The best predictor of enterprise New to Big success has been something founders learn through the unrelenting grind of launching and scaling their startups: It all starts with the CEO’s mind-set. We did not realize how rare it was to find a growth leader—someone who can reliably deliver New to Big businesses and net new revenue—at the top of a Fortune 500 enterprise until we saw it up close. To say we were alarmed would be a polite way to put it.
A bit of radical candor: If the CEO and their leadership team do not directly own and drive New to Big, growth will not happen. Period. Enterprises do not have a money, ideas, or talent problem; they have a leadership problem: leaders who fundamentally have lost the incentive and skill to discover and create growth as a permanent organizational capability.
In Jeff Bezos’s annual letter to Amazon shareholders over the past twenty years, he’s continually reinforced the importance of a “Day One” mind-set, and cautioned against becoming a “Day Two” organization. Why? Because, as a founder, he understands how critical it is that the entire organization, starting with him, preserve their entrepreneurial mind-set. That fear of complacency, of losing speed and grit and an appetite for risk as culture scales—it’s what makes the company more like a scaled startup than a lumbering enterprise (and Wall Street has rewarded them for it).
On Day One, the hunger, passion, ability to adapt, and sheer energy are as strong as they will ever be, because that is what is required to survive. When you lose that core energy, you lose the ability to grow. Day Two is about stasis and irrelevance. Day Three is long and excruciating decline. In many cases, this may be your grand challenge as a CEO: to restore the “Day One” growth culture.
Which begs the questions: Are you playing to win? Or just playing not to lose? What’s the difference? It turns out, quite a lot.
As captured in one of my favorite books on team leadership, Top Dog by Po Bronson and Ashley Merryman, in 2008, researchers Geir Jordet and Esther Hartman published a paper studying performance under pressure among professional soccer players during penalty shootouts.1 In the study, they calculated the conversion rate of shooters in the final shot of a penalty shootout, comparing two scenarios: when the shooter’s team was down by a goal (so the team would lose if the player missed the shot), and when the shooter’s team was tied (so the team would win if the player made the shot).
Jordet and Hartman found that in the first scenario, when missing the kick would cause the team to lose, professional players converted 62 percent of those shots. However, when the conversion would result in a win, kickers were successful 92 percent of the time. It’s the same kick, the same setup, the same distance; the only difference is the athlete’s mind-set.
Playing to win means granting the full permission and investment to compete, even if the odds aren’t in your favor. Playing not to lose, on the other hand? It’s protecting an entitled culture of efficiency and derisking that is predominantly incentivized to avoid and obscure the consequences of failure.
Most organizations we meet are playing not to lose. As a result, “innovation” has become something of an empty buzzword. (We mostly avoid using the word innovation at Bionic because of the brain damage, baggage, and distrust that come along with it.) Even when an “innovation” team is given the mandate to crack open new opportunities and go after new solutions, technologies, or business models, their permissions and boundaries are narrow: Don’t take any risks until we’re sure we can win. Do the analysis, run the numbers, and create the twenty-year forecast so we can build consensus. Nothing launched means nothing failed, right?
Growth is radically different. Growth is urgent. Growth is grounded in commercial truth. Growth does not adhere to invisible permissions or restrictions. Growth is in the culture, or it’s not. When you’re honest with yourself, can you really say you’re playing to win?
All the CEOs and teams we work with are experiencing the same complexities and changes in the world as you are, and they know the velocity of change is only increasing. They also know they don’t get to opt out. By now we hope that you can see the cost of not installing and driving a permanent growth capability: the excruciating, painful decline of Day Three.
The good news is that you don’t have to be able to predict the future in order to grow. You only have to enable your teams to go out and uncover it. So don’t task an innovation team to go after technology-of-the-moment innovation theater; instead, commit resources to discovering and solving real customer needs and seeding a portfolio of bets to meet those needs. Don’t send your corporate venture capital (CVC) team off to Silicon Valley to just chase startups and write inconsequential “strategic learning” checks; integrate your CVC into your New to Big machine so that they can fund bets that actually are strategic and driving your OA portfolio. Don’t fear the startups that are coming your way; go on offense and beat them at their own game. There is no monopoly on this model.
