Founder’s Mentality Notes
Evan’s Takeaway
As companies become successful, they become riddled with complexity and bureaucracy. These circumstances can cause the company to eventually stall-out or go into free fall. There is a key to getting out of these two states. Aggressively reduce complexity and costs where at all possible and return to the core of the business. In other words, what makes that company unique, and how can we do that even better? It’s also imperative to have a motivating mission, excellent frontline service, and be focused on the long term as these transformations take up to four to six years. Incremental change will not work; it must be transformational change.
Chapter 1
The Founder’s Mentality
The Key to Achieving Sustainable Growth
Growth creates complexity and complexity is the silent killer of growth
Companies have to excel both externally and internally to be successful in the long term. You can’t sustain profitable growth in a competitive market if you’re a disaster internally, and you can’t maintain a high-performance culture internally for long if you’re failing in the marketplace.
Scaling insurgents possess a clear sense of mission and focus to which everyone can understand and relate. They abhor complexity, bureaucracy, and anything that gets in the way of the lean execution of strategy.
Three keys to a founder’s mentality:
Insurgents mission
Owner mindset
Obsession with the frontlines
Companies lose the founder’s mentality as they become larger.
Treat each customer as a friend.
Success does not naturally beget success. The hardest thing to do is keep your edge and stay on your game as you succeed and grow.
Employees get specialized training on emotional intelligence with two aims: listening with empathy and understanding each guest’s unique needs.
The difference between employees who operate with an owner’s mindset and those who don’t are like devoted parents vs. a restless babysitter.
Keep a strong cost focus, treating expenses and investments as if they were their own money.
Every cost matters.
A bias to action.
Hiring focused heavily on young people with a hunger to succeed.
Bureaucracy clogs the arteries of business and slows it down.
Does everyone understand the company’s mission?
Do we think and act like owners?
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Chapter 2
The Three Predictable Crises Of Growth
How Great Companies Lose Their Way
Only 1 in 7 companies that stall out will recover to prior momentum.
As companies grow in size and complexity, they lose the dexterity and flexibility they need to sustain growth.
“You don’t get old and stiff; you get stiff, then you get old.” - Old yoga lady
Growing a new business successfully involves pursuing the benefits of scale while staying true to the founder’s mentality.
We must make complexity reduction a way of life.
Internal politics consume more time and energy than ever.
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Chapter 3
Combating Overload
How the Founder’s Mentality Overcomes the Choas Of High Growth
Open up the lines of communication.
Celebrating and rewarding front line heroes.
Codifying best practices.
Create a council of franchise players.
Build a lean and hungry organization
Every budget item needs to be defended each year.
How to grow the owner’s mindset:
Promote from within as much as possible. Ensure the senior leaders invest massively in the people around them
Set big but straightforward targets for the units of value creation in the company, and empower the leaders to act like entrepreneurs.
Have a zero-base mentality for everything, from yearly budgets to the future of the business itself.
Ask the following questions:
If we could start over, would we invest here?
Is this still the best use of resources?
Is this just an artifact of history and past budgets?
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Chapter 4
Reversing Stall-Out
How to Rediscover What Made You Great When Growth Starts
Complexity is the single most common cause of staff-out.
Launch an assault on the complexity and its costs.
In this stage, we need/have to be transformational and not incremental.
The key to rebirth is a radical and swift reduction of complexity and costs throughout the company.
Give engineers one day per week to work on their own ideas.
Kill at least one nonessential layer, process, or reporting requirement every month for a year.
Routinely ask your people if they would recommend that a friend work at your company.
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Chapter 5
Stopping Free Fall
Using the Founder’s Mentality to Save a Business in Rapid Decline
Shed concord assets and businesses to focus all energy on fixing the original core business.
Free-fall requires intense non-incremental action across multiple fronts. When a company is in a free fall, the status quo is not an option for those in charge.
Essential Steps To Revise Free-Fall
Build a resounding team
Focus on the “core of the core”
Redefine the insurgency
Rebuild the company at the frontline
Invest massively in a new capability
Wild card: consider private ownership
Knowledge of the past is good, but the defense of what’s no longer working is bad.
Key approach = shrinking to grow.
Strip away complexity and second return to the core,
More free falls that rebound takes four to six years because they are so comprehensive in scope.
Marvel built itself on its ability to pivot, not leap, into a new market.
Focus on four years rather than quarterly.
Simplify meeting structures.
Increase your appetite for risk.
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Chapter 6
Action Plan for Leaders
Infusing the Founder’s Mentality at All Levels of Your Organization
Leadership is learnable; it can be mentored, measured, practiced, and improved.
Leadership is not just for the CEO.
Self-awareness, as a company, means you make a realistic assessment of your vulnerabilities.
Don’t move on to large scale ideas until you’ve perfected the small details.
If you don’t have a dream, then it can’t come true.
As companies grow and professionalize, their stated missions can devolve into uninspiring generic statements of corporate ambition.
Ask yourself what differentiation propels your business model, and how are you going to keep it fresh?
Managers are people who do things right and leaders are people who do the right things.
Efficiency is the measurement of management, and effectiveness is the measure of good leaders.
Invest in new assets and capabilities to renew the core
Take extra time and energy to be an active listener = FIVE WHYS
Great leaders scale their teams by spending a lot of time recruiting talent, mentoring talent, promoting talent, and trying to retain talent.
What differentiates the company? How do we do that uniquely? How do we do THAT uniquely?
Shift more focus on long term goals and horizons.
Recognize the tendency of a business to become increasingly short term and fight against it.
Leaders must be guardians of speed and agility.
Hidden killers of speed:
Excess complexity
Energy Vampires
Debates in committees where no person has the right to decide
Excessive organizational layers and span breakers
Large corporate staff endlessly initiating new activities to inform themselves better
Evan Knox
Founder Of Caffeine Marketing & CaffeineLabs