We’ve been holding workshops for the last eight weeks, focused on a single question: “How do incumbents recover their sense of the Founder’s Mentality®?” One consistent theme: If you want to recover your Founder’s Mentality, act like an insurgent. Too often, when large, lumbering, complex companies try to simplify themselves, they start with large, lumbering, complex initiatives. Sadly, these initiatives result in more complexity, not less.
To use my brush broadly (and probably unfairly), incumbents fight complexity with complexity, while insurgents fight complexity with simplicity. When you talk to leaders of insurgent companies, you often hear that they have neither the time nor patience to deal with complex, lumbering initiatives. They will sacrifice thoroughness, thoughtfulness, fairness and deliberation to the gods of fast results. They would rather act now and learn from activity than plan their way to a more thoughtful implementation of a comprehensive program. This idea led our workshop participants to the idea of surgical strikes.
I’m guessing it’s rare that military metaphors and Zen philosophy appear side by side in many blog posts, but, interestingly, surgical strikes have parallels to the Zen journey toward kensho (an awakening). In helping students on their journey, the master will use koans (various riddles or stories to expand thinking) or the kyosaku (an encouragement stick). In the latter case, students ask a helper to smack them along their back or shoulders to wake them or get them to think in a new way. Sometimes, they are not asked, but rather volunteered by helpers, who notice when students are sleeping or not paying attention. Surgical strikes can work in much the same way to reawaken a large company.
With all this in mind, workshop participants collected the best examples of surgical or kyosaku strikes, so they could bring them back to their companies. These strikes fell into three buckets: Actions to put the customer first (1–3), actions to focus on the front line (4–7) and actions to speed up decision making (8–11):
- Dial in on your customers. One of the principal reasons incumbent companies start to drift away from the Founder’s Mentality is that they stop listening to customers. Participants in multiple workshops suggested that one way to amplify the customer’s voice in the C-suite is to set up a call-in number—not one for customers to call in on (if you don’t already have one of those you’re in trouble), but a line the CEO and other executives can use to listen in on those customer calls. As one CEO said: “The notion that top leaders don’t have time to listen to customers is a cop out. In my previous company, we asked our tech guys to set up a toll-free number that any of us could call and listen to customers call in to our service centers. I would listen for at least 20 minutes every day on my drive home.” I mentioned this in another workshop, and the next week, the head of marketing at a large company called to say he had put one in place: “It took three days to set up, but now we’re all addicted. Sometimes I sit outside my house in my car, having arrived home, but wanting to hear how individual calls end. For the first time in a long time, I feel I have a window on what is really happening.”
- Start each management meeting with one transaction or one customer. One participant advocated the idea of starting each meeting with a specific customer transaction and using it to explore critical issues facing the company. Her point: “Let your customers tell you what’s wrong; they know far more about what it’s like to work with you. Why speculate?” She gave an example of a woman who called customer service to complain about how hard it was to return a product. “[By reviewing] one five-minute call, we could talk about issues with our IT systems. We could talk about how good our call center operators were, but how constrained they were by our procedures. It turned out our people were good enough to make our customers feel better, but we never gave them the freedom to really solve the problem. And we reminded ourselves that our core customers are loyal—this woman was so apologetic about even complaining. In five minutes of studying one transaction, we had five actions. Who needs PowerPoint?”This leads to a related idea: Never talk about average customers; always talk about specific customers. Many of you probably know the story of Les Wexner using Ali MacGraw’s character in Love Story (Jennifer) as the design target for The Limited and Cybill Shepherd’s character in Moonlighting (Maddie) as the ideal customer for Victoria’s Secret. Though they were fictional characters, they gave every merchandizer a specific question to ask: Would Jennifer or Maddie want this product? Folks at the workshops told stories of three specific founder-CEOs who put specific customers at the heart of their strategy. Like Wexner, one founder of a well-known consumer products company designed his product strategy around the needs of two specific customers. He would ask, “Are you sure X or Y would want this?” A mobile phone company founder focused on seven different customer segments. He identified an archetypical customer for each and would demand that anyone from marketing or product development talk specifically about how their initiative would address a specific customer’s needs. Finally, the CEO and innovation team of one large multinational cocreated the following nonnegotiable: “We will only launch innovations that outperform on the preference drivers of the target consumers.” Their point: If we don’t know the target consumer or her preferences, there’s no point in talking about new products!
- Talk to detractors. Each member of the senior team should talk to five detractors a week. The impact of this is probably self-evident, but here is what one participant said after trying this: “You take things a lot more seriously when you have promised customers you will address their issue. We all get this, but boy does it make a difference when you have detractor conversations. You are emotionally committed to solving the problem. You have a much greater sense of urgency. Your name is out there with a promise against it. We have started to act a lot faster.”
