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Founder-Led Firms Do Better



(p. A19) A study out earlier this year from Bain & Company, where we work, shows that over the past 15 years founder-led companies delivered shareholder returns that are three times higher than those of other S&P 500 companies.


. . .


Great founders imbue their companies with three measurable traits that make up what we dubbed "the founder's mentality."

The first is insurgency: The founding team declares war on its industry on behalf of underserved customers.


. . .


The second trait is an obsession with how customers are treated--an attention to detail that borders on compulsive.


. . .


Third, these companies are steeped in an owner's mind-set. Too often in business, the founder's vision becomes distorted.


Bain's research found that the best companies--the top 20% of performers, founder-led or not--exhibit the three traits we've described four or five times as often as the bottom performers. The bad news: Only about 7% of companies, founder-led or not, manage to maintain these traits as they grow to scale. Yet those that do create more than 50% of the net value in the stock market in any given year.



For the full commentary, see:

CHRIS ZOOK and JAMES ALLEN. The Company Founder's Special Sauce; No one leads a firm as effectively as the person who started it." The Wall Street Journal (Mon., Dec. 19, 2016): A19.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Dec. 18, 2016.)


The Bain research mentioned above, is:

Chris, Zook. "Founder-Led Companies Outperform the Rest -- Here's Why." Harvard Business Review Digital Articles (March 24, 2016): 2-5.


The passages quoted above are related to the authors' book:

Zook, Chris, and James Allen. The Founder's Mentality: How to Overcome the Predictable Crises of Growth. Boston, MA: Harvard Business Review Press Books, 2016.






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