What kind of management style is needed in the age of AI?

As AI increasingly takes over routine tasks and basic information processing, simply using the same AI tools as competitors is no longer enough to differentiate a company. Competitive advantage is increasingly rooted in what makes each organization unique: its philosophy, culture, and accumulated tacit knowledge.

For business leaders, including CIOs, the central question is shifting from “How can AI improve efficiency?” to “How can we foster continuous growth for both our people and our organizations in the AI era?”

Two influential perspectives offer valuable insights into this challenge.

The first is Founder Mode, an essay published in September 2024 by Paul Graham, co-founder of Y Combinator, the influential Silicon Valley startup accelerator. The second is The Founder’s Mentality, a management framework developed by Bain & Company through its extensive research into the drivers of sustained corporate growth and the crises that can undermine it.

Both address a fundamental challenge: as organizations expand, how can they preserve the sense of ownership, entrepreneurial energy, and intuitive decision-making that defined their early success?

In this article, I explore how Founder Mode can serve as a practical leadership approach for sustaining the principles of the Founder’s Mentality—and why this combination may become increasingly important for organizational growth in the AI era.

Founder Mode: Rethinking the conventional wisdom of delegation

As an organization grows, leaders should delegate authority to their subordinates. This is conventional management wisdom, taught in both MBA programs and corporate training courses. Graham challenged this conventional wisdom in an essay inspired by a talk given by Airbnb CEO Brian Chesky.

In his talk, Chesky said that “the conventional wisdom about how to run large companies is mistaken.” After taking the conventional advice to delegate authority, Chesky saw meetings proliferate, bureaucracy take hold, and internal divisions intensify. Employees increasingly prioritized their own objectives over the company’s broader goals, while progress on critical initiatives slowed to a crawl. In response, he undertook a sweeping organizational overhaul: he made every initiative visible, dismantled the divisional structure and reorganized the company by function, and shifted to concentrated decision-making by the senior leadership team. In doing so, he revitalized the company.

From cases like this, Graham identified a style of management distinct from the delegation-centered approach and named it “Founder Mode.” It is the style practiced by Steve Jobs at Apple, in which the top executive makes decisions while staying directly connected to every level of the organization.

One example of Founder Mode in practice is the “skip-level one-on-one,” in which leaders engage directly with employees beyond their immediate reporting line and speak directly with employees two or more levels below them. This gives leaders firsthand insight into day-to-day operations and makes decision-making more transparent. Retreats where the CEO personally leads discussions with the management team are another example.

That said, some critics argue that Founder Mode can easily turn into mere meddling. Graham nonetheless maintains that, even taking that risk into account, it is better to adopt Founder Mode. The distinction between Founder Mode and micromanagement lies in how leaders exercise their involvement. Effective Founder Mode combines a clear strategic vision with direct engagement across organizational levels, while preserving employees’ ability to exercise judgment and take ownership of their work. This ability to communicate a clear vision and strategic rationale is what distinguishes Founder Mode from micromanagement.

The Founder’s Mentality: 3 principles for sustained growth

There is a book that analyzed the themes addressed in Founder Mode before Graham’s essay appeared and distilled them into a prescription: The Founder’s Mentality, published in 2016 by Chris Zook and James Allen of Bain & Company. It is a framework that organizes the traits shared by leaders and organizations that achieve sustained growth into guiding principles, and it rests on the following three pillars.

1. Insurgency

Insurgency is a mindset that drives an organization to challenge industry conventions and established frameworks in pursuit of creating new value. It involves identifying unmet customer needs, questioning traditional ways of doing things, and continuously seeking better solutions. At its core lies a clear sense of mission: “Why do we exist?”

2. Frontline obsession

Frontline obsession is a commitment to placing the highest priority on employees who interact directly with customers and incorporating their insights and feedback into management decisions. It involves creating an environment where frontline employees are empowered to think independently, make decisions, and take action. By accumulating small improvements and learning through continuous experimentation in their daily work, the organization consistently enhances the value it delivers to customers.

3. Owner’s mindset

Owner’s mindset is an attitude of taking personal ownership of the entire company, thinking and acting proactively as a founder would. It emphasizes making effective use of management resources, including time and capital, while prioritizing swift decision-making and execution. It also means cutting through unnecessary procedures and organizational constraints to focus on what truly matters and taking responsibility for delivering results.

Based on these definitions, I have developed my own interpretation of the three pillars and incorporated them into my approach to building organizations.

At the heart of Insurgency is the belief that a company should see itself as a movement rather than merely a business—one that fights on behalf of customers whose needs have long been overlooked. This distinctive sense of identity is precisely what attracts top talent and strengthens employee engagement.

