A new movie is coming about the life of McDonald’s Founder, Ray Kroc who created late in life not only a major company but a whole new type of business.
The consulting firm Bain & Company has a study and a new book called The Founder’s Mentality. In their study, Bain points out that founder-led companies delivered three time higher returns to shareholders than other large public firms.
Bain cites three main traits that they believe help founder-led firms to perform so well. In a Wall Street Journal article they relate their work to McDonalds and Ray Kroc. Having worked in my formative years for Donn Corporations’s founder, Don Brown, I wanted to add some thoughts to this important topic.
The three traits that Bain describe that distinguish founder-led firms are:
1. Insurgency where the firm declares war on its industry. For McDonald’s that involved a whole new way of delivering food with their fast service. At Donn, we had a sense of urgency in everything we did and a disregard for traditional corporate hierarchy or functions like Human Resources.
2. Obsession with how customers are treated. At McDonalds this occurred with watching every detail from the size of the burgers to what potatoes were used for their fries. At Donn we were the first to create customer incentive trips for our customers plus unlimited expense accounts to entertain them including a yacht and condo in the Bahamas! I would add here that I think the best founder-led firms also treat their own employees in special ways as well. For a small firm, Donn had annual employee outings, turkeys at Thanksgiving and Christmas gifts for our employee children in every world-wide location.
3. Companies are steeped in the owner’s mindset. For Ray Kroc this meant setting up a next generation of founders in his unique franchise system. For Donn Corporation, Don Brown’s vision and values formed its culture and leadership style that caused the company to grew rapidly and prosper. Much of the culture was based on respect, trust and faith in each other. Thirty years after Donn was sold to USG Corporation over 125 former employees signed up for a potential reunion.
In my book, The Business Zoo, on Amazon the ending chapter is on Leadership and Culture. Ray Kroc built that at McDonalds as did Donn’s founder, Don Brown.
I wish all my readers of this blog or my book a wonderful Holiday Season and great 2017!
bradszootales 
I agree with your observations whole-heartedly. My founder-led organization has the same urgency that Donn Products had to help remove customer or employee roadblocks.
— When our customer has an outage, my support group can engage whatever resources we need on a crisis phone conference within minutes.
— The same thoughtful treatment applies to employees. Our management takes care of us with disability benefits that cover serious health issues or happily extended paternity leaves. I have seen unbelievable long-term disability for employees with (e.g.) cancer or cerebral hemorrhages; my company keeps us, our job is always waiting for us.
Like the 125 employees 30 years later for the Donn reunion, I know the visceral loyalty and camaraderie that is engendered within a founder-led organization.
Your thought-provoking post and perspective reminds me of how grateful I am for my company’s supportive culture. Thanks!