The Great Refounding
Why rebuilding your post-COVID culture with a founder’s mindset will lead your organization to recovery, reactivated growth, and a new future
The Great Reset series focuses on how to process and lead in the COVID era, and what that means for the future of our businesses — both professionally and personally. In this installment, we explore what leaders must do to transform their business for their customers’ new needs.
Today we find ourselves at a moment without precedent. The world economy is shut down, employees work from home while trying to homeschool children, people cannot gather for fear of spreading the virus, and 30 million Americans find themselves newly unemployed. As we shared in The Great Reset, this amounts to a period of radical change in acute problems and needs that spans all markets and all nations. This Great Reset represents both an existential crisis, as well as an opportunity. It is a challenge that requires incredible leadership, ambidexterity, and flexibility. To succeed at this challenge, entire organizations need to do more than address changes in supply or demand, or rebalance their operations. To succeed, leaders need to “re-found” their business from the bottom, up. They need to become refounders. Those who succeed at refounding their organization will go on to serve the world, delivering the new products and services people need. Those who neglect to do so will become increasingly irrelevant with amazing speed in the new, emerging world.
Refounder is a term we use commonly at Bionic. As we wrote in 2017 in Harvard Business Review, refounders “are leaders who, despite not having started the company, think with the mindset of a founder. They do not focus their energies on incremental growth through endless optimization, but instead look to leverage their company’s assets to build new offerings, move into new markets, and create next-generation solutions.”
A refounder uses the mindsets and lenses of a new company leader fighting for survival to evaluate how she should move through the landscape, take advantage of the biggest new opportunities, and avoid the pitfalls of big enterprise stagnation. A refounder pays close attention to the right growth metrics, embraces productive failure as a learning tool, and maintains a healthy portfolio of bets on what the future will turn out to look like, so that when the future arrives, whatever it looks like, she is prepared for it.
Thinking like a refounder is always important for a leader trying to grow their organization. Now, in the Great Reset, it becomes critical for success.
As my friend and Harvard Kennedy School Researcher Gautam Mukunda explains:
Most organizations exist in a stable equilibrium. That’s why they’re hard to change — because anytime you try, restoring forces push it back to where it started. Think of a marble resting in a bowl. Trying to change the organization is like flicking the marble. It will move around the bowl for a while, but most of the time it will just settle back down to the bottom, right where it started. In a crisis your organization is much easier to change, though. Why? Because a crisis shatters the bowl. Your company can’t stay in its old stable equilibrium — if it could, it wouldn’t be in a crisis! Before the crisis, your job was to tweak the bowl — patch the cracks, maybe even change its shape slowly over time so that the marble eventually gets where you want it to be. But now, in a crisis, you have to build a new bowl. You have to take all the old pieces and remake them into a new shape — now it can be a much better one, because you’re not constrained by the shape of the old bowl.
We find ourselves in a moment when we all have to ‘recreate the bowl,’ deciding which pieces to carry forward with us and which ones to discard. Making this decision involves getting very clear on what the biggest needs are that your business serves, and what your organization’s proprietary gifts are for serving those needs. Those determine the pieces you carry forward to make the new bowl. Everything else gets left behind.
How does a refounder remake the bowl while the world economy is at a standstill and the road forward looks nothing like the road behind us? In three simple steps:
1) Revalidate the customer need you are solving
Your business has existed for years, perhaps decades or centuries, to solve a particular customer problem. In the Great Reset, that problem, as with everything else, has likely undergone sudden and significant change. New forces acting on individuals and communities, new behaviors and social norms emerging, new technologies thrust to the forefront — all of these have scrambled the map of individuals’ and organizations’ needs. As a refounder, you must look at these customer needs anew as if it was Day One of your business. You need to understand exactly how they have changed, and how your organization can best serve them going forward. This involves taking an outside-in approach of your business and having an absolute commitment to commercial truth.
