Founder's Mentality Blog
People who work for insurgent companies love their products. They are on a mission to redefine their industry on behalf of an underserved consumer segment. But as they grow, one of the greatest risks these companies face is that their people begin to lose touch with the insurgent mission and define themselves instead by the timeworn rules of their industry. The first step of our Journey North is about how you maintain the insurgency by locking it in with the people who must deliver it. Here are a half a dozen things we’ve learned (with a nod to Microsoft’s Tren Griffin):
- Define the insurgency and how it answers “Why?” One of the hardest questions for an incumbent to answer is “Why do we exist?” For many who work in these companies, the only answers appear to be financial or competitive—to increase shareholder returns, for instance, or to take share from a rival. Insurgents, by contrast, answer from the gut. Anyone at CavinKare, the Indian consumer products company, would say, “Whatever a rich man enjoys, the common man should be able to afford, and our job is to find a way to solve this.” For Brazilian retailer MagazineLuiza the answer is: “To give aspiring lower-class consumers the opportunity to own furniture, ‘white goods’ and consumer electronics by helping them solve their financing needs.” At Ciputra, the Indonesian construction firm, it is about transforming the industry by keeping promises and focusing on extraordinary customer service. For Leon Restaurants, the UK-based “naturally fast food” chain, it is about leading the wellness revolution.Given the power of the founding insight, it is no mystery that a central element of most successful corporate transformations is a rediscovery of the insurgent mission—be it IBM (developing integrated technology solutions for the most complex companies), LEGO (returning to the brick and to imaginative play) or, more recently, Unilever (redefining sustainability for the next generation). Refocusing a company on a tangible quest helps capture the discretionary energy of its people and infuses work with a nobler mission. Unfortunately, as we’ve said, it is also very easy to lose the insurgency and default to an industry’s established rules and “growth drivers.” In this context, it is easy to see why Google’s Larry Page continues his focus on revolutionizing the tech industry. His fear is that the cement will harden around Google, defining it simply as a “search company” and thereby sapping the essential energy of its people.
- Fall back in love with the product and “direct connect” to the people who deliver it. Leaders of these “tiger by the tail” companies are in love with their products. It matters that Vikram Oberoi of India’s Oberoi hotels receives and answers customer feedback personally. It matters that John Vincent, a cofounder of Leon Restaurants, reaches out every morning to the managers of his stores when they get good customer feedback the day before. It matters that the leader of one of India’s fastest-growing construction firms spends 90% of his time in the field working with his site managers. Loving the product guides where you spend your time, and leaders need to be in the field, focused on the customer, focused on the people who work most with the customer. We talk about this as “direct connect.”
- Articulate your strategy and capability-building agenda so everyone in the company can describe it simply. For insurgents, the strategy must be simple, so that everyone can implement it. It is designed for the front line, not the boardroom. A simple tool we use to test the degree of simplicity is called the “strategy on a hand,” where the thumb represents a succinct statement of the insurgent mission and the four fingers are the few critical capabilities required to fulfill it. Clarity around strategy can then help set the capability-building agenda—e., the way we deliver our strategy is to be world class at X, Y and Z. In our workshops, we have learned two things: First, most founding teams pass the hand test easily. That’s the good news. The bad news is that many have stopped communicating it to their people. They somehow think it is getting done, but in fact, many of these leaders have abdicated one of the most important leadership roles: to communicate, communicate and overcommunicate the strategy, simply, “on a hand.”
- Identify the “kings” accountable for delivering the insurgency. It is not enough to simply define the strategy so the entire organization can understand it. The key people involved in delivering the strategy also need to be identified and empowered. In this context, we’ve found it very helpful to identify the “kings” within the organization. The kings are the people or team most accountable for delivering the product and services that define the insurgent mission. They often occupy the front line as you currently understand it, but not always. In most retail businesses, for instance, the king is the store manager. In service businesses such as fast food or rental cars, it is the branch manager. In construction, it is the manager working on-site with the client. But for a mobile phone manufacturer, the kings may be the product manager or product team—the ones responsible for developing the phone that is either bought or passed over by the end user. Unfortunately, they are often hidden deep within the organization with little day-to-day customer contact or access to direct feedback.The key is that the kings are not always frontline leaders in the traditional sense. But they are the people or team accountable for delivering what you sell. Part of the Journey North requires you to define them, elevate them, empower them and bring them together to talk about strategy.
- Co-create “nonnegotiables” with the kings that define frontline activities and behaviors. Once you’ve identified the kings and shared the strategy with them, you need to work in concert with them to restate strategy in their own words. Specifically, they should help define the nonnegotiables (or the must-dos) that will determine their essential behaviors and activities. What’s an example of a nonnegotiable? Let’s assume part of the strategy demands that the company is the industry leader in customer care. What does that actually mean? Well, a non-negotiable might be: “We will solve any customer complaint within 24 hours or, if resolution must take longer, we will create a plan within 24 hours to solve it.” This is an example of the kings of the business deciding what first-class customer care means to them. They set their own standards. They are not sitting passively waiting for you to allocate part of the strategy to them. You’ve invited them to be active participants in the process.
- Use the nonnegotiables to set the coaching agenda for your leadership team. The goal, as we’ve said, is to lock in the insurgency as you travel north and begin to scale. We’ve talked about defining it, staying connected to the leaders that must deliver it—the kings—and asking them to help set out the nonnegotiables that will govern their activities and behaviors in achieving the strategy. Finally, this list of nonnegotiables, what some have called a “compass,” should then serve as the basis for your coaching agenda when you are in the field.That agenda should focus on three questions: First, you should ask the kings how they are doing on implementing the nonnegotiables. This is not about an output metric—it is about an input metric. In our example above, the specific question would be: “How are you doing in your quest to respond to customers within 24 hours?” Then, the second question should be: “How can I personally help you to respond faster?” This is not someone from the center asking about how the front line is doing against goals that the center itself defined. This is the leader of the business asking how he or she can personally help the kings achieve the goals they have set for themselves. The third and final question should be: “What issues should I be taking back to the leadership team so we can solve them to make your job easier or more effective?” This makes it clear that the center’s agenda is defined by what the kings need, not what the center wants from the kings.
The Journey North is about capturing scale benefits while retaining speed. That starts with locking in the insurgency—defining it for everyone and using it to set the capability agenda and help the kings define their actions and behaviors. It is ensuring from the outset that the voice of the front line and the customer will help guide the company’s direction. As we know, there are thousands of others shouting, so it is best to hear the kings and customers first.
The three elements of the Founder's Mentality help companies sustain performance while avoiding the inevitable crises of growth.