened to disconnect a successful company founder from his most important employees. But he reconnected with the employees on the front line to help revive and expand his company’s insurgency and its innovative spirit. It’s the story of Jaipur Rugs—the story of Founder’s Mentality in action.
Insurgent companies often watch their incumbent competitors with envy, pining after the benefits of scale: leadership economics, learning systems and market influence. Insurgents naturally pursue these advantages, but some do so at the cost of their culture. Companies with a Founder’s Mentality have an obsessive focus on the front line, an owner’s mindset and other cultural elements that make them competitive. These elements are at risk when companies follow the default path and can turn a promising insurgent into a struggling bureaucracy.
Insurgents are at war on behalf of an underserved customer segment. How can they capture the benefits of scale and scope without bogging themselves down with complexity? How can they continue to embrace turbulence when they are no longer the disrupter? James Allen outlines six steps for companies concerned with these issues.
In this video, James Allen advocates for the evolution of traditional strategic planning practices. In “Strategic Planning 1.0,” companies often focus so much on math that they fail to earnestly debate strategy. The result is planning that serves bureaucrats rather than the kings on the front line delivering on the customer promise. A more effective approach ties strategic planning more closely with strategy and people, and allocates both money and talent based on future growth instead of last year’s revenue.