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The Founder Mentality Versus the Manager Mentality

The concept of left-to-right and right-to-left thinking plays a role in determining the direction that your company is headed. I have recently seen a few examples of where left-to-right thinking will fail a business but before going into that lets back up and explain these two phrases.

Left-to-right thinking is based on history. It is logical but not creative. Left-to-right thinking is what scientists use to predict the future; X happened in the past so in the future Y will happen. Scientist often use the past to explain why something occurred, when they can. Even after the event has occurred, scientists get things wrong. I learned to fly in the early 1990’s. I had to pass a written test and I had to know how an airplane stayed in the air. It was science and I learned that it had to do with Bernoulli’s Principle that with an airfoil, the air would flow faster over the top of the wing and slower below the wing, creating low pressure above the wing resulting in lift, sucking the airplane up. The Bernoulli’s Principle sounded intelligent and certainly explained why a shower curtain comes in, and that was all I needed to know, until it was mostly debunked. While it may offer some minor assistance with lift, it is now a more commonly held belief that the air pressure under the wing pushes the plane up. A plane that has a wing that does not achieve an angle of attack won’t fly regardless of the airfoil design. Left-to-right thinking is not what the Wright Brothers used; they did not look to past successful flights to create the future.

The first known bicycles were used in the early 1800’s but how do they work? Push a bicycle with no one on it and it tends to stay upright while it is moving but doesn’t when it slows down or when standing still. So how does a bike stay up, and what is the science behind them? The answer is that scientist still don’t necessarily know. A Fast Company article by Charlie Sorrel on January 8, 2016 is entitled “The Bicycle is Still a Scientific Mystery: Here’s Why". This is just one of many articles, forums, blogs and news reports lamenting that we really still don’t understand why a bicycle works. (Don’t worry however, there is plenty of government money being spent on research to solve this problem).

Because left-to-right thinking is scientific in nature and based on “logic” it has been adopted by business leaders. Imagine the logic of a Board Room for a large hotel chain contemplating what to do in the mid 1980’s for their properties in Paris. Occupancies were very low and as a result, hotels had consecutively lowered their prices. Based on left-to-right thinking someone should have suggested they lower their prices again. What happened in Paris defies logic because one of the hotels dramatically increased their prices, and their occupancy went up. Ultimately the whole market increased prices and the occupancy went up. When hotel rooms were 600 dollars a night in Paris in the late 80’s they were close to full occupancy, a couple of years earlier at 150 dollars a night, they were empty.

What about the decision to put water in a bottle and sell it? I have a reluctance to buy coffee when I am out. I rationalise that the coffee I make at home is better, for a fraction of the cost. If I am interstate, I do buy coffees and don’t think twice about it. What is logical about paying $4.50 for a cup of coffee? Or buying bottled water? Left-to-right thinking would not have allowed these concepts to be launched and hugely successful. You would not fire your CEO for logical thinking, but you would fire a CEO for illogical thinking which could lead to great success.

The decision to raise prices in Paris, to bottle water and to sell ridiculously priced cups of coffee wasn’t based on the past. It was right-to-left thinking. If all Bill Gates considered was the past, he would not have said: “I worry about two guys in a garage”, instead he would have said I worry about IBM. Disruptive industries like Uber and AirBnb are not trying to replicate the past. Right-to-left thinking is creative and is based on the idea, that I am here and want to get to a point in the future so how do I do that.

Business is measured in dollars and they are economic entities, perhaps. The person who is credited with founding the concept of economics is Adam Smith who wrote the book “The Wealth of Nations” in 1776. He is lesser known for his work which he wrote seventeen years earlier called “The Theory of Moral Sentiment”, which is a book on how humans try to rationalise reason with passion. Reason is based on left-to-right thinking while passion is based on right-to-left thinking and the in-explainable $3.00 bottled water sales can be explained by the founder of economics: there is a higher degree of disorder when you involve a person.

I have been averaging at least a day a week working on strategy for businesses for some time now. Recently a theme has arisen that relates to a Corporate held Emotional Quotient (ChEQ) and to left-to-right thinking. The ChEQ portion is having the self-awareness to know what you are truly lacking as a company, and then trying to address that. It takes brutal collective self-awareness and then bravery to say we do this badly. The thinking therefore has to change. If you are here because of what you have done in the past, and you want to go there, then is the way that you have gotten to here, going to work for where you want to go? Creatively speaking, what do you need to do differently to go forward? This is right-to-left thinking.

It is common to understand that things break as they grow. Businesses that double and triple in revenues over a few short years, break in areas. Many of the firms that I have worked with in the past few months are doubling and tripling their revenues. Production may not keep up with sales. Culture may not be stable. Many small firms start with the founders working very hard. When the number of employees grow, there are more communication, space, equipment and capital problems. At one point you will need to address these problems, perhaps with a strategic plan. It is very common at this point to hear that ‘I miss the simpler days’, and to even hear we ‘don’t want to grow’. Many businesses say that there are growing tensions with the staff. The root cause is often the leadership equation. What worked in the past won’t work going forward. It may be that the organisational structure needs to change because the hierarchy is too flat. It may be that the founder style of leadership and the culture that it has nurtured has to change. It is often the case that to grow further the business has to hire an operational manager, which means ceding some of the control.

Sometimes when you want to move forward you cannot just look to the past using left-to-right logic. At times you will have to use a ChEQ to objectively assess what style of leadership is needed. This relates directly the M in my MORTARS internal analysis – is the management the right management. You may have to use right-to-left thinking, to creatively determine how you will move forward. The pull of the future is greater than the push of the past.

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