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The founder of the $600 million construction company called me recently and was frustrated by the young leader he had brought into the business to take over for him. “Okay, what is the soul of your business?” I asked.
“I don't know,” he told me.
“What is the key to reaching $600 million from a startup?” I asked. He knew the answer right away. “We're doing very complicated projects,” he said. “Through it, we have never missed the Great Recession, the supply chain challenges, the pandemic – deadlines. In a way, our promise to deliver on time is the essence of our strategy.
It was clear: he had to go back to founder mode. “Dave,” I told him. “I'll give you permission to go back and subtly manage that part of the company until you find someone who can do it more than you or more.”
Outsource virtually everything
He touched on from the fire when Airbnb founder Brian Chesky shared at the Y Combinator event that he misled him by running the company like a corporate manager. Paul Graham, founder of Y Combinator, wrote a viral “founder mode” essay on the difference between corporate manager mode and founder mode.
Most people who missed something important aren't about micromanagement for themselves. It's about staying focused on the soul of business. As Tom Peters famously said, you can outsource everything except the spirit of the company. I argue that you can delegate everything except the soul.
It is the founder's job to become a business spirit and practical. You will not let your soul escape, so you will become a maniac micromanager and even be allowed to become an a hole if necessary.
Protect your soul
To protect the soul of a company, you need to identify what has encouraged its success and continue to be dedicated to it until it can be carried over by an equally committed person.
Steve Jobs understood this. He stuck to Apple's design. Because it is the spirit of the company and I have lunch every day with former design chief Jony Ive to maintain this and center. I kept that focus after my job passed away, but innovation stagnated after Ive left in 2021.
Living the soul
Randy Amon, founder of ABL Electronics (later sold to APC), focuses on the customer experience (the company's soul) by reading “the head of customer service” along with the “owner” and handing out business cards. His obsession with getting the right side of his business led to the innovations he personally led. Randy became the customer care SVP with $40 billion Schneider Electric when he bought the APC, injecting obsession into this huge organization.
The key to keeping your soul alive is to experience it firsthand with your team members. AFLAC requires that all employees submit claims to better understand their customer experience. Horst Schulze of Ritz-Carlton stayed at his “Women and Gentlemen” (employee label) at a five-star resort to see what the customer experience of other “Women and Gentlemen” (customers) should look at.
When the soul dies
Acquiring the valuable companies often carelessly removes the spirit of the company in search of efficiency, and ultimately destroys value along the way. One founder who focused on employee experiences and completed the acquisition integration saw his process ruined by the strategic companies that acquired him. The company later sold the division for some of what they paid for.
The bottom line is that the soul matters – design, customer experience, algorithms, on-time delivery, and the founder's work is to keep it alive. It is too dangerous for a company to lose its soul.
