Why firms should re-discover their founder's mentality

19 February 2019

Organisations struggling to grow need to re-discover their founder’s mindset to re-energise staff.

That was the message from Chris Zook, co-author of The Founder’s Mentality: How to overcome the predictable crises of growth, at WBS London at The Shard.

In the public lecture held in conjunction with Thinkers50 and Harvard Business Review, Mr Zook argued that his research into the central question of why profitable growth is so hard to achieve led him and his co-author James Allen to conclude that it is problems inside the company, not the external environment, that are the main barriers.

Mr Zook believes the paradox of growth is that scaling adds layers of complexity, which is "the silent killer of growth".

His research has found that the best way to combat this is to embrace the three elements of the ‘founder’s mentality’.

“Firms should be asking; can everybody in the company state our strategy and how we are unique? These are the crown jewels of the company - but yet most can’t,” says Mr Zook, who is a partner at Bain & Company, leading its Global Strategy Practice.

"The founder's mentality is not about individual founders per se, but about the attitudes and behaviours that are common across the most sustainably successful companies with the most loyal and energised employees."

This is, says Mr Zook, what happened when Steve Jobs returned to Apple and his successors are generally reckoned to be carrying on in the same vein. Proof that the founder's mentality can be learned and applied more widely.

The three elements are:

  1. Insurgent mission: Organisations need to remain focused on what makes them unique and having a higher purpose. “When you lose that, you lose the soul of the company,” says Mr Zook.
  2. Frontline obsession: Every founder starts on the frontline, developing and selling the product, but as they grow the company Mr Zook says they create layers that “muffle the sound of the customer, become internally focused, and the organisation becomes a discouraging place to work for frontline employers”. He adds: “If you begin to discourage people at the frontline and not make them feel like heroes, you lose an amazing source of innovation and talent. Instead, you need to have an obsession with front-line employees.”
  3. Owners mindset: For the founder the organisation is their baby, but as it grows Mr Zook says “all the distortions of bureaucracy set in and it becomes more important sometimes to look good than to be good, and avoid responsibility and blame, as opposed to stepping up”. When this happens, says Mr Zook, organisations are then vulnerable to faster companies that have the founder’s mentality of taking on causes for consumers.  

Following these three elements will enable companies to re-establish the culture within their organisation to start the process that can lead to vital innovations and growth.

Mr Zook added: “Looking at hundreds of companies around the world, we found that founder-led companies, or companies where the founder was still very central to the operation, performed more than three times better than all other companies.”

 
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