by Simon Myers – June 2020
Ten years ago being a ‘founder’ of something in the UK was a rarity. It was cause for conversation and enquiry. Self-employed yes, but ‘founder’ sounded somehow a bit more exotic and serious. With the explosion of start-ups, scale-ups and private equity largesse the increase in ‘founder/co-founder/’CEO’ titles on Linked In over the last years has been dramatic.
With the profusion of founder-led businesses, there is a rise in awareness, social acceptance and admiration for those that pursue a dream. Anita Roddick (BodyShop) Dale Vince (Ecotricity) Sir James Dyson, Tim Steiner (Ocado) are the famous tip of the iceberg of hundreds of thousands of men and women who have taken the plunge to pursue their dream and build something in their own image.
We might know a founder or two, yet how many people know how to work with them? Seriously.
They are different. Working with them can be challenging. Emotional, single minded, tenacious, the strengths that put them on the path to commercial success can quickly become weaknesses as the business grows and the organisation changes.
I wanted to share reflections on founder psychology so you can better navigate these strong characters for mutual organisational benefit.
Author disclosure! - I have co-founded and led two businesses and the below comes with empathy for founders - as well as for those having to work with them.
Founder behaviour must evolve as organisation grows
Because founders have had to do the hard yards themselves, they traditionally find it difficult to trust and delegate to others. In the beginning when the business has a relatively small number of employees this does not make itself manifest. Instead cue charming stories of dedicated founder CEO’s or CTO’s going the extra mile for their customers. Like one of the co-founders of Taiwan mobile phone manufacturer HTC personally delivering phones in suitcases to customers to ensure they arrived on time.
However as the business expands, the ability to delegate and build a trusted management team becomes critical to sustainable success.
He or she has to learn to trust, work with new people, avoid doing everything (often a badge of honour) whilst ‘being in control’ is a new shift for them. It requires a conscious commitment at a personal level to change. Most founders struggle with this.
It’s much easier to carry on with the same behaviour that got you to where you are. It’s much harder to acknowledge that because you are a fantastic founder and visionary leader that you might not be a brilliant manager.
In my experience the inspirational qualities of the founder can be at odds with the more prudent and quotidian demands of people management.
If you are part of a team that feels undermined and disempowered, don’t take it personally. Prepare yourself for a deeper conversation with your founder CEO around leadership style and the tangible benefits of an empowered workforce in pursuit of their dream.
Taking advice is difficult
Most founders have had to work it all out for themselves. Late nights, long hours, unglamorous assignments, financial stress and having to deal with other people that don’t immediately recognise their genius. It’s tough. If and when some financial success does come, it can harden their resolve that they were right, and everyone else was wrong. Their business view is personal. The innate belief in their own infallibility, something that comes naturally to entrepreneurs, is turbo-boosted by success to the point where it’s difficult for them to then take advice from peers. The knock-backs have made them tough, stubborn and ready to argue the toss over almost anything.
Several years ago, I invested along with others in a sustainable food start-up. The founders were driven, worked hard, dedicated to their dream. However the business did not succeed. As with every failure there are numerous reasons. One of them was the inability to hear what outsiders were trying to tell them. Communications were stilted, became more infrequent and offers of help ignored. Whilst not their intention, the retreat into ‘I know better than you’ sealed the fate of the business.
So if you hear something like this in your organisation from the founder/CEO:
’What would you know? You weren’t here when we my (insert decision/plan/strategy) got us to our first (insert million customers/£1m turnover/front page of the FT)’
Take a deep breath, acknowledge his/her glorious past and talk about a changed context where what won the battle last time might not be the tactic for the next one.
Fantasy can be reality for many founders
The spectacular fall from grace of WeWork and its co-founder and former CEO Adam Nuemann is to some a mystery. How could someone that had built up such an impressive disruptive business, with legions of fans and paying customers in a traditionally dull sector fall so hard? Neumann, with the justification for his rebrand of Wework to the ‘We’ company demonstrated in spectacular fashion the ease with which founders move from reality to fantasy (read the blog here) .
How to explain? While Neumann is an extreme example, many founders are credited with having a vision. It's what makes them entrepreneurs not just managers. They ARE the business when it stars as they hold the path to the successful realisation of what at the beginning is just a hazy vision.
At signs of success, the desire of others to make money from their vision can create a culture where the founder morphs unopposed into a messiah-like figure. Soon surrounded by a circle of management that cheers them on, and often validated by customer responses, it's not surprising perhaps that founders can believe their own reality. Often this can power successful innovation and growth (Steve Jobs at Apple) but more often than not if the founder reality is too close to fantasy, the business can implode.
So how to know if it's fantasy or reality? There were many who guessed that the Wework model was incapable of sustaining Neumann's increasingly over-reaching aspirations and delusions of grandeur. There were many in no hurry to challenge the visionary co-founder.
Before you make your mind up as to the mental state of your leader and his or her connection to reality and whether this is a good thing for the business or not, I would seek out the finance team. Seek out those responsible for the finance, economics and profit and loss of the business. If they can’t explain the tangible benefits of a new strategy, vision, acquisition or repositioning on future earnings , then perhaps it's time to leave the dream for the surer footing of real life.
Simon Myers co-founded Figtree a creative consultancy in 2004 which was acquired in 2013 by US consultancy Prophet. He is a co-founder of SMN.