2) Rediscover your proprietary gift for solving that need
With a thorough understanding of your customer’s new needs, as a refounder you must then reassess your organization’s proprietary gifts in meeting those needs. What was the original magic that allowed your business to serve your customers better than anyone else? In what ways does that still serve you, and in what ways does it need to be updated and extended to serve customers in the new market landscape? To rediscover your organization’s proprietary gifts and dive into your internal strengths, start by holding stakeholder interviews, talking to SMEs, and conducting secondary research. When brought to the world, a true proprietary gift creates an impossible-to-replicate, unfair advantage, that both your competitors, and most importantly, your customers recognize and reward.
3) Focus on dominating that need with your solution
Finally, with a renewed understanding of both your customer’s need and your proprietary gifts, as a refounder you must focus on solving that new need in the most compounding way possible. Every permission and all options need to be on the table. This means letting go of past success, models and marketing entitlements. This means running a material volume of experiments with speed, with the goal to invalidate (kill) or pivot legacy offerings, while launching new solutions and models with extreme focus on solving the new customer problem. Optionality is the enemy right now, do not preserve past solutions to disrupted and expired needs. Focus on your biggest opportunities and go after those with unrelenting force and energy — and win.
This is the process of refounding.
While it’s critical that you as a leader embark on this journey, it cannot be only the leaders who do so — to succeed, you need your whole organization to engage and come along with you. The solutions that solve the growth crisis will come from the edge, deep in the changing customer needs, not the top of the organization. In order to do that, you as a leader must do two things:
- Tell the truth
- Ask for help
In times of crisis, leaders instinctively want to say “I have the answer, everything is going to be fine.” As a leader, you have been conditioned to believe that is your job. And in normal times, it may be. When you are refounding, building the “new bowl,” this does not work. You are in an existential crisis, and your team needs to hear that you understand that and are honest about it. You can’t sugarcoat things, you can’t put an optimistic spin on things. I’ve learned hard lessons in this style of leadership. If you want your company to rally around you and join you in refounding the business, you’ve got to lead with absolute truth: here’s where we are today, and this business could die. Then, you need to explicitly ask their help in saving the business, in refounding it. The ownership of this transformation cannot solely come from the top, it has to come from everywhere in the organization. That can only happen if leadership is open, honest, and inviting to the rest of the organization, with a deep sense of contribution and ownership, and most importantly, the recognition that you cannot do it without every member of the team.
One of the storied examples of a whole organization embracing the refounder mindset is Intel’s transition from memory to microprocessors in the 1980s. It’s worth retelling. By 1985 DRAM, the company’s main offering since its inception, had become a commodity and Intel was losing market share and seeing margins decimated by competitors. Faced with this existential threat, Andy Grove engaged in a thought exercise with CEO/co-founder Gordan Moore one day: “If we got kicked out and the board brought in a new CEO, what do you think he would do?” The answer was instantly clear: the new CEO would get Intel out of memory. This set off a transition that one manager likened to “Ford leaving the car business,” as the whole company worked to find a new offering to sell to customers, validate that, and quickly bring it to scale. Intel, which had always sold memory directly to manufacturers, became a brand-name microprocessor vendor that consumers demanded in their computers. Twelve months after starting their pivot, they ran an ad during the Superbowl for Intel Inside. The idea that saved Intel came from the deep middle and edge of the company. Intel successfully pivoted, and grew for decades.
Like Intel in the 1980s, in the wake of the Great Reset many, if not most organizations need to transform now. They don’t have the luxury of doing it over a decade — the new world is emerging all around us as you read this. When leadership, management, and the entire organization adapt a refounder mindset, embrace their core values, make decisions quickly as a team, they can face this emerging world, find their place in it, and grow.
David Kidder is the co-founder and CEO of Bionic, who’s purpose since its founding in 2013 is “To Ignite Growth Revolutions” in large enterprises. He can be reached at email@example.com
For more information, visit us at: https://onbionic.com/the-great-reset