- Start a council of kings. If the first three actions deal with rediscovering the voice of the customer, the next three deal with rediscovering the voice of the front line. Part of the reason large organizations lose touch with the customer over time is because connections also fray between top management and the front line—those directly accountable for delivering the customer promise. We call these folks the kings. In retail and service businesses, they might be store or branch managers; for large construction companies, they are often the site managers. As the company grows, CEOs tend to lose direct contact with the kings and eventually find that the main voice they are hearing day to day comes from the court—the functional heads and span breakers, who help to support the kings but are not in frontline roles. The most immediate way to reconnect is to form a council of kings that the CEO can use as a sounding board on key strategic and operating issues. One of the first useful acts of that council should be to define in frontline language the strategy on a hand. This is essentially a way to articulate in a few words the company’s insurgent mission (the thumb) and the three or four capabilities (the fingers), which you must spike (be awesomely good at) to deliver.
- Simplify by putting leaders back in frontline positions. Another surgical strike that came up a number of times in the workshops was to put leaders back onto the front line—not forever, of course, but for some meaningful period of time to experience what is happening. In one workshop, a founder explained how this worked at his company. “One of our core businesses is our restaurant business,” he said. “We were preparing to rapidly scale the business internationally, but I was concerned about doing this, because I realized that our restaurant operations were simply too complex. We relied on the superhuman efforts of our store managers to keep the restaurants going. We decided that each of us from the center would start to work one day a week in the restaurants to understand what was driving the complexity. What we found was that our food and service standards were putting massive pressure on our kitchens—they simply had too much to do to meet these standards. This led us to renegotiate our supplier agreements, putting a lot of the food preparation burden back up the supply chain. We never would have gotten there if we didn’t work a couple months in our kitchens. The local leadership had to optimize within the constraints we had placed on them; only the senior leaders could figure out how to lift these constraints.”This was a consistent theme in our workshops. The best way to rediscover the Founder’s Mentality, particularly the bias to action and passion for simplicity, was to leave your desk and start working side by side with your front line. The answers to simplicity are out there, but they are unlikely to arrive on your desk in memo form. They are the reward for those who get back out in the field. Vikram Oberoi’s koan about the teacup is a useful reminder of this.
- Gather hero stories. In addition to telling a customer story at the beginning of each meeting, a number of workshop participants discussed the power of telling hero stories—tales of employees who have done extraordinary things to support customers. To quote one CEO: “I start each meeting asking one of my guys to talk about a hero in their lane. First, the stories are inspiring. Second, they help us understand better the issues our people face. Most stories are about overriding our systems on behalf of customers, and we need to know why the systems fail. Third, it gets all our people thinking a bit differently. We become collectors of heroic stories, and as good collectors, we start to investigate all parts of our business for hidden gems. We learn more, and our people know we’re searching. I think it inspires them to become a story.” We heard echoes of this surgical strike in previous discussions about the iconography of founders and the power of storytelling.
- Complete a talent table. A number of workshop participants talked about the need for a talent table. We introduced this concept in an earlier blog post. It refers to the notion that once you understand the strategy on a hand, which sets out the core actions you need to take to deliver your company’s insurgency, you need to review where your talent is. The talent table lines up the top jobs based on value against the top talent based on potential. Putting together such a table for the top 50 to 100 leaders is a surgical strike to allocate your most precious resource—talent—against your strategy. One workshop participant reported back, “I worked with HR to put together a talent table the moment I got back into the office. It was sobering. We had most of our high-potential talent stacked up against corporate initiatives and very few working on the front line of our business. We were teaching our best talent that the best way to thrive was to look up and inward. It will take a while, but we need to shift our rewards to those who focus outward and strive to work with the front line and customers.”
- Reintroduce the Monday meeting. The notion of the Monday meeting is simple: The executive team agrees to meet one day a week (it doesn’t have to be Monday, obviously) and promises the organization that the meeting will be used specifically to unblock organizational obstacles stopping individuals from doing their jobs. This signals to your people that you can only blame the bureaucracy for four days, because you have promised to eliminate obstacles once a week. The whole point is to increase the cadence of decisions so people have less reason to blame bureaucracy for inaction. As one participant noted: “This one gets me mad. We used to do this all the time when the founder ran the meeting. He used it to reinforce core values and to pound his fist at creeping bureaucracy. Over time, a group of us decided the meeting had passed its sell-by date. We didn’t have the time to meet like this, and we all knew the founder’s views. We could predict what he’d say before he slammed his fist down. But now, we never meet to address real issues. We have become tolerant of the complexity we’re creating. No one is slamming their fist anymore.”
