Founder's Mentality Blog
Growth creates complexity, but complexity kills growth. This paradox causes great firms to rise and fall. It should terrify the founders of young insurgent companies. Their hypergrowth, which is the envy of slower, older competitors, is creating hypercomplexity. It should also worry the CEOs of great incumbents, who stand proudly as industry leaders. Their size has created mountains of complexity, making them vulnerable to all those pesky insurgent companies nipping at their toes. It isn’t that these larger, seasoned companies don’t have ideas—they just find it so difficult to get new innovations into the market quickly and at scale.
The growth paradox has been at the heart of our work, going back to our book The Founder’s Mentality, which was published in 2016. Since then, we’ve worked with hundreds of companies on how to fight the crises of growth. We’ve found that organizations can achieve sustainable, profitable growth by rediscovering those motivating attitudes and behaviors that can usually be traced back to a bold, ambitious founder. With a Founder’s Mentality®, insurgents and incumbents alike can avoid inevitable sluggishness, instead transforming into powerful “scale insurgents”—those rare companies that win with their speed and their size. Based on our experiences, we’ve codified a 10-step journey to help companies get started on the path to scale insurgency.
The stages of the journey
We’re guessing that your leadership team meetings are dominated by endless PowerPoint updates that boast how busy everyone is with functional excellence programs. You no longer know which of these updates link to your company mission. It’s been a while since your agenda was dominated by customers and the frontline heroes that serve them. The goal of this journey is to shift the corporate agenda and transform your behaviors.
In order to restore a Founder’s Mentality and become a scale insurgent, companies can fight “micro-battles.” These small, cross-functional initiatives create microcosms of the organization you want to become. They help your people relearn the art of business building, the key skill of all great scale insurgents. We’ve worked with dozens of companies on more than 500 micro-battles globally. In doing so, we guide the journey through four key stages (see Figure 1).
Micro-battles provide the framework for a 10-step journey to scale insurgency
Stage 1: Create the ambition. The leadership team understands the necessity and benefits of competing on the basis of scale and speed (for more on scale insurgency, see our book The Founder’s Mentality). They acknowledge the need to master the art of business building. They agree to start the journey via micro-battles. Micro-battles require organizations to hone the necessary skills of business building: leading, learning and scaling (for more on business building, see our blog post “Micro-battles and Building New Businesses”). They are supported by the core repeatable model of your business.
Stage 2: Master business building. The leadership team launches the first set of micro-battles and learns the critical skills of business building. Micro-battles require small teams to continuously generate prototypes, with the ultimate goal of creating a repeatable model that serves the entire company. We call this process the “Win-Scale” cycle (for more on Win-Scale, see our guide, “The Bain Micro-battles System”). The executive leadership team, also known as the Amplify team, transforms its skills and behaviors by supporting and accelerating wins from micro-battles. In doing so, they support and accelerate business building.
Stage 3: Scaling your scaling capability. As micro-battle teams achieve success and the number of initiatives grows, it’s important to address the challenges of scaling innovations into new businesses. The leadership team identifies people who excel at scaling prototypes into Repeatable Models®, assigns them to each micro-battle team and helps them build a community to share best practices (for more on scalers, see our blog posts “How to Identify Great Scalers” and “The Best Practices of Great Scalers”). To scale the micro-battles program itself and ensure a broader impact, the executive team also starts to cascade initiatives throughout the organization with a new group of Amplify teams.
Stage 4: Refining your core repeatable model and operating model. Except for some early actions to enable business building, the organization’s work in micro-battles is largely “vertical”—serving customers, mobilizing the front line and battling competitors. At this point, the leadership team realizes it must address specific “horizontal” initiatives—the strategy and organizational changes needed to support scale insurgency. The team thinks about its core repeatable model, talent strategy and the new operating model. Companies around the world are just starting to define how businesses emerge from micro-battles, but we’ll share our lessons to date.
