The Great Refounding

The Great Refounding

Why rebuilding your 2021 culture with a founder’s mindset will lead your organization to recovery, reactivated growth, and a new future.

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This year, most business leaders will face existential crises—and, if you’re smart, an opportunity, too.

As we shared in the spring with our series on The Great Reset, this moment amounts to a period of radical change. It may be a new year, but we still continue to live in a time without precedent. The world economy continues to be volatile, employees work from home with no end in sight, new variants of Coronavirus are popping up as we speak, and millions of Americans find themselves unemployed. This all amounts to acute problems and needs that spans all markets and all nations. It is a challenge that requires incredible leadership, ambidexterity, and flexibility. We have already seen new businesses and innovations rise to the occasion, while some cannot seem to catch up.

Yet, to truly tackle this challenge, entire organizations must do more than simply address changes in supply or demand, or rebalance their operations. Leaders must “re-found” their business from the bottom up. They must, in essence, become refounders.

What does this mean, exactly? At Bionic, Refounder is a term we use commonly to refer to leaders who think with the mindset of a founder. We outlined why this is so important in a 2017 in Harvard Business Review piece, explaining that refounders do not focus their energies on incremental growth through endless optimization. But instead, they look to leverage their company’s assets to build new offerings, move into new markets, and create next-generation solutions.

Those who succeed at refounding their organization will go on to drive the future. They’ll deliver the new products and services people need. Meanwhile, those who neglect to refound their organizations will quickly become irrelevant in this new, emerging world.

What does a refounder look like? 

  • A refounder uses the mindsets and lenses of a new company leader fighting for survival. They evaluate how to move through the landscape, take advantage of the biggest new opportunities, and avoid the pitfalls of big enterprise stagnation.
  • A refounder pays close attention to the right growth metrics, embraces productive failure as a learning tool, and maintains a healthy portfolio of bets on what the future will turn out to look like. When the future arrives, whatever it looks like, they are prepared for it.

Thinking like a founder is especially important for any leader that needs to grow their organization. And today, in the Great Reset, refounding will be critical.

As my friend and Harvard Kennedy School Researcher Gautam Mukunda explains:

"Most organizations exist in a stable equilibrium. That’s why they’re hard to change — because anytime you try, restoring forces push it back to where it started. Think of a marble resting in a bowl. Trying to change the organization is like flicking the marble. It will move around the bowl for a while, but most of the time it will just settle back down to the bottom, right where it started. In a crisis your organization is much easier to change, though. Why? Because a crisis shatters the bowl. Your company can’t stay in its old stable equilibrium — if it could, it wouldn’t be in a crisis! Before the crisis, your job was to tweak the bowl — patch the cracks, maybe even change its shape slowly over time so that the marble eventually gets where you want it to be. But now, in a crisis, you have to build a new bowl. You have to take all the old pieces and remake them into a new shape — now it can be a much better one, because you’re not constrained by the shape of the old bowl."

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Today, we find ourselves when we all have to “recreate the bowl,” deciding which pieces to carry forward with us and which ones to discard. Making this decision involves getting very clear about what your organizations the biggest needs are that your business serves, and what your organization’s proprietary gifts are for serving those needs. Those determine the pieces you carry forward to make the new bowl. Everything else gets left behind.

How does a refounder remake the bowl while the world economy is at a standstill and the road forward looks nothing like the road behind us?

We outlined three key steps that must be taken.

1. Revalidate the customer need you are solving

Your business has existed for years, perhaps decades or centuries, to solve a particular customer problem. In the Great Reset, that problem, as with everything else, has likely undergone sudden and significant change. New forces acting on individuals and communities, new behaviors and social norms emerging, new technologies thrust to the forefront—all of these have scrambled the map of individuals’ and organizations’ needs. As a refounder, you must look at these customer needs anew, as if it was Day One of your business. You need to understand exactly how they have changed, and how your organization can best serve them going forward. This involves taking an outside-in approach of your business and having an absolute commitment to commercial truth.

