In this blog, we’ve explored specific actions founders and professional managers can take to capture the benefits of scale and scope while retaining the Founder’s Mentality℠. In earlier posts, we laid out the challenge and three important actions for overcoming it: storytelling, setting up the systems and capabilities table and focusing senior executives’ time on integration.
A fourth action―and one that company leaders too often leave to others―is training. As a number of the attendees at our recent DM100 meeting in Shanghai emphasized, founders themselves are in the best position to pass on the Founder’s Mentality to future generations. Founders have a responsibility to ensure that the company is managed according to its principles; training is one of the last things they should let go of as the company scales up.
The noted chemist and lecturer Eugene P. Bertin put it this way: “Teaching is leaving a vestige of oneself in the development of another. And surely the student is a bank where you can deposit your most precious treasures.”
Any discussion of the importance of training in defining a company’s culture must start with Andy Grove, the former CEO of Intel. Founders and entrepreneurs routinely cite him as a source of their inspiration. In his 1995 book, High Output Management, Grove devotes a chapter to his belief that training should be a top priority for all managers. “Most managers seem to feel that training employees is a job that should be left to others, perhaps to training specialists,” Grove writes. “I, on the other hand, strongly believe that the manager should do it himself.”
Here are several of the essential points from the book:
- “[A] manager’s output is the output of his organization—no more, no less.” There are only two ways to boost performance: by motiving or by increasing individual capability. Training, therefore, is “one of the highest-leverage activities a manager can perform,” says Grove.
- For training to be effective it has to be consistent―something employees can count on―and not a “rescue effort” or a one-time “canned course.” It’s essential that training reflects how things are actually done at the company.
- Leaders are the most effective trainers because they are the most suitable, credible role models. Grove believes “the person standing in front of the class should be seen as a believable, practicing authority on the subject taught.”
- There are two types of training: teaching new employees the skills they need to perform their jobs and teaching new ideas, principles or skills to veteran employees.
As Ben Horowitz, the cofounder of the venture capital firm Andreessen Horowitz, notes in this blog post, most founders of growth companies fail to give training priority, despite the long-term benefits of increased productivity, performance management, product quality and employee retention. The CEO of Twitter, Dick Costolo, told Bloomberg that personalized training is the only way to ensure that managers hired from outside the company grasp Twitter’s unique management style. “I started realizing that people were bringing the success biases in from other companies where they had managed,” Costello said. “I realized I’ve got to get people managing the way I want them to manage.”
The ultimate goal of effective training―especially as it applies to preserving and evolving the Founder’s Mentality―is to promote self-sufficiency and the ability to think independently. As Maria Montessori said, “The greatest sign of success for a teacher . . . is to be able to say, ‘The children are now working as if I did not exist.'” (And talk about credibility: According to a Wall Street Journal commentary, a long list of founders and innovators got their start in Montessori schools, including Google’s founders Sergey Brin and Larry Page, Amazon’s Jeff Bezos and video game pioneer Will Wright.)
But an important element of empowering employees to think for themselves is what we call the balance between freedom and framework. While it’s essential to rely on employees, especially frontline employees, to implement the firm’s strategy, it’s equally important that they pursue the company’s agenda. They must understand the strategy, personify its unique set of cultural values and buy into its mission. All three of those things originate with the founder and, to borrow Grove’s phrase, the founder is the practicing authority on the subject. He or she is uniquely positioned to train the organization on how to grow while staying true to the founder’s vision.
The most effective training systems start with the founder and work down through the organization. Implemented correctly, they both promote the Founder’s Mentality―keeping the company from drifting west in our framework―while building the capabilities that allow it to move north, gaining the benefits of scale and scope.
On the one hand, training carries the culture forward: It should incorporate story telling, focus on integration and provide a close link between management systems and the “nonnegotiables” that guide employees’ behavior. On the other, it should be about gathering and imparting the accumulated knowledge of the growing organization. The right training programs are continuous and performance-oriented, and they rely on closed-loop learning. They are oriented toward the front line, allowing everyone to benefit from mistakes (worst practices) and triumphs (best practices).
As the company grows, every manager becomes a trainer for his or her group of reports, with responsibility to reach out across the organization to gather lessons and incorporate them into on-the-job training. As we will discuss in future blog posts, training and learning systems are among the primary benefits of scale, but too few companies take advantage of accumulated learning.
To close with a Buddhist proverb: “If a seed of a lettuce will not grow, we do not blame the lettuce. Instead, the fault lies with us for not having nourished the seed properly.”