The Founder Effect

Three Pillars of Success in Founder-Led Companies

Lam, Lawrence

1. Edition February 2025
224 Pages, Softcover
Wiley & Sons Ltd

ISBN: 978-1-394-29371-1

John Wiley & Sons

Sample Chapter

Further versions

Explore a framework to build and invest in profitable companies that consistently outperform the rest

How do great organisations go from paper to profit? What are the secrets to sound, lucrative decision-making? And how can you analyse executive and company performance for smarter investing -- as a leader or a shareholder? In The Founder Effect: Three Pillars of Success in Founder-Led Companies, investment funds manager Lawrence Lam identifies the intangible elements that drive the success behind outstanding global companies.

Backed by behavioural psychology, case studies and examples from some of the world's most iconic brands, The Founder Effect shows you how to uncover a business's potential for profit. This handbook presents a compelling three-pillar framework, giving you the tools you need to evaluate track record, assess motivation, and go beyond marketing spin to uncover actual progress.

* Understand the magic formula that generates success within executive management teams

* Uncover how intelligent organisational design supports a company, from people to productivity

* Review leadership judgement and uncover cognitive biases that influence decision-making

* Discover what motivates an executive team, from psychological ownership to incentive structures

* Ensure that an organisation's leadership truly reflects its core values and culture

Perfect for investors, founders, executive management, board members and other business leaders, The Founder Effect is a can't-miss resource for measuring what takes a company from good to great.

'Lawrence Lam provides a clear framework for evaluating management teams by highlighting the traits that make great founders successful. The Founder Effect is a must-read for anyone looking to understand what sets top leadership apart.' -- Chip Wilson, Founder of Lululemon

About the Author xi

Introduction xiii

Part I: Judgement 1

1 Decision accuracy 11

2 Strategic allocation 29

3 Group cognitive biases 47

Part II: Alignment 73

4 Extrinsic motivators: Effective incentives 91

5 Intrinsic motivators: The intangible driver 105

Part III: Influence 123

6 Internal influence: Leveraging the workforce 133

7 External influence: Attracting a radical base 159

Epilogue: If you know, you know 181

Acknowledgements 185

References 187

Index 197

'The Founder Effect breaks away from conventional business theory, offering a deep dive into the out-of-the-box entrepreneurial mindset. It explores the innovative strategies that have been key to Chemist Warehouse's enduring success and growth.' -- Jack Gance, Chairman and Co-founder, Chemist Warehouse

'The Founder Effect isn't just another business book. It's a powerhouse of insight that unveils the secrets to how we operate -- capturing the essence of a founder's mindset and how we have forged success and growth at Flight Centre.' -- Graham Turner, Global Managing Director, CEO, and Co-Founder, Flight Centre Travel Group

'Providing essential insights for evaluating executive management teams, Lawrence Lam's The Founder Effect is an indispensable resource for achieving long-term and sustainable success.' -- Robert Millner AO, Chairman and Non-Executive Director, Soul Patts

'The Founder Effect offers crucial insights for executives and management teams striving for long-term success. Lawrence Lam provides a clear framework for evaluating leadership and driving sustainable growth, which is key for any forward-thinking organisation.' -- Chris Davies, CEO, Telstra Superannuation

LAWRENCE LAM is the Managing Director and Founder of Lumenary Investment Management, a funds management firm. He specialises in strategic investments in global, founder-led companies.