Startups won the first round of disruption as the Fortune 500 outsourced growth and innovation to the Valley. We believe enterprises can win round two. Why? Because you have some not-so-secret weapons in the battle for growth: loyal customers, massive distribution channels, manufacturing capabilities, scaling systems, and the brand equity that startups and venture capitalists can only dream of. You can accelerate a customer adoption curve that startups could never handle. You are in a position to not only see and meet the future, but to make the future happen sooner.
Startup founders get much of the attention these days, and a handful of successes like Jeff Bezos from Amazon, Sara Blakely from Spanx, and Elon Musk of Tesla/SpaceX offer the dramatic narrative and singular personality-driven visions that fuel the media machine. It can be tempting to look at founders with a mix of disbelief and awe (perhaps mixed with a touch of defensiveness and valuation envy) and insist that they get to play by a different set of rules. And as a leader of a large, existing organization you aren’t a founder. It’s true.
You can, however, be a refounder.
Refounders are leaders who—despite not having created their companies from scratch—adopt the Day One mind-sets and model of founders. As we noted in chapter 2, Microsoft’s Satya Nadella is an excellent example of a refounder; when he took over the CEO role in 2014, he immediately began refocusing the entire enterprise on growth-centric endeavors.
“If you don’t jump on the new,” he proclaimed, “you don’t survive.”
Taking that philosophy to heart, Nadella challenged the company to see beyond its legacy products and began investing in new technologies like AI and Software as a Service (SaaS). He positioned Microsoft to grow into a cloud-computing giant by launching Azure, and purchased LinkedIn to plug Microsoft services into the company’s social graph, then acquired GitHub to reengage with the developer world as a partner, not an entangled customer.
Through it all, Nadella has emphasized the importance of a growth mind-set: long-term thinking, utilizing a test-and-learn approach, and obsessing over customer problems, needs, and outcomes. He’s also given the company permission to learn from their failures, most notably with the Windows phone. “If you are going to have a risk-taking culture, you can’t really look at every failure as a failure. You’ve got to be able to look at the failure as a learning opportunity,” he told Business Insider in 2017.2
The market has rewarded his bold tactics and visionary mind-set: After years of stagnation, Microsoft has regained its place on the top-five market cap list. The market now grants it a growth company multiple.
Taking a page out of Nadella’s book isn’t as daunting a task as it might seem. The Growth OS creates a New to Big machine inside of existing organizations. This book is your manual for how to configure and install it alongside your Big to Bigger operation. Together, these dual operating systems give you the power to discover and validate new ideas at the speed and cost of startups, then launch the validated ideas into new businesses at the scale of enterprises.
Installing the Growth OS is your first giant step toward activating the future. You’ll be igniting a cultural growth mind-set and upgrading your company for a prolific and permanent drive for growth. You’ll be showing your peers, shareholders, employees, and competitors that you live as an ambidextrous leader—you have the ability to operate and create; you can win at Big to Bigger and New to Big.
Big used to beat little; today, fast beats big. Fortunately, you’re now ready. You’re done envying Silicon Valley, and eager to turn the tables and make them envy you. You’re primed to go on offense and win big. It’s time.
And perhaps more important, we need you to succeed. Your partners, customers, and stakeholders need you to succeed. We hope, at the very least, our book has convinced you to take on the grand challenges of our time. Your leadership legacy will be in transforming the will and capability of your organization to imagine and contribute to an equitable, accessible, and sustainable future. If a startup has an innovative idea, they have to scrape and claw to make their way. But if you have the same idea, you can throw your resources and scale behind it to make change happen instantly, whether that is using less water in your supply chain, decreasing the cost of renewable energy, or increasing the accessibility of financial services products.
Now is the time to take action. We believe in you.
David, Christina, and the Bionic team