The Founder's Mentality: How to Overcome the Predictable Crises of Growth

Author: Chris Zook & James Allen

One of the nice things about US companies is that they engage with a lot of management consultants who end up having access to all kinds of financial information that they can mine for nuggets of wisdom. Chris Zook and James Allen are two longtime partners in Bain and Company who have taken their learnings from companies all across the globe and distilled it into this little book on “Founders Mentality”. 

Not surprisingly, most companies have a tendency to grow large and inefficient. The very thing that is designed to help them scale, ends up building massive organizational silos where doing anything that ultimately provides value to the customer becomes bureaucratic and cumbersome. In fact they report how a survey to 325 executives of large companies claimed their internal groups grew four times as often as external ones. 

They go on to state what most people in large companies know all too well. “The curse of the matrix even causes many companies to lose access to their own resources. Why? Resources in matrix organizations get trapped in departmental, silos, often defended by ballooning, sentient stuff that I’ve become the ultimate expert at the internal game. This slows down decision making and makes it impossible to concentrate resources. Big companies that have lost the founders. Mentality tend to spread resources around evenly, an understandable instinct, but one that leads inevitably to mediocrity.“

The book really delves into what it takes to have a “founders mentality” and how to apply it to large companies. The authors are very fond of the word insurgent. They goes so far as to define a term called scale insurgency, and guess what they define it as “companies that have stayed true to their insurgency for a long time…“ two sentences later, they confess  “all of the advice in this book is designed to help companies, achieve, scale, insurgency“

If you need reassurance that you are not alone in a bureaucratic large company, then this is the book for you. There are some good quotes that I noted down. Here are a couple”

• “more companies die from indigestion than starvation” — David Packard
• Create a council of franchise players – employees that have a disproportionate impact on the performance of the company.

Read this book to evaluate where your company stands in terms of operating with the insurgency of a fouder.

Time Shelter: A Novel

Author: Georgi Gospodinov

I try to read all Booker Prize winners and am happy to report that this book made it to the top in 2023. This is an unusual book with a very unique and interesting premise. Gospodinov conjures up a world in which an enterprising sould is creating a refuge for people who are losing their memories. Through this setting he comes up with a lot of interesting observations that are thought provoking and amusing. I list some of them here as a sample.

While describing a conversation between two Bulgarians he says

for a Bulgarian, complaining is like talking about the weather in England, you can never go wrong

In comparing major European cities and their appeal to the different age groups he says

Paris, Berlin, and Amsterdam for youth… Then comes the maturity of Vienna, or Brussels.… OK, for those who still do not wish to grow old – Rome, Barcelona, Madrid… To the late youth, I would also add New York, yes, I count it as a European city that ended up across the ocean due to a certain chain of events.

He borrows from Doors, Beatles, and even modifies the famous Tolstoyan quote as follows. 

Happens stories are all alike, every unhappened story isn’t happened in its own way.

There are tons of pithy observations like 

Anthropocene, the first era named for man, will likely turn out to be the last for him.

Another wonderful observation. 

Happiness doesn’t make it into the history textbooks (there only battles, pogroms, betrayals and bloody murders of some archduke make the cut).

Gospodinov acknowledges that we don’t live our lives in isolation. Our experiences are the result of our interactions with the many different people we share our lives with. Some are fleeting moments that we barely pay attention to, while others are true experiences that we cherish or hate,  or feel some thing in between. In summary, he says

My whole life is sewn together from other peoples lives

Finally, he drops this on us

In the end, writing arises when man realizes that memory is not enough

It’s a brilliant book that makes you appreciate and reflect on a lot of things happening around you that you might just not have had the insight to stop and look at in they way the author has done for us.

India Is Broken: A People Betrayed, Independence to Today

Author: Ashoka Mody

I love History and Economics and this book has both. It dissects the economic performance of every political regime in post Independence India. No leader is spared the critical performance review except for maybe PV Narasimha Rao and  Lal Bahadur Shastri  for whom it is clear that the author has a soft spot. Mody makes it a point to note that he was 10 years old and wept when he heard that Lal Bahadur Shastri had died. 

The book opens with India’s Independence and Nehru becoming the first Prime Minister. Right from the start he notes that Gandhiji stated that  “Jawahar is a thinker, said that (Patel) a doer.” From there he points out the many flaws of Nehru’s Five Year plans and focus on large industry. The author’s contention throughout the book is that these large industries don’t employ enough people and what India really has is an abundance of underemployed masses.  Furthermore, he points out that Nehru really revered scientists and loved to attend functions that celebrated scientific accomplishments. He ignored the uneducated masses and didn’t have the desire or ability to drive programs to educate the bulk of India’s population. 

