Founder's Mentality Blog
We introduced in a separate blog post the Bain Micro-Battles SystemSM, which involves the Win-Scale model (how you run a micro-battle) and the Amplify model (how you run a portfolio of micro-battles). We then introduced the story of Freddie, to emphasize how important behavioral change is to running individual battles and a portfolio of battles. Now, we turn to the key skills you’ll build as you work on winning, scaling and amplifying. This blog post covers the skills involved in winning.
Five quick contextual points:
- Micro-battles are the “how” of becoming a scale insurgent. You run each micro-battle like a microcosm of the company you want to become.
- Each micro-battle team is trying to do two things simultaneously: a) take a targeted strategic initiative and translate it into a prototype that can be tested in the market; and b) take the winning prototype, turn it into a repeatable model and roll it out across the organization. The first part is about winning and involves rediscovering your Founder’s Mentality®. The second part is about scaling, which allows you to take advantage of your size.
- The key to leading a micro-battle is making sure the team balances these two objectives, because they often conflict. Winning is about making the problem small enough that you can test the next prototype. Scaling is about making the solution big enough that it has a material impact on your company’s bottom line. You need both.
- There is a big behavioral component to getting this balance right, and the Leadership team must constantly focus on the behavioral change required and bring in the right training. We referred to this as “field and forum” training. Some of the training is simply the coaching that occurs day-to-day as you fight the micro-battles (field), and some of the training is a set of formal interventions (or forums) to keep teams on track.
- But there is also a big skills-development component to this. Running a micro-battle is hard. It will test existing capabilities and require adding new muscles.
The winning skills are those of a company with a strong Founder’s Mentality. The exam question is, “How do we identify the critical first failure points in our strategic initiatives so that we can start working on the hardest things first―those that will require many market tests and adaptions?” This requires two sets of skills:
- moving from strategy to testing prototypes with the right customer; and
- pivoting quickly based on market feedback (and the right help from the Leadership team).
Moving from strategy to testing prototypes with the right customers
All good strategies ultimately align the organization around a few critical elements: a clear ambition (the insurgent mission and a set of full potential targets); a common view of “where to play” (we’ll focus on these specific, properly defined markets); a common view of “how to win” (our spiky capabilities, Repeatable Models® and common instincts); and a clear set of strategic imperatives, which includes very specific actions we’ll take to win in the market and how we’ll measure success.
I’m sure you’re nodding your head here. But most companies spend remarkably little time really focusing on those specific actions needed to win in the market. Many leaders believe they have a strategy when they conclude they must:
- win in China;
- lead in digital;
- be “customer first”;
- be the best home for the talent that matters.
These are aspirational chapter headings, but they aren’t strategy. They don’t really say how you intend to pursue those aspirations or clear the biggest obstacles. This is where micro-battles come in. They develop the skills you need to move from chapter headings to the actual novel.
Translate strategic intent into a micro-battle, by defining the most important failure point and a hypothesis on how to deal with it. I was on a panel with two CEOs of leading multinationals not long ago, and we were talking about micro-battles. I raised this issue of translating strategy into micro-battles by identifying failure points, and one of the CEOs turned to the other and said, “Isn’t it odd that the bigger you get as a company, the more a single rule applies: Every strategic initiative takes exactly 18 months … to fail.”
His point was that large incumbents typically lay out big strategy initiatives (chapter headings) and begin work on all the easy things first. Phase One of the strategy takes a good 12 months tackling the easy things. Then halfway through Phase Two, the executive committee turns to the hard things―and begins to fail spectacularly. The cost of failure is high because the company has spent more than a year and lots of money on easy things and is now losing confidence and ultimately eating those big sunken costs.
The CEO went on to say, “One of the most important requirements of a leader is to translate a strategic initiative into the most important failure point and to focus the organization on that big problem early. It will demand lots of testing and lots of low-cost failure from the outset.”
This is a micro-battle. And with micro-battles, the very first step is to identify the most critical failure points in your strategy. This requires specific action at all levels.
