How can your company retain a founder's mentality as it grows?
Chris Zook and James Allen, two longtime partners in Bain & Company's renowned Global Strategy practice, recently explored this question in their forthcoming book, The Founder's Mentality.
The book is filled with examples of how large companies like Apple, Haier, Google, IKEA, and Nike have managed to stay in touch with their core values, even as they've grown massive. But what if you're lucky enough to be starting a company today? I recently asked Zook how he would go about instilling a founder's mentality into a startup culture, so the edginess and sense of mission would remain as the headcount increased--and as the founder ceased to be someone who was on a first-name, handshake basis with every employee.
Here are two of Zook's suggestions:
1. Codify your values. You can use pencil and paper. The idea is to set down the principles and beliefs that you believe make--or will make--your organization special.
If your company is already a few years old, that's okay. "Nike, when it was a $16 billion company, reverse-engineered its nine principles," Zook says. Unilever also didn't codify its principles until it was an older company. While it's great if you can do it from day one, doing it later is better than not doing it at all.
If you don't know where to start, just think about what differentiates your company from everyone else's. Here's how Olam International, a $13.6-billion agri-business and food processor based in Singapore, answered some basic questions about its values:
What differentiates this company? How we manage supply chains.
How do you do that uniquely? By controlling the supply chain from farm gate to customer.
How do you do that uniquely? By stationing managers in the rural communities and having a proprietary risk-management system that uses local knowledge to track each product from field to factory.
You get the idea. You need to articulate what separates your fundamental capabilities from everyone else's.
2. Perform meaningful symbolic acts. There's a sledgehammer on display in a large showroom at the Qingdao, China, headquarters of Haier, a $30 billion maker of household appliances. Haier's longtime CEO, Zhang Ruimin, used the sledgehammer to make a point during a key moment in the company's history, in 1985.
At the time, the city government had placed Zhang in charge of what was then a dysfunctional, near bankrupt entity. Workers were so undisciplined, Zhang had to stop them from urinating on the factory floor. One day, an upset customer returned a faulty fridge. That prompted Zhang to inspect the entire inventory--only to find out that many of those fridges were broken too. He lined up 76 of the messed-up fridges on the shop floor and gave sledgehammers to the workers. Soon there were fragments of plastic and metal all over the floor. His message? Shatter your old ways, and focus on quality.
So, the question for today's founders is this: What is your sledgehammer? What can you display that will invoke a story, whose moral is the preservation of your essential values?
There are other examples in the annals of business history. Vanguard, the legendary mutual fund company, raises a Swiss flag whenever it is facing a crisis of one sort or another. The idea is that the company needs all hands on deck, and it needs all employees to perform like Swiss army knives, performing whatever service they can to please customers. When Steve Jobs returned to Apple after his famous hiatus, he made sure to put every Apple device in a room next to the place where the top team had its meetings. The idea was to create more attention to detail, and to make sure the company's actual work products were literally never far from management's mind as they discussed finances or other topics. "There are always going to be historic or symbolic elements founders can embed in their culture, to make sure a sense of history remains," says Zook. "Even when that founder is gone."