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There's an essential, intangible "something" in start-ups--an energy, a soul. It inspires enthusiasm and fosters a sense of deep connection and mutual purpose. While this spirit persists, engagement is high and businesses keep their edge. But all too often, companies lose their souls as they mature. Firms add new systems and structures and bring in experienced professionals--and in the process somehow crush their original energizing spirit. In research into more than a dozen fast-growth ventures and 200-plus interviews with founders and executives, the author has discovered how firms can overcome this problem. His work shows that there are three crucial dimensions to a start-up's soul: business intent, or a loftier reason for being; unusually close customer connections; and an employee experience characterized by autonomy and creativity--by "voice" and "choice." All three provide meaning to stakeholders. Drawing on the experiences of Netflix, Warby Parker, Study Sapuri, and others, this article describes how sizable companies can still protect and nurture the three elements. Doing that is the secret to staying great as you grow.

Barber Cardiosystems, based in Melbourne, Australia, designs and manufactures therapeutic devices used for treatment of coronary conditions. Over four decades, it has grown to be among the top 200 medical device companies in the world. It competes against much larger companies through a continuous effort to control costs and increase productivity. It does so by aligning operational and human resource practices, particularly employee incentives, with its strategy. Concerns arise in the face of increased competition about whether the company can continue to reduce costs and maintain its margins while keeping both its generous bonus scheme and commitment to guaranteed employment. The company's executive team must decide how to respond. This case is suitable for use in undergraduate, MBA, and executive courses in organizational behavior, leadership, and strategic management. It is especially useful in a module on strategic alignment or organizational design.

Most leaders view employee freedoms and operational controls as antagonists in a tug-of-war. They tend to focus on regulating workers' behavior, often putting a damper on commitment, innovation, and performance without realizing it. But freedom and control aren't zero-sum, argues the author. By giving people a clear sense of their organization's purpose, priorities, and principles--that is, by providing freedom within a galvanizing framework--leaders can equip employees to make on-the-ground decisions that are in the company's best interests. Gulati uses businesses as diverse as Netflix, Alaska Airlines, and Warby Parker to show how freedom can function in different settings. A coherent framework helps employees develop a deeper understanding of the business, which can lead to improved engagement, creativity, efficiency, and customer service.

This case documents the ongoing efforts by Alaska Airlines to enhance its efforts to become more customer centric by empowering its employees using a service framework. It explores how the airline starts with a completely hands-off approach to empowerment in which employees are encouraged to do whatever it takes to please customers. An economic downturn leads them to swing the pendulum the other way and develop a rules-based framework with strict guidelines. Ultimately, they settle on an intermediate model in which employees are given "freedom within a framework." This forces them to try and shift from a rules-based to a principles-based culture. The case explores not only what they did but also how the framework was rolled out. All this seems to be working until they acquire Virgin America in 2016. Virgin too espouses customer centricity and front-line autonomy but does so in a different way. The dilemma now is blend the two cultures that are both trying to achieve similar goals but do so quite differently.

In early 2006, BlackRock, Inc. is considering acquiring Merrill Lynch's asset management business. The asset management industry was in a state of transition. In the prior year, more than 130 mergers and acquisitions had taken place. The proposed deal between BlackRock and Merrill Lynch would change BlackRock from a chiefly U.S.-based fixed income asset manager for institutional clients, to a firm with a global footprint and a strong equities and retail business. Was this the right thing to do to grow BlackRock? Was the timing right? Was the price right?

By the end of 2015, BlackRock had succeeded beyond any of the early dreams of its founders. The firm remained the world's largest asset manager, with more than $4.6 trillion under management, and other financial services companies used BlackRock's Aladdin platform to monitor an additional $12.9 trillion of assets. With its success, the firm had become far more complex. The scale and scope of BlackRock were helpful to clients when the parts of the company worked together, but that very same scale and scope made working together harder. BlackRock's leadership took stock of the investment landscape in early 2016 and what the firm would need to do in the future to continue to grow.

On June 11, 2009, BlackRock, Inc., the world's fourth-largest asset manager announced it was acquiring Barclays Global Investors (BGI) for $13.5 billion in stock and cash. The deal would more than double BlackRock's assets under management (AUM), making it the world's largest asset manager. There was more than just a significant difference in investment philosophy that separated the two firms. There were also significant cultural differences between New York-based BlackRock and San Francisco-based BGI. There was doubt internally at BlackRock and externally (i.e., analysts) whether it was the right move for BlackRock, but the firm's co-founder and CEO Larry Fink was undeterred.

