The real dilemma of Founder’s Dilemma

15Nov10

In one of the thousand conversations I’ve had over the past month, somebody said, “You can always recognize the pioneers, they’re the ones face down in the mud with arrows in their backs.”

Two people that I care about and admire deeply have recently been removed ungraciously from the organizations they founded. One is Jeffrey Hollender, the other is a friend who would prefer to remain anonymous. In both cases, it’s been attributed to Founder’s Syndrome, what is commonly meant as the time at which a visionary leader should extract himself or herself from the enterprise they created to make room for people who can “ take the organization to the next level”.

“Founder’s Dilemma” and “Founders Syndrome” are linguistic frames not unlike “tax relief”. Without our even having to think about it, the words themselves nail the subject as something which must be eliminated. But this dilemma is one we should spend time reconsidering, because it has profound unintended consequences.

Is chasing off the founder always for the good of the organization, or it is only good for the people who want to step into positions of power and try (as they might) to fill the founders’ shoes? Or is it simply a convenient way to avoid the hard work of navigating an inevitable growth inflection point while preserving the vision and ethics of the company intact?

And is the “next level” something to which we should automatically and mindlessly aspire?

In order to grow and scale, every business looks for efficiencies, and in most cases that means doing what’s convenient. Visionary leaders are inconvenient, and the bigger the organization, the more inconvenient they become. They are idiosyncratic. They don’t always do what they’re told, and they hate to compromise. They embrace risk. They have character, passion, and outsider-thinking that have not been ground down clawing their way to middle-management in a multinational corporation. In short, they have the traits that other enterprising people admire enough to follow out of inspiration instead of just fear.

Entrepreneurs get bored easily as well, and they are typically not good at managing large organizations. Smart boards recognize this, help them get the support they need and find a way to integrate game-changing vision with the systems that can make it happen.

It has become self-evident that big business needs radical innovation in order to thrive in our world of infinite competition and finite resources. But as long as money is the only metric of success, business will continue to stifle creativity, killing what is alive and exchanging it for formulas, bullet points and fragmented processes.

In my work with social innovators and social entrepreneurs, I see every day the best hope we have for new models for business that will fix our unsustainable society. Will each of them be removed from the enterprises they found just at the point they could show us the way to take them to scale without compromising their vision?

As Chiat Day merged with TBWA in 1993, Jay Chiat famously said, “I want to see how big we can get before we get bad.” He summed up, in his elegant way, the real dilemma that every company faces. At what point do you lose that ineffable, magical thing that was worth working for? And why does it have to be inevitable?

If we continue to slide through every tough transition by firing the founder, we may never know. Jeffrey Hollender has a vision of proving that a successful business can be restorative to life rather than destructive. This will be accomplished through his continued conviction and force of will. And it will not be convenient for business as usual.

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5 Responses to “The real dilemma of Founder’s Dilemma”

  1. 1 sarah oman horne

    Cheryl,

    I see this time and again. Saw it personally (dad) and professionally, all along the way.

    It’s a relevant topic as our heroes get bought out or the next generation (mine?)…

    As professionals, we need the founders, we need their acumen.

    Not sure the solution.

    Sarah

    • Sarah,

      Great to hear from you. I want to do some real research on this – is your father’s story a good case study? Hope you’re well and Happy Thanksgiving. xc

      • 3 sarah oman horne

        Hey Cheryl,

        Not sure, as it’s pretty dated. And not sure, given at 85 that he’ll want to discuss, especially as he’s emeritus, but I’ll think of other examples.

        Best, and happy Thanksgiving to you.

        Cheers,

        Sarah

  2. 4 Ryan Smith

    Founders should certainly be retained for their vision, but also for their insight. Founders have a unique understanding of the composition of their business. If a business is the sum of the thousands of decisions that went in to forming it, a founder is aware of each of these and the assumptions behind them.
    As a founder there are literally thousands of decisions that I’m privy to that no outsider could begin to figure out much less meaningfully integrate.
    I know why our lease is 2 year instead of 4 year
    I know why the Monsanto patent doesn’t matter
    I know why we use acetone instead of methanol
    I know why our scales need 5 decimals instead of 4
    I know why our biologists use Nikon lenses
    I know why the ventilation system is overpowered
    I know why IBM can’t be our first customer
    I know why Doug was given more stock
    I know why we didn’t take the lowest bid
    I know why …. I know why… I know why…etc.
    These probably don’t make sense to anyone but me, but that’s the point, some of these are trivial, some conditional, others critical. I’ve lived and breathed this company for three years and can make a lightning fast judgment weighing all of these factors at once. No one else can.
    There’s substantial data showing that hiring a CEO from within is more likely to turn a failing company around than hiring from without. I believe it’s this same principal, and it applies equally to founders.

  3. While I feel for the Founders, I think starting a company and growing one are two very different skill-sets and it is very rare to find both these skill-sets in any one individual.
    Ultimately, I think it’s about what’s best for the company, its growth and its employees. I’m saying this now but I suppose I’ll be singing a different tune when I’m being ousted from my own company.


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