- Create lines in the sand. Another surgical strike to increase the organization’s cadence is to introduce lines in the sand. The point is that you can’t change overnight every metric or the way you manage them. But you can immediately change one metric and the way you manage it. You should pick a few of these metrics and draw lines in the sand around delivery. If someone crosses it (or under-delivers), the leadership will respond immediately. By far, the most interesting question is whether growth should be a line in the sand. In other words, should leaders know their job is producing growth in all markets, across all product lines, and if they fail, the company will respond immediately to figure out the problem. Getting the growth metric right, of course, is critical, but it can be an important line in the sand. As one executive put it: “We have dozens of initiatives, many on revenues and many on costs. But our cost initiatives all require growth. We are assuming that we can capture the benefits of greater scale and scope. If we don’t grow, these cost initiatives become something very different. They are about cutting some essential parts of our organization. So growth is vital not simply for revenue goals but cost goals. But we don’t think that way. We don’t make growth the thing that helps make everything else easier. My one action when I go back is to make growth a nonnegotiable.” Whether it is growth or another metric, the reason to draw lines in the sand is to dial up the organization’s metabolic rate. People know that if they don’t deliver on a specific metric, the leadership team will take immediate action—to recover, to reallocate resources, to coach or to punish. That metric means something to everyone, and they understand they must act collectively to achieve it.
- Conduct a Decision X-ray. A lot of our workshop discussions were about speed and how the Monday meeting and lines in the sand can increase it quickly. But we also talked about the need to be more adaptable when it comes to decisions. Listen to one CEO: “I think our biggest speed problem is we measure the wrong things. We’re actually not bad at taking the initial decision. If we know something is important, we move it to the top of the agenda and we move quickly to say yes. Our problem is that once we’ve made the decision, we then take it off the agenda completely. If it’s a JV, we enter into the JV. If it’s a product launch, we launch the project. But we all know that only when you’ve actually taken the decision does the fun start. You learn and need to adjust quickly. Well, we’re miserable at that. We don’t think about decisions as the start of a process. We don’t think about the need to adapt, to reallocate more resources and etc. So a lot of ‘fast decisions’ still end up dying slowly.” The surgical strike, then, is to use a tool we call Decision X-ray. Essentially, this is an exercise to take a few decisions and think about the life cycle of each, making sure that senior leadership devotes time not simply to the initial decision but also to learning and adapting. The initiative stays at the top of the agenda through the full learning phase. As one CEO noted, “We were amazed how much value we created in the second, third and fourth adaptation. If we can learn to take these decisions quickly, we are pretty sure we can adapt our way to a much better answer than our competition.”
- Stop one cultural workflow. The final point is simple: Stop doing things. One participant concluded the workshop saying, “I like all these surgical strikes. But I think my people will burst if I add another. So on Monday, I’m going to stop five things. I’ll figure out a way to get a frontline vote on which things to stop. But at this point, I almost feel stopping anything will be value added. Is that sad?” Clearly, he wasn’t going to stop just anything, but the sentiment was shared by many. Perhaps the most important surgical strike a CEO can make is to simply halt the biggest examples of incumbency clutter that has built up over the years.A quote often attributed incorrectly to Michelangelo about how he carved his masterpiece David is: “It is easy. You just chip away everything that doesn’t look like David.” We spent two full workshops on this one issue, basically asking what to stop. It raised the topic of cultural workflows—unhelpful activities that emerge over time as a result of positive cultural attributes. One executive noted, for example, that a positive part of the culture at his company was that everyone needed to be on top of the details of their business. “Not knowing your sales results from the day before is a fireable offense,” he said. “Our CEO can ask any detail and expect you should know.” But the unintended consequence of this one cultural element was that an entire industry had been built within the ranks to brief superiors. Every meeting demanded endless briefing books, which took hours to prepare and update. In short, 99% of effort was wasted with a goal of being able to find one specific answer to one question 1% of the time. Another example was the culture of no surprises. To quote one participant: “A bad meeting is one where someone was surprised by an issue and, God forbid, there was actually conflict between two parties. That means someone wasn’t pre-wired. Conflict has become a bad thing. And that means that it takes 11 pre-meetings per issue for one meeting of our 11-person executive committee.” These cultural workflows can kill a company, for all the right reasons. And, as regular readers know, we like conflict.
We will keep collecting examples, but we hope you can use this list to get started. It’s kyosaku time.