2. Rediscover your proprietary gift for solving that need

After understanding your customers new needs, a refounder should reassess their organization’s proprietary gifts in meeting those needs. What was the original magic that allowed your business to serve your customers better than anyone else? In what ways does that still serve you, and in what ways does it need to be updated and extended to serve customers in the new market landscape? To rediscover your organization’s proprietary gifts and dive into your internal strengths, start by holding stakeholder interviews, talking to SMEs, and conducting secondary research. When brought to the world, a true proprietary gift creates an impossible-to-replicate, unfair advantage that both your competitors, and most importantly, your customers recognize and reward.

3. Focus on dominating that need with your solution

Now, you as a refounder are ready to focus on solving that new need in the most compounding way possible. Every permission and all options need to be on the table. This means letting go of past success, models, and marketing entitlements. This means running a number of experiments quickly with the goal of invalidating or killing off your legacy offerings and launching new ones that focus on this new customer need. Optionality is the enemy right now, so do not preserve past solutions that were created disrupted and expired needs. Focus on your biggest opportunities and go after those with unrelenting force and energy — and win.

This is the process of refounding.

Refounding cannot be done alone

While it’s critical that you as a leader embark on this journey, it cannot be only the leaders who do so—to succeed, you need your whole organization to engage and come along with you. The solutions to the growth crisis will come from the edge, deep in the changing customer needs, not from the top of the organization. In order to do that, you as a leader must do two things:

  1. Tell the truth
  2. Ask for help

In times of crisis, leaders instinctively want to say, “I have the answer, everything is going to be fine.” As a leader, you have been conditioned to believe that is your job. And in normal times, it may be. When you are refounding, building the “new bowl,” this does not work. You are in an existential crisis, and your team needs to hear that you understand that, and are honest about it. You can’t sugarcoat things, and you can’t put an optimistic spin on things. I’ve learned hard lessons in this style of leadership.

If you want your company to rally around you and join you in refounding the business, you’ve got to lead with absolute truth: Here’s where we are today, and this business could die. Then, you need to explicitly ask for their help in saving the business, in refounding it. The ownership of this transformation cannot solely come from the top; it has to come from everywhere in the organization. That can only happen if leadership is open, honest, and inviting to the rest of the organization. It cannot happen without a deep sense of contribution and ownership, and most importantly, the recognition that you cannot do it without every member of the team.

One of the storied examples of a whole organization embracing the refounder mindset is Intel’s transition from memory to microprocessors in the 1980s. It’s worth retelling.

By 1985, Intel’s main offering, DRAM, had become a commodity. The company lost market share and competitors decimated its margins. Faced with this existential threat, former president Andy Grove engaged in a thought exercise with CEO/co-founder Gordan Moore one day: “If we got kicked out and the board brought in a new CEO, what do you think he would do?”

The answer was instantly clear: The new CEO would get Intel out of the memory business. This set off a transition that one manager likened to “Ford leaving the car business,” as the whole company worked to find a new offering to sell to customers, validate it, and quickly bring it to scale. 

Intel, which had always sold memory directly to manufacturers, became a brand-name microprocessor vendor that consumers demanded in their computers. Twelve months after the pivot, Intel ran a Superbowl ad for “Intel Inside.” The idea that saved Intel came from the deep middle and edge of the company. Intel successfully pivoted, and grew for decades.

Like Intel in the 1980s, most of today’s organizations need to transform now in the wake of the Great Reset. They don’t have the luxury of doing it over a decade—the new world is emerging all around us as you read this. When leadership, management, and the entire organization adapt a refounder mindset, embrace their core values, and make decisions quickly as a team, they can face this emerging world, find their place in it, and grow.

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We hope you enjoyed The Refounders Newsletter with David Kidder!

Len Laycock

Author & Award Winning Marketer

3y

David,.. from one re-creator of bowls to another, "Well said".

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Sanjay Kothari

Product (Founder w/ exits) | Strategy (BCG) | Innovation (Partner @BCG DV)

3y

Great article - Insightful & Actionable

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Robi Walters

Artist In Residence at Aston Martin Lagonda Ltd

3y

I'm not one to read letters like this specially all the way through. I found this most timely and excited to go to work tomorrow and start like I'm at the beginning! Thank you.

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