On Nehru’s death, the Congress Party nominated Lal Bahadur Shastri as the Prime Minister, who appointed Indira Gandhi as the Minister for Information and Broadcasting. During his two year tenure, Pakistan attacked India to lay claim to half the territory in Kutch. Shastri was a self-proclaimed secularist and despite the opportunity present, did not mix religion with politics. He died while visiting Russia and there is speculation to the cause of his death, but there is no concrete evidence of foul play. He is known for his honesty and humility and it is India’s loss that he was PM for only 2 years. 

After Shastri’s death, Indira Gandhi was able to out-maneuver  Morarji Desai to win the Congress Party nomination for the PM role. She presided over a war with China and a war with Pakistan that resulted in granting independence to Bangladesh.  In the mid 70’s there were lots of protests and separatist movements all across India and Indira declared a State of Emergency that curtailed basic civil liberties and censored the Press. From an economic standpoint, Mody writes that she was a lightweight who simply continued in the the ineffective path of Five Year plans that Nehru had started.  One of her major shortfalls was coddling her son Sanjay Gandhi, supporting his ill-advised ventures and bailing him out of his numerous follies. One of the most significant examples is Sanjay’s attempt at creating an indigenous car company, Maruti. Her government made numerous handouts to Maruti and the entire government became infested with corruption. I don’t know if this was the cause, but co-incidentally there was widespread corruption all over India during this time. The trauma of Emergency resulted in the Congress Party losing the election, but the resulting coalition of the Janata party was too fragile to last more than a couple of years. 

Indira got re-elected to office in 1980, but shortly thereafter Sanjay Gandhi died while trying some aerobatic stunts over Delhi.  This had a huge effect on Indira and she persuaded Rajiv Gandhi, her other son, to enter the political arena. Around this time, the Sikh Separatist movement headed by Bhindranwale were demanding a separate state for the Sikhs and had started stockpiling weapons at the Golden Temple in Amritsar. Indira authorized operation Blue Star and the Indian Army entered the Golden Temple and removed Bhindranwale, his supporters and their weapons. Some holy parts of the temple were damaged and many innocent worshippers lost their lives. Indira became a target for Sikh terrorists and she was assassinated by one of her Sikh body guards on October 31, 1984. 

Rajiv Gandhi succeeded Indira as Prime Minister and there as general violence and backlash at the Sikh community. He had some heavyweights in his cabinet including Finance Minister Pranab Mukherjee, PV Narasimha Rao was in charge of defence, VP Singh was a Finance Minister first and then given the Ministry of Defence. However, he frequently shuffled the Cabinet ministers, and the press labeled it as the “Wheel of Confusion”.  The Sri Lankan Civil War was gathering steam with the Liberation Tigers of Tamil Eelam (LTTE) demanding an independent Tamil State. Rajiv signed the Indo-Sri Lanka Accord in 1987, installing the Indian Peace Keeping Force (IPKF) and requiring the LTTE to give up their arms to the IPKF.  Rajiv was assassinated by a suicide bomber from the LTTE while campaigning in Sriperumbudur, a village near Chennai.

P.V. Narasimha Rao is one of the few people who gets a virus. Maybe it’s because he appointed Manmohan Singh, an oxford trained economist to be his Finance Minister. Manmohan Singh devalued the rupee and made policy changes that significantly reduced the budget deficit. This was the first of many steps in the path of economic liberalization that laid the seeds for manufacturing growth. During this time, the stock market boomed, but it was not all because of prudent economic policy. Harshad Mehra  was a big part of the boom in the stock market and he turned out to be fraudster.

Finally, we get to all the mistakes of the Modi government. In keeping with the economic theme, the author is mainly concerned with the impacts of Modi’s economic policies like the demonetization of large Rupee notes, the Farmers Bill and several others on which the dust has barely settled.  He talks about the contrast of agriculture in India, versus the rest of the world. In the second half of the 20th century, and countries like South Korea and China, the number of workers employed in agriculture, drastically reduced, and the number of workers in industry commensurately increased however, in India the number of people employed by agriculture, state flat or even went up in the 1990s. This turned out to be really harsh, and because the plot size is decreased, the weather conditions worsened, their output was below subsistence level and many of the farmers committed suicide.