This blog has explored one central question above all others: As a company grows, how can it maintain its Founder’s Mentality®? We’ve put forward the observation, based on our experience with hundreds of management teams, that absent specific intervention, companies naturally follow a default path—they accept a trade-off between the benefits of size and their original culture of speed and customer focus. We’ve asserted that this default path results in horrendous loss and have sought to define the loss as precisely as possible. We’ve argued that the essence of the Founder’s Mentality is the notion of insurgency, and the essence of insurgency is your attitude toward the future: Are you a “future maker” or “future taker”?
We promised to start looking into this last question in more detail, and I’ll start with a story featured in Steven Johnson’s new book, How We Got to Now: Six Innovations That Made the Modern World. Johnson tells the tale of Frederic Tudor, the so-called Ice King of New England, and it is one of the clearest examples I’ve ever come across of a future maker turning into future taker.
Tudor was born in Boston in 1783, and following a trip to the Caribbean in 1805, he hit upon the idea of shipping vast quantities of ice cut from New England lakes to southern climates, where the locals could benefit from its cooling effects. As Johnson tells it, Tudor suffered decades of frustration trying to make his enterprise work, but finally came up with the right repeatable model. He took advantage of three nearly free New England commodities: lake ice for the core product, scrap sawdust for insulation and unfilled capacity on New England ships traveling to the Caribbean empty to pick up agricultural products for consumption back home. Through years of graft, Tudor was finally able to export his ice all over the world, amassing a fortune of $200 million in today’s dollars. The cooling revolution Tudor began eventually transformed industry after industry, changing how we eat and sleep and even altering US presidential elections after the rise of the Sun Belt.
For our purposes, the tale of the Ice King is a wonderful example of how easy it is for the most revolutionary of leaders to shift from future maker to future taker. Johnson’s description of Tudor couldn’t be clearer: For most of his career, he sought to transform lives and create a better future by embracing everything that was new in technology, trade and consumer behavior. But when a better solution materialized, Tudor became its biggest opponent.
Johnson explains how a Florida physician named John Gorrie had tried suspending ice above his patients’ beds to help reduce fevers. But the supply was not always reliable, and patients died. Eventually, Gorrie figured out how to create a more reliable source by using compressed air to freeze water into ice—an early version of the freezer. But, as Johnson writes, “Tudor himself launched a smear campaign about Gorrie’s invention—claiming the ice produced by his machine was infected with bacteria. It was a classic case of a dominant industry disparaging a much more powerful new technology.”
The Ice King was an insurgent—until he wasn’t. He embraced every invention and disruption that would help advance his insurgency—until he didn’t. For three decades he was a consummate future maker, having fought a revolution on behalf of an underserved customer. But one day he decided that the future was a threat to him. He stopped embracing the future and started fighting it. Rather than maintaining the insurgency as the Ice King, he began to define his business more narrowly—he was more like the “Natural New England Ice King, shipped in sawdust for miles.” The bigger he became, the smaller he thought, until his view of his business was so narrow he became hostile to an invention that would transform his market forever.
There was nothing inevitable about this. There was only one industry—ice—and Tudor could have embraced Gorrie’s invention and adapted his model. As Johnson points out, many others around the globe devised refrigeration systems at about the same time and built a market whose time had come. But as so many incumbents have done since, Tudor fought it. Why? That is the topic we will start exploring more closely. We recognize that this is well-traveled ground by authors far more established—one only needs to start with Clayton Christensen’s . But we will limit our exploration to the causes and implications of switching from future maker to future taker, starting in our next blog post, with a look at the innovation funnel.
We believe emphatically that getting bigger does not automatically turn you into a future taker. In fact, increased size should create extraordinary advantage, helping a company lead innovation and respond to disruption. But, absent specific intervention by the leader, the default path for companies as they grow is to turn from an enterprise embracing the future to one fighting it.
In fact, leaders are often the problem. Sometimes the original founder becomes the biggest obstacle to future change. The Ice King defined and redefined an industry several times. But when he was at his strongest, he decided that the next disruption was a disruption too far. Rather than embrace the new insurgency, he fought it. Rather than welcome the future, he denied it. The Ice King abdicated his role as future maker, and while his revolution has spawned many household names, from Birds Eye to Carrier, it is notable that Tudor’s name has all but faded away.