As the case opens in 1999, several key leaders at BlackRock, Inc.- then a relatively small asset management firm -- are trying to convince CEO Larry Fink and others that the firm should begin to offer Aladdin -- its proprietary analytics and trading platform -- to other asset managers. While some members of the senior team saw "selling our systems" as an opportunity, others likened it to "selling weapons to the enemy" or "giving away the crown jewels." What should Fink do? The case provides an overview of the asset management industry, the beginnings of BlackRock, and details around the Aladdin platform. This case includes videos.

This (D) case is a supplement to HBS case no. 717-404 "BlackRock (A): Selling the Systems?"

As the case opens in 1999, several key leaders at BlackRock, Inc.- then a relatively small asset management firm -- are trying to convince CEO Larry Fink and others that the firm should begin to offer Aladdin -- its proprietary analytics and trading platform -- to other asset managers. While some members of the senior team saw "selling our systems" as an opportunity, others likened it to "selling weapons to the enemy" or "giving away the crown jewels." What should Fink do? The case provides an overview of the asset management industry, the beginnings of BlackRock, and details around the Aladdin platform.

This (C) case is a supplement to HBS case no. 717-404 "BlackRock (A): Selling the Systems?"

This B case is a supplement to HBS case no. 717-404 "BlackRock (A): Selling the Systems?"

Why do so many promising start-ups go off the rails? Often they have trouble scaling. Founders may resist imposing discipline for fear of losing agility and control--but the price may be chaotic operations and unpredictable performance. Drawing on extensive case studies and 75 years of research, the authors outline four activities that can help companies handle greater complexity as they seek new avenues for growth. Firms should: (1) Hire specialists in functions such as sales, HR, marketing, R&D, and manufacturing. This lets them tackle work more efficiently and catalyzes future growth by creating slack in the rest of the organization. (2) Add management structure. A few people at the top can't effectively supervise everyone's increasingly specialized daily work--and it's hard for employees to stay focused and engaged without guidance and processes. (3) Establish a framework of plans and goals. Otherwise, improvisation may amount to aimless riffing. (4) Sustain the culture. Articulate the founding values in mission statements and job descriptions, and hire and reward for cultural fit. Between the extremes of ad hoc and prescriptive organizing lies a useful middle ground--and leaders who can find it gain an important edge on their rivals.

It is January 2014 and Rahul Sharma, cofounder of Micromax Informatics (Micromax), the largest Indian mobile handset company, is preparing for an emergency conference call with his private equity investors. In the last six years, Micromax had grown its annual product revenues from $54M to over $1B. Unfortunately, it was difficult for the founding team to keep up with Micromax's rapid growth, triggering a series of missteps in 2010 that brought the company close to catastrophe. In response, investors had convinced Sharma and his cofounders to hire their first outside CEO, Deepak Mehrotra, and several senior professionals. With the founders working alongside the new "professionals," frequent overlaps and sometimes run-ins occurred. Now, both Mehrotra and the head of their smartphone division had resigned. Sharma evaluates their options: Would the founders need to reconsider their involvement in the company they created? Or was there still a middle ground where both founders and professionals could coexist in the business?

Indus Towers, the world's largest telecom tower company, is a joint venture between three telecom rivals in India. These rivals-Bharti Airtel, Vodafone India, and Idea Cellular-combined their telecom towers to provide "shared telecom infrastructure" to wireless telecom operators on a nondiscriminatory basis. The CEO has transformed Indus from a struggling startup with a monopolistic mindset into a customer-centric organization. He now wants to grow Indus. To achieve this, however, he needs to reconcile conflicting objectives among Indus's shareholders. All three shareholders are also his customers; often these dual roles engender different perspectives and lead to different requirements. The CEO needs to determine how to convince the board to take a decision that keeps Indus's best interests in mind while balancing the operators' interests.

In March 2011 Japan's Fukushima Daiichi nuclear power plant was devastated by three reactor explosions and three core meltdowns in the days following a 9.0 earthquake and a tsunami that produced waves as high as 17 meters. The world is familiar with Daiichi's fate; less well known is the crisis at its sister plant, Daini, about 10 kilometers to the south. As a result of the storm, three of Daini's four reactors lacked sufficient power to achieve cooldown. To prevent the disaster experienced up north, the site superintendent, Naohiro Masuda, and his team had to connect them to the plant's surviving power sources. In a volatile environment, Masuda and Daini's hundreds of employees responded to each unexpected event in turn. Luck played a part, but so did smart leadership and sensemaking. Until the last reactor went into cold shutdown, Masuda and his team took nothing for granted. With each new problem they encountered, they recalibrated, iteratively creating continuity and restoring order. Daini survived the crisis without an explosion or a meltdown.