Fast-growing companies typically have a strong Founder's Mentality®: a tremendous insurgent mission, a frontline obsession and an owner's mindset. But too often, in the pursuit of scale, companies compromise on these foundations of strong, sustainable growth. Dunigan O'Keeffe, a partner with Bain’s Strategy practice, reveals how companies can make the Journey North, so they can grow and achieve the benefits of scale without losing their Founder's Mentality.
Read the Bain Brief: The Journey North
Read the transcript below.
DUNIGAN O'KEEFFE: Fast-growing companies typically have a very strong Founder's Mentality. And that really has to do with three things: First of all, a tremendous insurgent mission, a sense of purpose, and a sense that they're changing the rules of the game and taking on existing competitors who aren't serving current customers. They also have a frontline obsession—a real intimate understanding of what's required of the front line of the business to win with customers. And lastly, an owner mindset: They worry about the speed of decision making; they worry about how money is spent. These three things together are the Founder's Mentality.
The challenge is, that's not enough. You don't just want the Founder's Mentality, you want the net benefits of size. You want the benefits of scale that allow you to beat up on suppliers. You want the ability to influence the ecosystem you're in. The challenge for fast-growing companies is how they pursue that scale and achieve the net benefits of size without compromising on the Founder's Mentality. But too often, companies unwittingly—in the pursuit of scale—give up the benefits of the Founder's Mentality.
The real tragedy is, often, they're given advice to follow the best practices of global incumbents who are choking with complexity. And that only accelerates the path of giving up the Founder's Mentality. At Bain & Company, we work with insurgents, including those in the FM100, on what we call the Journey North: How do you scale your business while holding on to the Founder's Mentality and keeping that as a strong strategic asset for you and your growth?
Really, that Journey North is around helping companies on three things. The first is, how do you maintain the insurgency? Too often, companies take for granted the clarity and specificity of their initial strategic mission. Being very clear on, okay, on our hand, can we, simply, as a full leadership team and in the front line of the business, be clear about what our bold mission is that's animating us and motivating us to bring our best. And the three or four capabilities which are truly unique, which we're going to overinvest on and be the best in the industry.
Secondly, are we clear on those individuals at the front line who on a day-to-day basis are winning against competition? We call them the franchise players. Are we clear about who those are? And are we clear on the behaviors that we collectively as a team need to live up to? The non-negotiables that will allow us to make sure that we translate our strategy into day-to-day frontline behaviors in a way which was intuitive and obvious when we were a small company, but becomes harder and harder as you scale? All of those elements are about maintaining the insurgency that is so strong.
The second question is, as I scale, how do I reduce complexity? We shouldn't take it for granted that growing means more complexity. We need to be very thoughtful, as we continue to execute on our insurgent mission, that we do so in a way that brings simplicity and speed and maintains focus on the front line. We call that microbattles. Secondly, we need everybody in the organization to feel the insurgency. We need to build a whole company of insurgents where individuals are acting like founders and with a strong Founder's Mentality throughout the business.
Lastly, as we think about our entire business and all the experiences that we're having, we need to have very strong learning systems. As we're getting larger, we're interacting with more customers and more different touchpoints. How are we capturing the benefits of that learning so we can strengthen our business model again and again and again?
The last part of the Journey North is, how can we thrive in turbulence? As a small company when we started out, turbulence was our best friend. We saw those opportunities and we were first to seize them. And that allowed us to grow against sleepy competitors. Now, as we're larger, we need to hold on to that. We need to see new profit pools as opportunities and not get oriented around protecting today's profit pools.
Well, how do we do that? One is, we have to free up resources to invest in growth. We need to simplify our businesses and ensure that we're not adding overhead as we grow and slowing down decision making. We need to simplify to fuel our growth. Secondly, we need to have a really robust discussion about what is going to be our second engine of growth. This is hard to have, because you're having this with the companies who actually have their first engine of growth still firing. And yet, we know that if you wait too long to think about how you can expand your business model and build a second engine of growth, you will run out of time. So even insurgent companies, even high-growth companies, need to be having a conversation about what is my Engine 2.
So that's the Journey North. And at Bain & Company, we feel that high-growth insurgent companies who address these elements will be able to scale while holding on to their Founder's Mentality.
Read the Bain Brief: The Journey North