Creating the ambition
With a clear sense of the issues that are impeding growth, leaders create a sense of urgency within the executive team: We must become a scale insurgent. They get started by launching micro-battles.
Create excitement around the goal of scale insurgency. A few discussions on the insurgent mission and business building can help leadership teams commit to becoming a scale insurgent. We recommend starting with the following actions:
- Use the Founder’s Mentality diagnostic to address the unvarnished truth about your starting point. Leaders ask, “Are we still an insurgent, or are we drifting toward bureaucracy? What forces threaten to blow us off course and how can we best address them?”
- Acknowledge that we’re entering a new era of business. The strategies, corporate forms and styles of management that have ruled the last century are shifting in favor of the scale insurgent—just look at Amazon, Google and Tencent. We’re entering what we call the “era of scale insurgency.” It’s time to abandon the professional management system that has steered large companies toward becoming low-cost and size-driven for the past 100 years. It’s time to embrace scale and speed.
- Commit to maintaining or rediscovering the Founder’s Mentality. Leadership teams can start by clarifying the insurgent mission and those “spiky” capabilities that support it. They debate which capabilities contribute to their existing repeatable model and which contribute to the new propositions that they’ll introduce to meet customers’ needs. Next, the organization thinks about the talent in mission-critical roles who deliver the insurgent promise to customers, especially the team that brings the benefits of scale and intimacy. Resolve to do more to empower those frontline heroes. Finally, the senior team should adopt an owner’s mindset and a bias for action. They focus the organization on “deep work,” or those activities that allow individuals to employ their unique talents and increase the value of the enterprise. They celebrate execution and speed.
- Focus on business building. It’s already in your DNA—or you never would have become a large successful company that created or disrupted markets, and met your customers’ unmet needs. Ultimately, this is your shared deep work.
Agree on the basic shape of the transformation. Our most important lesson on the journey to scale insurgency is simple: Get started now. As vertical initiatives, micro-battles work best when the organization jumps in and learns by doing. Your customers and your people are demanding immediate change that starts with them. Firms can become paralyzed by too many horizontal initiatives—all those internal programs keep your eye off the market. But, of course, commitment to a big journey requires balance. Therefore, in tandem with micro-battles, the leadership team can launch one or two horizontal initiatives to help accelerate business building. Four critical enablers can help shape the transformation:
- Repeatable Models. In 2012, our book Repeatability introduced the idea of the repeatable model: a set of spiky capabilities that enable companies to create new and long-lasting differentiation. Sustained value creators would grow by replicating these spiky capabilities in new contexts—take global agribusiness Olam’s beginnings as a cashew trader. It purchased nuts directly from farmers in Nigeria and sold them to a dozen customers in Europe. To do this well, Olam had to learn to work closely with small farmers and develop a risk management system to minimize crop problems, price and currency volatility, and supply disruption. These capabilities translated into other contexts. Olam’s knowledge of small farmers in Nigeria could be applied to small farmers in, say, Burkina Faso. Its risk management skills could be applied to peanuts or coffee beans. Soon enough, the company was sourcing more than 20 agricultural products from farmers in more than 60 countries and delivering them to customers around the world. Today, scale insurgents are taking Repeatable Models to the next level by focusing on three things. First, they build new products and services with modularity and a common architecture. To illustrate, scale insurgent Amazon has utilized a core architecture of features such as data management, recommendation algorithms and dynamic pricing to provide new services, from Prime Video to Kindle. Second, they dramatically scale the value of the core repeatable model through networks (the company uses partnerships to deliver proprietary products) and platforms (the company matches buyers and sellers—think Airbnb). Finally, scale insurgents force all functions to ask revenue and cost questions, including, “Is this function good enough to be turned into a revenue source? Can it be outsourced?” While companies consider the definition of their core repeatable model several times in the journey, we recommend launching the discussion in Stage 1. The leadership team should determine which spiky capabilities serve as their primary repeatable model. They should understand if micro-battles can leverage the repeatable model, or if they will challenge it by requiring new capabilities. For example, as more companies compete with digital capabilities, IT architecture will be a critical aspiration for every repeatable model (for more on building up IT capabilities, see the Bain Brief “Rebooting IT: What Separates Digital Leaders from the Rest”).
