What about this Founders Dilemma mentioned earlier? Noam Wasserman’s book by the same title comes from the standpoint that the Founders Dilemma is about the challenge or choice the Founder has to make between power or money. The Founder soon realizes that in order to achieve their vision they need more money. The historical catch-22 is with this need for money to grow the Founder will eventually be pushed out by the money lenders.
Rather than the term power I use the Founder’s loss of control over the day-to-day direction of the company. Outside money dilutes the Founders ownership shares through outside investors and growth entails hiring of additional senior executives to help lead and execute the Founders vision. Most Founders in my experience aren’t necessarily good at sharing.
I add another perspective that Wasserman doesn’t address. The Founder has their dilemma but there is also a dilemma amongst new senior executive hires and major new investors in the company who usually comprise the company’s board of directors. Both of these groups are made up of individuals who have strong opinions and are accustomed to leading.
As I stated earlier Founders or entrepreneurs are those who create. They don’t tweak the margins or incrementally improve what already exists. Instead, they ask the question WHY can’t something be different and therefore they conceive and build a vision. They don’t spend their thoughts on being a Leader or their effectiveness as a leader. Eventually they get to a point where they have to rely on others to sustain the vision, despite their natural and perhaps reasonable conclusion that their judgment is indispensable to the company’s success. The result is conflict and at times unresolvable.
In my experience I believe new senior executives and investors that participate with a Founder come with a preconceived mindset of; ‘not if the Founder should leave but when’. This baked in solution doesn’t even open up the conversation about other resolution avenues.
The Dilemma should be restated as: How does the organization retain the passion and skills of the Founder while building a structure to successfully execute the business plan? Money and sharing leadership don’t always intersect at the same time but both are a dilemma for Founders and other key decision makers. Walt Disney and Coco Channel early on understood delegation was a key to long term success and established other critical Leaders for their company. Steve Wozniak and Steve Jobs Lead the start and growth of Apple but eventually the board drove Jobs out of the company. His return as the savior of Apple is an entirely different but insightful lesson on the learning and shaping of a Leader.
I ask the question; “does it need to be an either-or continuum”? Are new senior executives and board members too quick to move Founders out of the company founded on the Founder’s vision? Are Founders necessarily the easiest people to work with? I think not. Are they usually an effective Leader? Not necessarily a strong point. In my experience with Founders, I think outsiders evaluate Founders capabilities to be non-productive when they find Founders becoming recalcitrant to their thinking on organizational decisions or they have ‘personality issues’ with the Founder. Bottom line, neither side has the patience or willingness to ‘step back’ and try to evaluate the situation and find resolution. The answer is always “it’s time for the Founder to move on”.