CEOs Should Think Like Founders, Not Just Managers

Here are five actions leaders can take to move from a manager to re-founder mindset.

John Geraci | Harvard Business Review

David Kidder | Harvard Business Review

Apple, Alphabet, Microsoft and Facebook. Today’s most successful companies are for the most part young firms led by founders and their teams.

The signal is undeniable: The market now rewards the long-term vision and continual investment in new growth represented by these younger enterprises.

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Large companies apply startup methods such as lean experimentation, design thinking and agile development.

Large companies have been responding to these developments for some time, mainly by applying the methods of startups such as lean experimentation, design thinking and agile development. While these tactics are useful, when used alone they serve merely as Band-Aids.

The change that enterprises need to undergo to regain their growth trajectories is more profound, and it must start at the very top. To generate new growth, CEOs must stop thinking of themselves as chief managers and start thinking of themselves as re-founders.

Re-founders are leaders who, despite not having started the company, think with the mindset of a founder. They do not focus their energies on incremental growth through endless optimization, but instead look to leverage their company’s assets to build new offerings, move into new markets and create next-generation solutions.

We coach CEOs of large enterprises who are in the process of re-founding their companies and have seen firsthand what works best for them.

Here are five actions leaders can take to move from a manager to re-founder mindset:

Shift your mindset

Strategists in mature businesses think in terms of total addressable markets, which allows them to size a potential business and plan accordingly. Re-founders think in terms of total addressable problems. They ask: How many people have a problem that this solution could address? This mindset uncovers potential opportunities before there’s a market for them.

Don’t seek consensus

When it comes to decision-making, big-to-bigger enterprises look to gain consensus as a way of minimizing the risk of failure. In contrast, re-founders recognize that new opportunities lie outside of the realm of consensus. These are leaders who acknowledge differences of opinion and move forward anyway, recognizing they are making a bet on a conviction and may ultimately be wrong.

Embrace productive failure

Failure isn’t something to be aimed for or celebrated, but it is a tool for getting to the truth. Re-founders use productive failure to guide them to the right solutions, extracting lessons from a failed process and using them to correct course.

Use new metrics

New initiatives are not businesses per se. They’re hypotheses about future businesses. As such, it is deadly to hold them to standard growth metrics. They require their own set of metrics that will enable them to grow and flourish.

Develop a portfolio strategy

In contrast to the typical big-company “Hail Mary” approach to new growth, in which all hopes are pinned to a single initiative, re-founders apply a portfolio strategy that involves thinking like a venture capitalist more than a builder, by articulating a solid growth thesis.

This article first appeared on Harvard Business Review and was republished with permission.

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John Geraci is an entrepreneur working with Bionic.

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David Kidder is the co-founder and CEO of Bionic.

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