Founder's Mentality Blog

Westward Wind: Revenue Grows Faster than Talent

The golden years when a company has all the skills it needs to be successful are usually short-lived.

Par Chris Zook, James Allen, et Dunigan O'Keeffe

First published on mai 05, 2013
min


As insurgent companies gain scale and scope, they can easily succumb to a number of forces—we call them the four westward winds—that push them to become more like the dominant incumbents in their industry. The best companies maintain or regain their Founder’s Mentality^® by resisting those forces. Figure 1 As companies grow, they encounter a set of forces that tend to push them off course and add complexity Behind the early success of most insurgent companies is a high-performing team of dynamic, talented individuals who have a clear understanding of the company's mission and implement it passionately. They are typically close to the founders and to their vision of what the company should be. But the golden years when a company has all the skills it needs to be successful are usually short-lived. Learn more About the Founder's Mentality The three elements of the Founder's Mentality help companies sustain performance while avoiding the inevitable crises of growth. Fast-growing insurgents quickly discover that while they don't have a revenue problem, they have a talent shortage. They can't scale up their teams quickly enough to keep pace with opportunity and are faced with two options. The first—and most often chosen—is to take a page from the playbook of their large incumbent competitors. They put in place a series of procedures and processes intended to translate the original founding mission into a rule book. To keep up with growth, these insurgent companies often hire vast teams and professional managers with little frontline experience. For a while this seems to work. It solves the immediate talent problem by opening the floodgates to second-tier talent who are comfortable with a more process-oriented company. But what the leaders soon discover is that rather than create a sustainable organization, they have created a bureaucratic company filled with planners. The other option is to make sure that revenue can scale faster with existing talent. Doing so requires a ruthless focus on the core and the Repeatable Models® that define it. It means expanding using those Repeatable Models. This allows existing talent to take on and run new ventures, supported by a set of nonnegotiable principles and scalable routines for execution. It also means rejecting the so-called best practices of incumbents. Designed for generalist managers, they won’t work in this scenario. Instead, the company focuses on making sure the practices that led to its early success are repeated as it expands. This creates bigger jobs for the best talent and offers a powerful tool for training new employees. It preserves and expands the unified mission that the early team shared and ensures that it cascades down to the front line. Insurgents who do this can stay on course to achieve the benefits of scope and scale, maintain their Founder’s Mentality and avoid building a value-destroying bureaucracy. Related Founder's Mentality®: The Westward Winds As insurgent companies gain scale and scope, they also encounter a number of forces that threaten to drive them away from their Founder’s Mentality. Founder's Mentality^®, Great Repeatable Models^® and Repeatable Models^® are registered trademarks of Bain & Company, Inc.

As insurgent companies gain scale and scope, they can easily succumb to a number of forces—we call them the four westward winds—that push them to become more like the dominant incumbents in their industry. The best companies maintain or regain their Founder’s Mentality^® by resisting those forces.

As companies grow, they encounter a set of forces that tend to push them off course and add complexity

Behind the early success of most insurgent companies is a high-performing team of dynamic, talented individuals who have a clear understanding of the company's mission and implement it passionately. They are typically close to the founders and to their vision of what the company should be.

But the golden years when a company has all the skills it needs to be successful are usually short-lived.

Learn more

About the Founder's Mentality

The three elements of the Founder's Mentality help companies sustain performance while avoiding the inevitable crises of growth.

Fast-growing insurgents quickly discover that while they don't have a revenue problem, they have a talent shortage. They can't scale up their teams quickly enough to keep pace with opportunity and are faced with two options. The first—and most often chosen—is to take a page from the playbook of their large incumbent competitors. They put in place a series of procedures and processes intended to translate the original founding mission into a rule book. To keep up with growth, these insurgent companies often hire vast teams and professional managers with little frontline experience.

For a while this seems to work. It solves the immediate talent problem by opening the floodgates to second-tier talent who are comfortable with a more process-oriented company. But what the leaders soon discover is that rather than create a sustainable organization, they have created a bureaucratic company filled with planners.

The other option is to make sure that revenue can scale faster with existing talent. Doing so requires a ruthless focus on the core and the Repeatable Models® that define it. It means expanding using those Repeatable Models. This allows existing talent to take on and run new ventures, supported by a set of nonnegotiable principles and scalable routines for execution. It also means rejecting the so-called best practices of incumbents. Designed for generalist managers, they won’t work in this scenario.

Instead, the company focuses on making sure the practices that led to its early success are repeated as it expands. This creates bigger jobs for the best talent and offers a powerful tool for training new employees. It preserves and expands the unified mission that the early team shared and ensures that it cascades down to the front line. Insurgents who do this can stay on course to achieve the benefits of scope and scale, maintain their Founder’s Mentality and avoid building a value-destroying bureaucracy.