- The Leadership team: The executive committee is accountable for strategy and is therefore accountable for deciding which strategic initiative the micro-battle team should pursue. This takes the form of a micro-battle mission, which clarifies the strategic intent and the “unit of experience” the micro-battle will attack―that is, the specific metric requiring immediate improvement that will be the ongoing focus for experimentation and learning. The mission statement then suggests a hypothesis about what the potential failure point is and what kind of testable prototype would best address it. It then sets out how the prototype could be turned into a repeatable model and which of the company’s spikey capabilities that model would address. Finally, the hypothesis should include an assessment of the likely rollout model and which behaviors will likely need to change.
- The micro-battle team: The first act of the micro-battle team is to rewrite the micro-battle mission and either reconfirm or adapt the hypotheses set out by the Leadership team. A key part of this is to confirm (or not) whether the team agrees with the failure point and the proposed prototype.
- The cycle: Then, the micro-battle team tests and reviews these hypotheses, reporting every four weeks to the executive committee (or the subgroup running the Leadership meeting).
Ensure that the failure point can be tested with the right customers using the right prototype. There’s an art to this. It is not enough to say, “The failure point of this strategic initiative is X.” You have to follow up with: “A solution to X can be tested with these key customers through this specific prototype until we get it right.” This is iterative. There is no sense in defining a failure point unless you can see your way to testing a solution with prototypes and customers. NASA scientists didn’t just say, “We know we want to go to the moon, and the biggest potential failure point is how to get three astronauts there and back alive.” They went further and said, “We’re going to figure this out through a series of smaller tests, proving each point to the best of our abilities. That will either build to a solution or keep the costs of failure to a minimum.”
The design of the prototype is critical. You want to fail fast and adapt quickly, but doing so meaningfully demands clarity around which customers really matter and rigor around what type of feedback you gather. In many cases, your test subjects will be traditional customers outside the company, and this can involve nuances. If you want to test a new beer promotion, for instance, you need to get it in front of beer drinkers, but you also need input from your on-trade partners (bars, restaurants). In other cases, the customer is internal―folks in the organization who will be most affected by the proposed solution. If you want to test a major cost-reduction initiative as an airline, your key “customers” might be pilots and flight crews.
Develop the right facts. Micro-battles aren’t “micro-hunches,” and you can’t rely on your gut instinct to determine whether the customer likes your latest prototype. A key skill is to sort out the set of analytics that will give you the most relevant insights into what your customer is really thinking. You also have to create alignment around the best way to collect that data via testing. You need to go deep on things like “preference drivers” and competitive benchmarking. You need to worry about the size of the target customer segment and the average lifetime value of these customers. One of the micro-battle leader’s toughest jobs is to decide which facts to collect via prototype testing to ensure the team is producing a winner.
Pivoting quickly using market feedback (and the right help from the Leadership team)
Once you’ve defined the first failure points and set up the right prototype, you’ve got to run the micro-battle through its paces. This requires mastering a number of skills.
Agile development. The Win-Scale model depends on Agile ways of working, and instead of trying to explain Agile in great detail here, I’ll refer you to the work of my Bain colleague Darrell Rigby, the head of our Innovation practice. But I will focus briefly on a few essential points that are critical to micro-battles.
- The team is everything. The micro-battle leader needs to be fully empowered to assemble the right team, one that straddles two of the great conflicts in large organizations: scale vs. intimacy and routine vs. disruption. That means the team needs members who can fight for creative solutions that put the needs and desires of individual customers or markets first. But it also needs those who can fight for the benefits of scale, recognizing that standardized routines and processes create efficiencies that also benefit customers.