- Cost reduction. Many companies need to free up funds to support micro-battles, especially as they scale.
- Operating model. On occasion, adjustments to governance, organization structure or reward systems can help micro-battles move faster. If these changes are quick wins, go for it. But beware of compiling a long list of idealistic actions—each can take time and energy away from launching micro-battles.
- Engine 2. We call your core business your “Engine 1,” and your new businesses for future growth your “Engine 2.” There are several good reasons to base the micro-battles program in Engine 2. Building Engine 2 might be an urgent priority. Engine 1 could be too broken to support micro-battles. Or perhaps the Engine 1 agenda is full and the team aspires to experiment beyond your core. But the firm should challenge itself as well—too often, CEOs default to Engine 2 because they know Engine 1 is a tough nut to crack. Our advice? Crack the nut.
Master business building
After setting the ambition, the leadership team’s top priority on Monday morning is launching the first “wave,” a set of three to five micro-battles. This takes the micro-battle teams “back to class” on the skills, capabilities and behaviors of serial business builders. The organization is focusing on the “scale” behaviors of a scale insurgent.
Launch the first wave (three to five micro-battles). In his book, Atomic Habits, author James Clear discusses how to create good habits by starting with identity rather than outcomes. Take smokers who are trying to quit. They often start by declaring that they want to stop smoking. Instead, Clear argues that they should start by identifying themselves as nonsmokers. This is how companies should select their first wave of micro-battles. They want the business-building habits of a scale insurgent. Rather than declare that they want to become a scale insurgent, each individual on the micro-battle team should identify as a scale insurgent and act like one. As we discuss in other blogs, this means that the criteria for choosing a first wave of micro-battles should be simple and a bit cynical. Micro-battles should:
- Link to the insurgent mission. Companies should prioritize initiatives that directly support their mission.
- Focus on strategic priorities and raw customer need. Scale insurgents focus on strategic priorities with the biggest potential for value today, and focus on changing the raw customer need as they plan for the future. It’s OK not to have it all figured out yet—you will launch more waves of micro-battles as you develop your strategy.
- Engage and reward the right champions. Down the road, the leadership team will need top talent to champion micro-battles and gain support from the rest of the organization, so pick influencers who will spread the word. There will be a lot of pushback. Undoubtedly, these people are overextended, and micro-battles will require 100% of their time and energy. To attract 6 to 10 full-time heroes, leaders will need to lay out clear and bespoke rewards. Eventually, as micro-battles scale, they’ll need to figure out the full implications on talent and compensation. But for now, the organization is acting like an insurgent, so fix the problem at hand with speed and purpose.
- Adopt Agile ways of working. Agile principles help micro-battle teams pursue fast prototyping and testing with customers.
- Focus on early wins. Don’t make things too difficult. Pick some winnable battles to help teams learn and gain momentum. You can’t gain much momentum with failure, so be pragmatic.
Master scaling. The most challenging part of micro-battles is scaling. Micro-battles require teams to produce small and specific prototypes that can be tested with customers every four weeks. The goal is to create a repeatable model that fits into routines and can be deployed across the company. There’s a key tension: Ideas create walls of Post-It notes; scaling creates markets. The idea of resolving this tension sounds intimidating, but if you look at the history of any large company, the firm was at its greatest when innovating and scaling were the main priorities of the leadership team. To become great scalers again, organizations needs to focus on four concepts:
- The “failure point.” Incumbents make problems bigger, which makes it more difficult to take action. Insurgents make problems smaller, so that they can act immediately and move to the next issue. Micro-battle teams learn to take complex strategic initiatives and figure out the failure point, or the biggest problem that could derail the micro-battle. As the team moves from prototyping to business building, they change the failure point by asking, “What do we need to test to move closer to a scalable, repeatable model that can be deployed across the organization?” The teams are learning to solve for the most critical scaling issues in order to move forward.
