Article

Founder's Mentality: Westward Wind - Lost Voices From the Front Line

As insurgent companies gain scale and broaden their scope, they often start focusing on the "average customer" rather than the most important ones.

By James Allen, Dunigan O’Keeffe and Chris Zook

Published on February 10, 2014
min read


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 industries. The best companies maintain or regain their Founder’s Mentality^® by resisting those forces. Company founders focus tirelessly on their most important customers and doing what it takes to delight them. Their deep understanding of their customers and local markets is ingrained throughout the company—from the leadership to the front line. But as insurgent companies gain scale and broaden their scope, they increasingly find themselves seeking a common language across their many geographies, products and organizational units. They start gravitating toward the law of averages. Middle management starts to talk about serving the "average customer," rather than delighting the most important ones. The result: a stale, undifferentiated customer experience. The rise of middle management "planners" with no frontline experience results in a lack of priorities. Instead of using resources to overwhelm any obstacles to growth (often called "applying the power of 10"), planners instead spread resources around democratically. Companies become trapped in their own growing bureaucracy, which obscures the customer and market realities. This typically signals the end of a company’s challenger mind-set. As the needs of its customers recede into the background, the organization develops an incumbent mind-set, defending positions rather than hustling to innovate and transform industries. In this world of averages, management meetings become a game of mathematics. A typical conversation, for example, might focus on moving average operating margins from 23.4% to 23.5%. In this environment, the company loses not just the voice of the customer, but also the voice of the front line. Corporate discussions no longer revolve around the experiences of the best frontline talent working with the best customers to deliver increasingly better products or services. Instead, spreadsheets and slide shows become the currency of corporate discussion. There is another way. Growing companies can avoid this drift toward mediocrity by zealously focusing on their core customers and building Repeatable Models® for delighting them. Such efforts require the support of an empowered front line that consistently delivers a differentiated customer experience. Large companies that have already succumbed to the "average" mind-set will find it more difficult to recover, but the journey is not an impossible one. It can be accomplished through the rediscovery of Repeatable Models: Focus. Bring back the "voice of the customer." Find and nurture the most profitable advocates for the company's offerings and concentrate resources on delighting them. Understand what your company does that is truly unique and differentiated for those core customers, and then focus on making that into a model that is scalable, transferable and repeatable across your organization. Embed. Bring back the "voice of the front line." Collaborate with your front line to turn that repeatable model into a nobler mission—a set of routines and nonnegotiables that ensure the front line can deliver the repeatable model every day to every customer. Adapt. Bring back the "insurgent mindset." Build in the right feedback loops to make sure you are in a constant state of insurgency—consistently responding to customer and competitor offerings and continually bringing the future to life, not fighting it. Main: Founder's Mentality \| Paths: One \| Two \| Three \| Perils: Westward winds \| Southward winds 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 industries. The best companies maintain or regain their Founder’s Mentality^® by resisting those forces.

Company founders focus tirelessly on their most important customers and doing what it takes to delight them. Their deep understanding of their customers and local markets is ingrained throughout the company—from the leadership to the front line.

But as insurgent companies gain scale and broaden their scope, they increasingly find themselves seeking a common language across their many geographies, products and organizational units. They start gravitating toward the law of averages.

Middle management starts to talk about serving the "average customer," rather than delighting the most important ones. The result: a stale, undifferentiated customer experience. The rise of middle management "planners" with no frontline experience results in a lack of priorities. Instead of using resources to overwhelm any obstacles to growth (often called "applying the power of 10"), planners instead spread resources around democratically.

Companies become trapped in their own growing bureaucracy, which obscures the customer and market realities. This typically signals the end of a company’s challenger mind-set. As the needs of its customers recede into the background, the organization develops an incumbent mind-set, defending positions rather than hustling to innovate and transform industries.

In this world of averages, management meetings become a game of mathematics. A typical conversation, for example, might focus on moving average operating margins from 23.4% to 23.5%.

In this environment, the company loses not just the voice of the customer, but also the voice of the front line. Corporate discussions no longer revolve around the experiences of the best frontline talent working with the best customers to deliver increasingly better products or services. Instead, spreadsheets and slide shows become the currency of corporate discussion.

There is another way.

Growing companies can avoid this drift toward mediocrity by zealously focusing on their core customers and building Repeatable Models® for delighting them. Such efforts require the support of an empowered front line that consistently delivers a differentiated customer experience.

Large companies that have already succumbed to the "average" mind-set will find it more difficult to recover, but the journey is not an impossible one. It can be accomplished through the rediscovery of Repeatable Models:

Focus. Bring back the "voice of the customer." Find and nurture the most profitable advocates for the company's offerings and concentrate resources on delighting them. Understand what your company does that is truly unique and differentiated for those core customers, and then focus on making that into a model that is scalable, transferable and repeatable across your organization.

Embed. Bring back the "voice of the front line." Collaborate with your front line to turn that repeatable model into a nobler mission—a set of routines and nonnegotiables that ensure the front line can deliver the repeatable model every day to every customer.

Adapt. Bring back the "insurgent mindset." Build in the right feedback loops to make sure you are in a constant state of insurgency—consistently responding to customer and competitor offerings and continually bringing the future to life, not fighting it.