- No, teamwork is everything. But a team isn’t just about assembling the right mix of skills and corporate affiliations. It will fail utterly if these folks won’t (or aren’t empowered to) work together. Micro-battles are about solving problems across functions, across siloes. Teams need to rediscover the founder’s reflexive ability to “gang tackle” the customer issue in front of them with relentless focus and experimentation. The debates should be resolved within the team, and “running to the bosses” is not allowed. Team members are there to develop the prototype, launch it, fail and adapt―not to “represent their function” on behalf of their line bosses. Everything is about what’s right for the customer, not what’s right for my role in the organization. The objective is to break those old habits while solving the company’s thorniest strategic problems.
- There’s power in a minimum viable product. I’ll go back to NASA. The Apollo mission didn’t start with a flight to the moon, but rather focused on incremental missions, each testing the next most important thing. In the same spirit, the micro-battle leader has to resist the incumbent impulse to wait until a product or solution is fully featured before it’s put in front of customers. Agile development relies on creating a minimum viable product (MVP) and improving it incrementally based on a regular cycle of test and learn. Dozens of people will have ideas of things to add, and the leader would be foolish to ignore them. But job No. 1 is to stay focused on the next thing to test the next time. She should maintain a clear backlog of all the things that might go in the final product, but she can’t do it all, all at once. Trying to will only slow things down.
- Keep all other noise to a minimum. Running the Win part of the Win-Scale model is deep work, which author Cal Newport defines as the ability to focus without distraction on a cognitively demanding task. The deep work of a micro-battle is developing the next prototype, collecting the right feedback and figuring out how to adjust. As Newport points out in his book, social norms, new technologies, human behaviors and incumbent ways of working all conspire to distract you and tempt you with shallow work. The leader’s job is to deflect the shallow work so her team can focus on what matters.
Active listening (or rooting out failure in the blah, blah, blah of customer feedback). It is easy to get good customer feedback. Ask the right questions in the right way, and nice people will be nice. It is a lot harder to get great customer feedback―namely, the thoughtful feedback of thoughtful customers pointing out how many ways you failed with the latest prototype. The work of the micro-battle team is to find the failure points, not collect cheers. The team’s job is to learn as much as it can from each cycle, so the next product will be better. That’s why it’s so important to define the hard metrics that measure success, then hold the prototype to these exacting standards. The leader’s motto should be, “We’ve built in the time to fail, so let’s fail spectacularly.”
Mastering the pivot. Every failure offers the chance to learn and adjust. So the leader must develop the skills to pivot effectively, based on great customer feedback. Every pivot is a sign the team is learning and moving forward, something the leader needs to champion. The worst kind of incumbent behaviors are about “fighting your corner” and making sure your idea “prevails.” Micro-battle teams need to develop the opposite skills―celebrating together the abandonment of a feature that didn’t test well, cheering the idea that has morphed over time into something that is now working.
Making the Leadership team work for the Win-Scale team. Elsewhere in these blog posts, we’ve been clear that we’re placing a big burden on the micro-battle teams―that is, they are accountable for running their micro-battles like the microcosm of the company you want to become. A big part of that is helping change the leadership behaviors of the company’s most senior executives. In that sense, the monthly Leadership meetings could be seen as a burden. But that is the wrong way to look at it. The micro-battle leader must make these sessions work for her team. She must develop the skills that will let her make the most of these sessions with top executives to:
- get advice on the next pivot, based on market feedback;
- adjust team resources;
- identify other micro-battle teams with similar issues/insights; and
- remove obstacles that are preventing her team from operating at full potential.
This isn’t easy. It might conflict with the demands of the Leadership team. Top executives might be stuck in incumbent behaviors that are hurting―not helping―her team. But she should call out these issues and ask for help. The whole point of micro-battles is to solve problems by challenging the old ways of doing things.
This is how a micro-battle comes to resemble the scale insurgent your company wants to be. The battle leader is, quite intentionally, a maverick. Make problems smaller and act. Stay externally focused, and get the right facts and feedback you need to fail and pivot effectively. Don’t let the team get distracted by all the shallow work of the organization. Keep focused on the deep work only you can do. Celebrate the great failures and the wonderful successes. Tell it like it is to your bosses, and get the help you need to move your team forward so the company can win in the marketplace.
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