- The Win-Scale pivot. Many corporate innovation teams declare victory on a pilot and hand it off to another team to deploy. These pilots appear successful enough. They are designed to meet specific market needs. They have been tested on customers and adapted according to feedback. Yet too often, these pilots fail. They don’t pass three key tests. For a prototype to succeed as a repeatable model, the team must test for transferability, meaning it needs to work in the next city or with the next product. They must also test for repeatability, meaning it needs to work at normal resource levels under normal business conditions. Finally, they need to test for materiality, meaning that the idea is big enough to emerge as a firm priority. Micro-battle teams don’t declare victory until they understand how their innovations can be deployed across the business.
- The three communities. To build a business, leaders must manage three conflicts. There’s the conflict between using intimacy to cater to the needs of individuals and using scale to generate the benefits of leadership economics for customers. There’s the conflict between disrupting the market and delivering flawlessly executed routine. There’s the conflict between developing new businesses and delivering the current business. Micro-battle teams require members that represent both sides of the conflicts. They need innovative disrupters (we call them the “disruption community”) and routine-enforcing executors (we call them the “execution community”). Micro-battles get these communities working side-by-side to solve issues rapidly, without needing to escalate the decision making to executives. But there’s a necessary third party here—the teams also need individuals who can act as a bridge between disrupters and executors. We call these individuals scalers. To accelerate decision making and scale new businesses, organizations should become very familiar with the three communities.
- The core repeatable model. As micro-battle teams come to the Amplify team for support, executive leaders ask, “Are our spiky capabilities helping you win this micro-battle, or are they irrelevant to it?” We typically assume that micro-battle teams are leveraging the firm’s core capabilities. Yet, in some cases, the capabilities aren’t helping them, or the firm entirely lacks what they need. The leadership team must make a critical decision. Do they stop the micro-battle and ask the team to refocus on spiky capabilities? Do they ask the team to continue, in order to help the organization decide if these capabilities need to be changed later? Do they allow the micro-battle to fundamentally challenge the repeatable model? The rewards of winning a micro-battle need to be huge if it will redefine spiky capabilities. But leaders need to force these debates—the resulting lessons will be critical in the final stage of the journey.
Transform leaders’ behaviors. Micro-battles aren’t just about the micro-battle teams. Ultimately, they are about the leadership team and their behaviors. A century of the professional management system has not been kind to businesses. They are siloed. Leaders find hundreds of reasons to say no and struggle to say yes. They silence innovation rather than amplifying it. They slow results rather than accelerating them. Let’s be frank. The micro-battle teams don’t report to leaders every four weeks for their own enlightenment. They report their work to help the senior team understand what is required to win in the market and become a scale insurgent. Strategy is culture, and culture is strategy and behavior. Much of the journey is about changing leadership behaviors and transforming the team into accelerators of growth.
Scaling the firm’s scaling capability
Over 12 to 18 months, the organization extends the micro-battles program beyond the first wave to a portfolio of 20 to 25 micro-battles. The micro-battles directly engage 200 of the most important leaders and indirectly touch hundreds more. As the firm masters running micro-battles, they expand the system through a Scaling Community℠ and new Amplify teams.
