Book Summary 9 — Founder’s Mentality
Key Insights
Growth creates complexity, and complexity is the silent killer of growth.
Insurgent Mission
stay true to your mission
Frontline obsession
- frontline employees
- customers
- every detail
Owner’s mindset
- strong cost focus
- bias to action
- the aversion of bureaucracy
The Paradox of Growth
Growth creates complexity, and complexity is the silent killer of growth.
1) Overload- too fast scaling
2) Stall-out — complexity and dilution of focus and energy
3) Free fall — can’t identify root cause
Abhor complexity and bureaucracy — clear obstructions in the way of clear execution.
- obsessed with detail
- celebrate people at frontline
“People think focus means saying yes and focusing on it. It actually means saying No to the hundreds of other good ideas.”
1) Key to achieve sustainable growth
Passion for success
We do not have much money, we do not have many stores, but at least I can be enthusiastic.
1) insurgent mission
- bold mission
- spikiness
- limitless horizon
2) frontline obsession
- relentless experimentation
- frontline empowerment
- customer advocacy
3) owner’s mindset
- strong cash focus
- bias for action
- aversion to bureaucracy
Insurgent Mission
stay true to your mission
Frontline obsession
- frontline employees
- customers
- every detail
Owner’s mindset
- strong cost focus
- bias to action
- the aversion of bureaucracy
2) Crisis of Growth
if properly addressed can be huge opportunity
Overload
- systems and processes need to scale
- different skillset and talent required
Stall-out
- complexity
- bureaucracy
- it’s common
- it happens fast
- it’s an internal problem caused by growth
Free Fall
- not viable business anymore (competitor or market)
- didn’t adapt fast enough
- too many distractions
Causes
- unscalable founder — out of his depth
- lost voice from frontline
- erosion of accountability — dysfunctional and unaccountable decision making
- revenue grows faster than talent — wrong people
- bureaucracy — drowning in process, complicated, meetings
- too many distractions — products, acquisitions
- hierarchy — keep it flat
- politics — the complexity of matrix org
- Energy vampires — delay decision, more analytics, more meetings
- Customer experience fragmentation — everybody refers customers problem to another department
- lose the noble mission
“People think focus means saying yes and focusing on it. It actually means saying No to the hundreds of other good ideas.”
- Steve Jobs
3) Combating overload
- open communication lines
- celebrate and reward frontline heroes
- make constant improvement a focus (forums, recognise great ideas)
- Codify best practices
- keep the focus on core principles
- introduce stakeholder happiness surveys
- celebrate people reinforcing values
- open office
- open office floor
- embrace conflict (let managers put on different hats)
- consistent lower end metrics which require instant action
- call top performer meetings (recognition, risk management, cut through bureaucracy)
- dream big
- promote fast
- fast feedback
- invest in training
- promote from within
- empower leaders
- zero based budget — re-asses redeploy
4) Reverse stall-out
Reempower and reinvest in people
- spend more time on customer
- bonus pool
- rehire veterans
- honor badges for exceptional customer service
Lower cost & complexity
- simplify portfolio
- free up resources
- reduce operating costs
- develop simpler strategy
- reduce complexity in design, supply chain, product and process
- collect ideas from everyone how to improve
- empower people who don’t have vested interest in past decisions
Entrepreneurs
- from outside — acquire companies
- partner with outside entrepreneurs
- change ownership (go private)
5) Stop Free Fall
- sell underperforming business units
- re-empower frontline execs in senior meetings
- Simplify/take out complexity
- use customer support staff to support customers, invest into it don’t reduce to squeeze margins, NPS
1) Build a refounding team
- change senior leadership team
- needs new energy (not depressed and tired)
- rebuild future not defend the past
- may need new skills and capability
- hard for people to recognise failure easier new people with open minds
- this needs to be very fast
- time is lost
- don’t let the newcomers absorb the old ways
Move Quickly
2) Focus on core of core
- noncore assets, departments, functions, processes — eliminate
3) Redefine insurgency
- establish vision / purpose
- align everyone on it
4) Rebuild front line
- new language (as a village, CEO being mayor) increases accountability
- good customer service awards
- customer feedback on walls
5) Invest massively in new capability
- embrace the future and think about what you need
6) Wild card: consider privatisation
- buys time
- potentially attracts talent
- reduces external distractions
- allows focusing on internal
6) Action plan for leaders
Self-awareness
- real root cause metrics
- listen to the right people in the company
- how you spend your time has symbolic value
Common ambition
- clear actionable mission
- reach out directly to the frontline, understand problems and customers
Create a compass
- create non-negotiable guidelines for the company
- get input from employees
- turn it into action plan
Decision skills
- often orgs are overmanaged and underled
- Managers do things right, leaders to the right things
- the efficiency of manager vs effectiveness of the leader
Janusian Thinking
- consider opposites simultaneously
Say No to Say Yes
- find the right good idea
Use power of 10x
- don’t invest into everything achieving consistent mediocracy
- willingness to invest 10x the normal resources to great ideas
“Hidden” root cause
- pull out the real problem
- ask the 5 Why’s
- be an active listener
Invest massively in Next Generation leaders
- never found anyone who said we overinvested massively in talent
Invest preemptively in building capability
- training is a big deal
Focus on long term goals and horizons
- invest in it
Guardians of speed and agility
- simplify
- kill energy vampires
- decide on who has the “D” (power to decide)
- reduce org layers
- reduce ambiguity around the mission
- realign resources (zero basing)
- customer experience owner
- monday meetings to resolve roadblocks
- find repeatability
- reduce constant new analysis from leaders
Share burden of leadership across organisation
- you and everyone else owns the problem (not pushing it around)
- ban talk about “we’ve done this” “we do things this way”
- ask for forgiveness, not permission to experiment
- one team!
- pair veterans with newbies (experience and energy)
