McDonalds & The Founder’s Mentality

The Wall Street Journal: “A study out earlier this year from Bain & Company … 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. Such performance can sometimes continue long after a founder leaves … 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.” McDonalds founder Ray Kroc, in The Founder, “a new film starring Michael Keaton … announces in the film that the McDonald brothers’ fast-service approach is akin to revolution … The second trait is an obsession with how customers are treated—an attention to detail that borders on compulsive. In his autobiography, Kroc discusses not only burger patties, but even how high they could be stacked and the amount of wax on the paper slips between them.”

“Third, these companies are steeped in an owner’s mind-set … Kroc was able to create an army of mini-founders by perfecting the franchise model … Bain’s research found that the best companies—the top 20% of performers, founder-led or not—exhibit the three traits … 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.”

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