Build the Scaling Community. In the early waves of micro-battles, a lesson emerges: It’s hard to scale. Micro-battle teams generate great ideas, but they find it challenging to turn them into new businesses. Leaders can take two actions to help teams succeed:
- Identify and coach scalers. Micro-battle teams need scalers to turn disruptive ideas into routines. Working with The Chemistry Group, Bain has researched the defining qualities of great scalers. We evaluated the group on a 5-level scale against the 11 key behaviors of high-performing leaders, and found that scalers scored highly and consistently across every behavior. Roger Philby, the founder and CEO of Chemistry, notes, “Finding a 5 is like finding a unicorn. The scaler group has the highest number of 5s I have ever seen.” To most people, a score of 5 sounds the best. But for Chemistry, a 4 is best. It represents that an individual has mastered a given behavior. They are a role model. A 5 is different. It represents an individual that goes beyond personal mastery of the given behavior and creates an institutional capability. In an exceedingly rare event in personal development, scalers seek to make themselves dispensable. However, scalers are made, not born. As leaders identify potential scalers, they can train them to become a 4 in a specific scaling behavior. Once the person is an expert, leaders help them do the rare thing—work to institutionalize their skills so the company can effectively scale its scaling capability.
- Focus on digital capabilities. Many scaling issues can be linked to capability bottlenecks, especially when it comes to digital solutions. There are six common capabilities needed for digital micro-battles: a customer experience focus, Agile ways of working, human-centered design, data analytics, flexible technology and strategic partnerships. Most companies have these capabilities somewhere, but they aren’t able to mobilize quickly enough to build new businesses. Throughout the journey, firms should look for ways to build strength in these areas.
Build a portfolio of micro-battles. As companies build out the portfolio of micro-battles, they need to consider how to support the program with more resources. At this stage, they should also decide how to cascade the micro-battles approach throughout the organization for a broader cultural impact.
- Free up funds and resources. Growth initiatives like micro-battles often require sources of cash—typically cost and complexity reduction. Many cost programs can be run with a micro-battle approach. As you extend the micro-battles program, it’s important to celebrate those who free up funds in the same way that you celebrate those who run growth initiatives. This celebration is a key part of adopting an owner’s mindset, a critical component of Founder’s Mentality. Without this celebration, the organization could develop a perilous perception that the “losers,” or those focused on cost, are funding projects for the “winners,” or those focused on growth. Both sides are critical to the firm’s future.
- Cascade micro-battles throughout the organization. Initially, we strongly recommend that firms fiercely protect the micro-battle “brand.” Micro-battles should only be used to describe a sole group of senior leaders, the Amplify team, running a portfolio of 20 to 25 micro-battles. But over time, companies will be ready to expand the impact of micro-battles more broadly in the organization. To do this, leaders need to build new Amplify teams. Expansion depends on how P&L responsibility works in the organization. Many companies expand by business unit or geography. If a company started micro-battles at headquarters and has strong business units, they might create Amplify teams at the business unit level with business unit leaders. From there, the company can cascade further into key geographies. Companies that only have a single core business can cascade directly into geographies. Regardless of approach, scaling remains the critical capability—you can only cascade at the pace that you build out your Scaling Community.
Refining the core repeatable model and operating model
In the final stage of the journey, senior leaders face three big issues that they avoided from the outset. They should ask themselves, “Which horizontal initiatives will help guide the transformation? What do we do with the rest of the organization not running micro-battles? Finally, how can we move from bespoke talent solutions to a new rewards system?”
Design the ongoing choreography of the transformation. It’s time for senior leaders to return to several issues raised by the Founder’s Mentality diagnostic. Companies can take two actions to propel the transformation:
- Launch horizontal initiatives. The journey began with a refocus on vertical initiatives. But at this stage, the organization is mastering business building. Leaders can anticipate the changes to the strategy, the core repeatable model and the operating model that supports it. This calls for horizontal initiatives. But where should they start? Many companies ask, “What are we learning about micro-battles that helps us understand the requirements for our repeatable model?” They should avoid seeking “final solutions,” which signal to the organization that the transformation is complete. Determining an “end state” is the behavior of an incumbent. Instead, horizontal initiatives should signal to the organization that scale insurgents endlessly adapt as the market moves.
