When a visionary founder of an organization moves on, it can inevitably cause trepidation for those left behind. Recently, a frog client shared an anxiety that many mature companies face in the wake of their founder’s departure. They are an extraordinarily successful multi-billion-dollar company that has enjoyed years of profitable growth. However, there have recently been opportunities in their market—big opportunities—that they missed, and they can’t afford to miss more.
Successful founders often leave to the organizations that survive them a strong and vital cultural legacy. As organizations mature, so do cultures. The “we have nothing to lose” thrill of innovation and Goliath-slaying disruption is eventually supplanted by a “we have everything to lose” mentality as a growing number of investors and stakeholders leads to an increased demand for stability and steady returns.
The incentives for consistently delivering on returns are strong—so strong that it creates its own mindset that, by definition, approaches the world differently from others. We can call this mindset the “operator’s mindset.” In this particular client’s case, their competition are startups who clearly saw how much opportunity our client was leaving on the table. As a result, our client has not only failed to capture value in emerging market opportunities, but they have also disappointed the very investors they aimed to please in the first place, who have reassessed the value of their holdings considering where they see the growth potential.
Yesterday’s missed opportunities become fertile ground for today’s crises of confidence. These crises in turn bring about necessary questions:
Are these missed opportunities the beginning of a larger trend?
Have we lost our magic touch?
And most importantly: What should we do differently so we do not miss the next one?
This anxiety is common. Reminiscing on their own scrappy origins, our client has come to realize that their maturity—and more specifically, the supplanting of the founder’s mindset in favor of the operator’s mindset—is the root cause of their concerns.
At frog, we have worked with founders since our own founding over fifty years ago. Most famously, we have worked with Sony founder Akio Morita and Apple founder Steve Jobs, among dozens of other visionaries. Founders had become such a large customer segment for us that we created our own Venture Design practice with an approach, process and revenue model tailored to the needs of founders.
Understanding this customer segment has been essential to the growth of our Venture Design practice. It has been essential to the growth of our business as we help mature organizations of all kinds challenge the status quo by recapturing and rekindling the founder’s mindset—as they seek to thrive beyond the exit of their founder.
Through the years, we have observed in successful founders four key attributes that define the founder’s mindset.
They unpack into a complex set of skills and capabilities that collectively help them succeed where many have failed.
We have seen organizations address the loss of the founder’s mindset, and the need to balance it with the operator’s mindset, by creating a special team, such as a Center of Excellence (CoE). A CoE operates quasi-independently of the core business and represents the founder’s mindset within the organization. Some organizations have seen success with this approach, but many have found it exceedingly difficult to see the future and incubate the next big thing beyond the core this way.
There are many reasons for this. However, one of the consistent themes we have observed in these scenarios is that the primary mechanism of change becomes negotiation between the core business and the teams, CoEs and initiatives looking beyond the horizon. Negotiation is an activity that compromises the needs of both parties, requires time most businesses just do not have and disrupts team harmony and corporate unity.
If you have studied innovation or improv, you’ll have heard of the power of “yes, and…” thinking. Unfortunately, today, operational excellence often looks like finding ways to say “no, but…” to ideas that are unproven or unfamiliar. Introducing “yes, and…” when discussing a new idea not only increases positive energy in a team environment, it encourages others to build on the idea, adding diversity of thought and shared ownership.
We are all guilty of believing we know our customer. But our knowledge of our customers is inherently biased because we seek our understanding of them through the lens of our business motivations. So, the next time you are in a discussion about who your customer is or what they want, ask yourself: am I as certain as I can be about this, or should I get some feedback from a real customer? Your customer might be a peer in your department, your admin or the teammate who uses the spreadsheet. Seek customer input early and often—and use that input to inform your perspective.
Sometimes a conversation with a few customers is enough to get quality insight. But more often when you have an idea about something novel, you need to prototype the idea so people have a better understanding of what it is and can provide you with meaningful feedback. Experiments can be small in scale and, if possible, designed to learn one thing at a time. How much should it cost? Run an experiment. What should it weigh? Run an experiment. Should it be round or square? Blue or red? Narrow or wide? You get the point: Keep testing until you see results.
Remember in “The Karate Kid” when Daniel is practicing his “wax on, wax off” drills? Mr. Miyagi had him repeat the benign motion of waxing the car so that his muscle memory would kick in when the time came for the real fight against Cobra Kai. The same principle applies here. Practice a founder’s mindset when creating a spreadsheet, stocking the kitchen shelves, when making slideware, in business review meetings. If you “save” these behaviors for product and market activities only, you will not have built the proper muscle memory (and yes, unfortunately, that’s when people get injured). The goal here is balance, which means knowing what works and what doesn’t. And the only way to know that is to reflect on your results. You may find there are situations or circumstances where the operator mindset is the best way to look at the issue. And you will likely find that some things are much easier to make than others. But this is the point. Without reflection, you will not be able to achieve balance.
So, now what?
The above sampling of skills is part of an offering we call the “Founder’s Workout”—a comprehensive assessment of the mindset and capabilities of your organization’s leadership team and an action plan that puts the skills to use in real time with real business challenges. You can learn more about frog’s Founder’s Workout, as well as how it can bring value to your business by reaching out to us.