“Traditionally there has been no consensus among biologists about the source of the aging process. But within the last decade, a new theory has gained gradual acceptance and has unified many strands of research into aging. Basically, aging is the buildup of errors, at the genetic and cellular level. As cells get older, errors begin to build up in their DNA and cellular debris also starts to accumulate, which makes cells sluggish. As cells begin to slowly malfunction, skin begins to sag, bones become frail, hair falls out, and [the] immune system deteriorates. Eventually, we die.”
I quote this not to depress you (although I can personally feel the debris accumulating), but because I think it presents a useful metaphor for the default path developing companies often follow as they grow. As successful companies “age,” they accumulate errors; they collect debris; they become sluggish. Similarly, as leaders expand management and systems to gain the benefits of scale and scope, they unwittingly lose key elements of the Founder’s MentalitySM—a sense of urgency, an owner’s mindset and an obsession with the front line.
I was recently in Shanghai for a local DM100 meeting, and here’s a story told by the founder of an apparel manufacturer and retailer: “We work hard to keep the ‘founder culture’ by investing a huge amount in training and working very hard to make sure our stores all look and feel the same. When we were focused on a few provinces and Tier One cities, this worked well. Our core team could pick and train each store manager and help him or her recruit staff and manage the store for the first couple months. But as we’ve spread further into Tier Three and Four cities, this is getting harder and harder. We are working through others, not directly. We’re not as close to recruitment. We’re not always there to nurse the store through its opening months. It feels like messages get lost in translation, and sometimes it’s like our teams in the frontier cities are copies of copies. They are close to what we want to achieve, but never fully.”
Fighting to keep the Founder’s Mentality alive as you grow is all about striving to stay “young.” Ben Horowitz in The Hard Thing About Hard Things uses a wonderful phrase he borrowed from coaching instructions given to offensive linemen in American football as they work to protect the quarterback: “Give ground gradually.” For growing companies, it translates as, “Push for the benefits of scale, but try to keep the founding culture going as long as possible.”
A key part of our discussion in Shanghai was about how you do this—how you keep alive the culture of a company built by heroes, while putting in the right systems to support the next generation. The meeting’s attendees were clear— success requires doing both. As one founder commented, “China is now moving to the era of systems—the founders have grown their companies rapidly and now need to put in place the necessary systems to go to the next stage. We each have to do this, but we also have to maintain and enhance the original culture that got us here.”
The good news is the team began to develop an action list to achieve this balance. We identified five key themes, which we will explore more fully in other blog posts:
- The role of storytelling to keep the Founder’s Mentality alive—and how the story must include chapters, empowering the new generation to write their own
- The unique role for the founders in recruiting and coaching the lead professional managers and maintaining a constant dialogue as they transfer essential responsibilities (see my blog about the Zhang brothers called “Bringing in the professionals“)
- The need to overinvest in integration and training, given the number of new senior recruits that will be required
- The need for strategy/capability-driven systems development, rather than reliance on “generic systems”
- The need to be very clear about maintaining the balance of “freedom” vs. “framework” in core jobs and the importance of using the Monday meeting to clear up confusion between the two
Each of these concepts can help fight the aging process within your company. No promises what they will do for our own increasingly sluggish cells.