Founder's Mentality Blog
As a Leadership team reflecting on the company’s insurgency and growth priorities, you might be experiencing some dissonance. There’s an innate sense that your Founder’s Mentality® is still relevant, yet not as strong as it was before. There’s a lack of clarity on how big an issue this really is, and if others feel the same way.
The Founder’s Mentality survey is a starting point for understanding the extent and urgency of the change needed. The survey asks all individuals within a company five key questions.
- Is your company retaining its Founder’s Mentality as it scales? Is the sense of insurgency still alive at all levels of your organization? And can your company’s strategy translate this insurgency into frontline action?
- Is your company really gaining the benefits of size as it grows? Does your company’s strategy lead to sustainable differentiation, leadership economics and market influence? Are you actively capturing the benefits of learning?
- What are the key internal barriers that hold back growth? Does your company’s organization and performance culture enable scaling with speed?
- What are the biggest external threats that your company needs to address? Which external threats are you facing today? Which will you face in the future?
- What is your company’s ability to address these risks? Based on the survey scores and feedback from the front line, can you act decisively to change your course?
The bar of scale insurgency is a high one, and the benefits speak for themselves. Our research and survey of 300 large companies last year showed that there are measurable differences between scale insurgents and struggling bureaucracies:
- Better returns. Scale insurgents are, on average, 3.5 times more likely than bureaucracies to be more profitable than their competitors.
- Greater adaptability and resilience to change. Leaders in scale insurgents are seven times more confident that they can handle industry change, and six times more committed to the company’s insurgent mission.
- A stronger culture of meritocracy, and the ability to attract and retain top talent. Leaders in scale insurgents are much more confident about their ability to get the best people in critical roles. Furthermore, 97% of the employees in scale insurgents said they would recommend their company to a friend. Employees in struggling bureaucracies were net detractors of their company.
The three elements of the Founder's Mentality help companies sustain performance while avoiding the inevitable crises of growth.
Over the past four years, we’ve run this survey at 800 companies, covering 10,000 respondents across regions and industries. As we looked at the insights that emerged from these discussions, we believe there are six patterns that point to an urgent need for change in most companies.
- The Leadership team is not aligned on the insurgency (i.e., the customer-oriented insurgent mission and spiky capabilities). In the organizations we surveyed, only 15% of Leadership team members in a given company agreed on the top three sources of competitive advantage. This is often the first barrier to focusing and energizing the rest of the organization.
- The Leadership team is too far removed from the front line. In our surveys, almost three-fourths of the Leadership team disagreed with the rest of the organization on the top internal barriers and the main sources of competitive advantage. This highlights the need to bring customer insight and frontline voices front-and-center in the boardroom.
- Most Leadership teams are caught up in daily battles. They are preoccupied with the short term and overemphasize today’s business model over tomorrow’s sources of differentiation. This blurs the focus on building new capabilities. Over 70% respondents surveyed felt that in order to succeed in the future, they clearly needed to fundamentally rethink and upgrade their current capabilities. The survey acts as a forcing function to step back and reevaluate priorities.
- Companies have lost speed as a source of competitive advantage and the ability to solve basic customer issues. These are the most glaring symptoms of an organization that has lost its Founder’s Mentality. Over 60% of survey respondents in companies with low scores felt their company was unable to make and act upon key decisions faster than their competitors. In addition, over 40% respondents in these companies believed that frontline employees were no longer empowered to do “whatever it takes” to support their most important customers.
- Employees are net detractors. They would not recommend their company to friends or colleagues as a place to work. The survey feedback helps Leadership teams get to the root causes of employee dissatisfaction, which leads to unique insights about the company and its ways of working.
- The company is underinvesting in learning systems that can turn scale into a source of competitive advantage. One of the biggest strengths for a large company should be its ability to learn from experience, improve and outperform less-experienced insurgents. However, most large incumbents neglect this area—and we found that this was a key difference between our best and worst performers. Scale insurgents had significantly higher scores in learning.
While the survey is a powerful tool, it demands the careful and balanced interpretation of different perspectives. For example, what the front line often sees as a threat to innovation and agility is sometimes simply an attempt by the Leadership team to consolidate and realize the benefits of scale. Similarly, what the Leadership team often sees as a desire to perpetuate geographic or business unit “fiefdoms” is often a call from the front line for more empowerment and support on things that matter to them. Bringing the two sides together and uniting them around the common language of insurgency and “what matters for the customer” is critical to embarking on the journey toward scale insurgency.
The best Leadership teams use the survey as a starting point for introspection, and for engaging the organization in a richer, deeper dialogue. This very discussion is an opportunity to begin reclaiming the Founder’s Mentality, so invest your time. Here are some best practices and tips that might be useful.
- Go deep and understand the real feedback that only those closest to customers can provide. This will uncover some unvarnished truths, but recognize that some conflict is good for the organization, since it highlights the right trade-offs.
- Celebrate the pockets of insurgency in your organization. Identify best practices and insights from these pockets of insurgency. Roll them out where applicable across the company.
- Identify the no-regret moves that you can launch quickly, using the survey as a guide.
- Bring the Founder’s Mentality front-and-center on your executive agenda. Use the ambition of scale insurgency as a rallying cry for the organization.
You’ve now set the right foundation for the next stage—and you’re ready to move from the diagnostic to solutions, building on the excitement and energy that you’ve unleashed in this first step.
Forum-based learning is critical to ensure that change efforts stay on track.
Bhavya Nand Kishore is the global practice director in Bain’s Strategy practice and is based in Zurich. Dunigan O’Keeffe is a partner with the firm’s Strategy practice and is based in San Francisco.
Founder’s Mentality® is a registered trademark of Bain & Company, Inc.