Why is profitable growth so hard to achieve and sustain? Most executives manage their companies as if the solution to that problem lies in the external environment: find an attractive market, formulate the right strategy, win new customers.
But when Bain & Company’s Chris Zook and James Allen, authors of the bestselling Profit from the Core, researched this question, they found that when companies fail to achieve their growth targets, 90 percent of the time the root causes are internal, not external—increasing distance from the front lines, loss of accountability, proliferating processes and bureaucracy, to name only a few. What’s more, companies experience a set of predictable internal crises, at predictable stages, as they grow. Even for healthy companies, these crises, if not managed properly, stifle the ability to grow further—and can actively lead to decline.
The key insight from Zook and Allen’s research is that managing these choke points requires a “founder’s mentality”—behaviors typically embodied by a bold, ambitious founder—to restore speed, focus, and connection to customers:
• An insurgent’s clear mission and purpose
• An unambiguous owner mindset
• A relentless obsession with the front line
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