Frontline Obsession means treating the frontline, where employees interact directly with customers, as the most important part of the organization. In 1999, just five years after founding Amazon, Jeff Bezos was already describing the essence of the company as a “customer obsession.” This was long before the concept of customer experience (CX) management became widespread, making his foresight particularly remarkable.

This deep commitment to the business is also reflected in the standards of quality an organization upholds. When founders personally set exceptionally high standards and expect employees to meet those same standards, there is little room for bureaucracy to take hold. Steve Jobs, who insisted that every Apple product meet his exacting standards, is perhaps the clearest example.

When this sense of personal ownership demonstrated by founders spreads throughout the workforce, Owner’s Mindset becomes deeply embedded in the organization, fostering a culture in which people take responsibility and see things through to completion.

According to Bain & Company’s research, companies led by their founders achieve markedly better results than other companies, and the Founder’s Mentality is strongly correlated with performance and competitiveness.

The three pillars are, in effect, the core principles that enable startups to scale rapidly.

The three pillars of the Founder’s Mentality.

Masaya Mori

3 crises that threaten growing companies

Yet as an organization grows, these three pillars weaken. Headcount and departments increase, rules and procedures pile up, and managers become consumed by administrative work. Zook identifies three crises that growing companies face.

1. Overload.

   The complexity that comes with scale robs employees of freedom and agility, stifles creativity, and drains the organization of momentum.

2. Stall-out.

   Growth slows as operations become more complex and the sense of mission becomes diluted, and this stage arrives suddenly and without warning. A stall-out often leaves leadership teams struggling to understand why growth has slowed and how to regain momentum. There is also a growing sense of urgency as younger, faster competitors gain ground.

3. Free fall.

   Growth in the core market comes to a complete halt, and the business model that worked until yesterday no longer works. The leadership team struggles to identify the strategic levers needed to reverse the decline; performance deteriorates rapidly, and the company reaches a point where a turnaround is extremely difficult.

Reviving the Founder’s Mentality to overcome organizational crises

Founder Mode can provide a practical leadership approach to reinforcing the three pillars of the Founder’s Mentality. By staying directly connected to employees and customers, communicating the company’s mission, and empowering individuals to act with ownership, leaders can help sustain an entrepreneurial culture as the organization grows. Founders, and leaders who know the company’s early days, engage directly with employees and instill insurgency, frontline obsession, and an owner’s mindset again and again.

The leadership of Lee Kun-hee, Samsung’s former chairman, is a textbook example.

Even after transforming the company into a maker of high-quality products and raising its profile in global markets, he repeatedly told employees directly, “Our company is now facing the greatest crisis in its history.” This unrelenting sense of crisis, sometimes described as a “perpetual crisis,” was the driving force that sustained the company’s founder’s mentality and led it to become the world’s largest electronics company.

Another key is not to treat Founder Mode as something reserved for founders alone.

Fidji Simo, CEO of the grocery delivery service Instacart, has drawn on her experience at Meta, saying, “At Meta, Mark [Zuckerberg] taught us not only how to be good executives, but how to take big risks and reap big rewards. That is Founder Mode.” When founders share their entrepreneurial spirit with employees and place high value on the challenge of building a business from scratch, they are, in effect, developing the next generation of leaders who will carry the founding spirit forward.

AI may ultimately make Founder Mode more scalable than at any other point in history. As AI takes over information synthesis and routine administrative tasks, it becomes easier for executives to access frontline insights directly, with less time and effort. Executives and the front line can connect directly, without information being filtered or distorted as it moves through layers of management. Technology is making Founder Mode easier to practice than ever before.

Conclusion: Building an organization that continues to evolve

Graham’s essay raises fundamental questions for companies at every stage of growth, whether they are expanding rapidly or struggling to maintain momentum. The Founder’s Mentality provides a framework for understanding these challenges and translating entrepreneurial principles into organizational action.

During my 14 years at Rakuten Group, I witnessed firsthand the company’s rapid expansion. As an R&D leader, I helped navigate a period in which its engineering organization, including global operations, grew twentyfold. That experience reinforced my belief that sustained growth requires constant reinvention and a willingness to challenge complacency—principles that resonate strongly with both Founder Mode and the Founder’s Mentality.

As organizations scale, delegation becomes more widespread, processes grow more complex, and the founding spirit risks fading into little more than a set of formal statements. These challenges can emerge far sooner than leaders anticipate.

How can leaders keep the company’s founding philosophy alive, empower employees to take initiative, and nurture the next generation of leaders? I believe the answer lies in maintaining a direct connection with people across the organization, even as its size and complexity increase.

This approach becomes even more important in the AI era. As AI takes on more routine responsibilities and similar technological capabilities become widely accessible, human judgment and organizational values will play an increasingly important role in differentiation. In this environment, the founding philosophy of an organization can serve as a distinctive source of direction, helping leaders determine which opportunities to pursue, which trade-offs to make, and what kind of value to create.