Tuesday, February 18, 2014

The problem with Founders

On the weekend my wife and I went to have lunch with some friends of hers. While we were waiting for lunch to be set out on the table I struck up a conversation with the hostess’s husband.  Mark works for a company that in turn works with maturing start-up companies. We eventually got around to talking about working with the Founders of the start-up. Mark has worked with several start-ups now so it was interesting to hear his observations of what it was like to work with people whose sense of self is so intimately wrapped up with their company.
For years many of these people have work tirelessly getting their baby up and walking. They have done everything from licking stamps on envelopes sent to prospective clients to working on deals that will finance their company’s first expansion beyond a handful of employees.  They have done it all and feel they know it all. Mark’s speciality is to take these companies to the next level. To help them 'cross the chasm' to use a term popularised in Geoffrey A. Moore’s book, Crossing the Chasm. Because if they can’t make the leap they most certainly will fall into that chasm, flounder and die.

I asked Mark, “What is the biggest impediment you have found to a start-up successfully crossing the chasm?”. His reply, “It is often the Founder.  The problem with Founders is that they are great starters, with great ideas, who can get things done through sheer will and strength of personality, and of course technical know-how, but when it comes to taking the business to the next level, they need people with a skill set or capabilities that they just don’t have. Quite often that is a huge blind spot for them”.  Intellectually some Founders know this, but because they have held the reins for so long and have made so many of the important decisions, they simply cannot let go. Founders have other issues as well as not being able to let go or learning new skills.

Founders often fail to build trust amongst the others in the organisation or they erode trust during their daily interactions with others.  They simply do not trust others to do the work the way they believe it should be done. Consequently, the staff never gain the confidence needed to make good decisions or the mistrust sets up a situation where communication within the organisation is poor.
Sometimes Founders end up focusing on the wrong things, the things that they feel comfortable with, but not necessarily the strategic activities such as growing the revenue through expanding the customer base or finding more efficient and effective ways of running the business. 

Founders often forget too that in a small space their every behaviour is seen and evaluated by those around them.  Their behaviour is often considered as the ‘norm’ to be replicated as the culture develops. If the Founder shirks responsibility for bad decisions and places the blame on others then that too finds its way into the culture, with unfortunate consequences.

The drive to be popular is sometimes a weakness demonstrated by a Founder. The primary responsibility of the Founder is not to develop friendships but to deliver results.  While collegiality is a good thing outstanding results are what create a happy and unified team who in turn can create stellar results. 

Sometimes Founders, because of their early leadership position and the impact they have had on the development of the organisation fall into the trap of self-importance. They get caught up in their position and often seek outside recognition and accolades for themselves or see themselves as indispensable. They love to get out in front of the crowd and talk about what they are doing, rather than what the organisation is doing. What they fail to see is this “all-about-me” approach turns people away eventually causing the leader's own demise.

I spoke of Founders having blind spots earlier. 360 evaluations are very useful when it comes to revealing blind spots in a leader's or anyone's behaviour. However, many organisational cultures do not support a 360 evaluation of their leaders. The reasons’ are many but the result is the same. Founders do not see, aren’t aware of, or simply deny having a blind spot. Without the 360 evaluation Founders need to have people around them that are brave enough to point out the blind spots and if need be hold the Founder accountable for adjusting their behaviour.  Unfortunately, when they do not address their blind spots, they often find themselves on the outside looking in after the investors have pushed them aside or out and brought in a whole new management team to help the organisation ‘cross the chasm’.

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