- Sustain momentum. Constant change requires constant momentum. The professional management system requires certainty and stability. For businesses built in that era, it’s difficult to excite people about constant change. To them, change is painful and something to be endured. Scale insurgents have the opposite mindset. To them, stasis is the enemy. In his shareholder letters, Jeff Bezos states that Amazon is always in Day 1 because Day 2 is “stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death.” The end of change is the end of business building. It’s a retreat behind Warren Buffett’s metaphoric “moat” of competitive advantage. For scale insurgents, it’s the CEO’s job to embrace change and encourage others to love it. The best CEOs celebrate heroes that respond to customers’ ever-evolving needs, that beat an emerging insurgent’s new strategy, or that recruit the new talent needed to win.
Radically simplify the rest of the corporate agenda. The goal of micro-battles is to overwhelm the corporate agenda with vertical initiatives, robbing oxygen from functional excellence programs. But at this stage, 25 micro-battle teams have reported what they need from functions to scale their solutions. The company has launched revenue and cost micro-battles, and developed a more balanced view of functional priorities. With new insight, it’s time to return to the old agenda and decide what can be stopped or simplified. Through this process, we find that the functional heads become huge fans of micro-battles. They can reorient their agenda and their people to the insurgent mission and the customer. Nobody wants to be seen as running non-value added processes. Micro-battles help them follow the customer and follow the money.
Create a new deal for talent. As difficult as it is, leaders need to focus on rewards in this final stage of the journey. Once again, incumbent companies will need to unlearn the professional management system, which prioritizes spans and layers in its rewards. You know the drill. People are gifted spans: “You’re so good at your job, we’ll give you more resources to control.” People are gifted layers: “You’re awesome with customers. So we’re going to make you a manager of those that work with customers. The better you get, the closer you’ll move to the CEO and the further you’ll be from customers.” Micro-battles necessitate a new deal for talent. While every organization requires a tailored solution, there are a few goals to keep on the horizon:
- A celebration of apprenticeship and mastery. Without rewarding spans and layers, it’s imperative to refocus people on the mastery of their craft. An employee’s job is not to get promoted away from this activity or manage others, but to master it and gather apprentices to teach. Many leaders are embracing the idea that the decades-long mastery of a craft is its own reward. With this management trend growing in popularity, we’ve seen a return to the language of business’ apprenticeship era.
- Guilds of expertise. To celebrate masters, leaders can form guilds for these expert craftsmen to share best practices and help define their own development and rewards agenda.
- Teams. Don’t confuse mastery with an image of an isolated craftsman trying to make a pewter cup. The new deal for talent is about teams. Employees’ careers will be defined by the great teams they joined and the achievements that they shared. Scale insurgency requires endless teaming, the regular formation and disbanding of teams, and a new review system to go with it. Most professional service firms have run this model for decades. From personal experience, we can say that endless teaming is endlessly rewarding.
- Careers based on journeys, not titles. When you think about the new deal for talent, you should have a single image in your mind: a passport filled with stamps. Employees’ careers will be made by the journeys they’ve been on, not the titles they’ve accumulated. It’s the leadership team’s job to make these journeys exciting. The good news is that there’s no better place to start than micro-battles and business building.
The journey to scale insurgency is akin to an arduous climb up a mountain. You can summit one peak, thinking you’ve reached the top, only to find that yet another peak follows. While we call this list the “10 steps to scale insurgency,” truly, these steps are merely the roadmap to the first peak. The journey is ongoing. To maintain momentum on the trail, it’s imperative to create a culture that embraces change and values speed at scale. Culture change starts with the leaders—they must embrace these 10 steps to get the organization to the top of the first hill. But in the era of scale insurgency, a whole mountain range awaits.
James Allen is a senior partner with Bain and Company’s Global Strategy practice, and is based in London. James coauthored The Founder’s Mentality.
Founder’s Mentality® is a registered trademark of Bain & Company, Inc.
Scaling Community℠ is a service mark of Bain & Company, Inc.
Repeatable Models® is a registered trademark of Bain & Company, Inc.