Transitioning from a Founder

Transitioning from a Founder

“Founder’s Syndrome” does not affect an organization only while the founder is in charge. His departure can also have negative repercussions. But there are steps he can take to transition the organization more smoothly.

Transitioning from a Founder

Starting an ultimately successful organization usually takes a strong, driven, and creative individual to get things off the ground. Problems can arise, however, when that same individual remains in control of the organization longer than is wise. However, the departure of the founder does not guarantee that problems will disappear. In fact, his departure can cause the organization to face significant new problems.

What is “Founder’s Syndrome?”

“Founder’s Syndrome” is a term used to describe the organizational difficulties that can occur when control of and vision for the growth of an organization remains with the individual who founded the organization. It occurs like this:

Someone has an idea for a new product, approach, goal, etc. and starts an organization to support that idea. He gets a couple of people to join him, asks some friends to be on the board, raises some capital, and off they go. And, lo and behold, his organization succeeds. It grows, adds staff, expands its board, raises more money, becomes better known, sells more of its product, and so on. Throughout this early phase, the founder remains involved in every step. He makes all decisions, is involved in any hiring, and continues to set the vision for the organization’s future.

At some point, however, the organization is too large for one person to manage it at this micro level. The founder becomes a bottleneck as he tries to keep his hand in every decision. Furthermore, in order for the founder to maintain control, it is likely that there are very few processes in place. For example, the organization may lack a human resources department, an employee handbook, a formal review or hiring system and, to the extent there is a strategic planning process, the founder likely generates most of the ideas.

What Can Happen When the Founder Leaves?

There has been a lot written on the damage that Founder’s Syndrome does to an organization while the founder is still in control, but I think an equally interesting issue is the damage that can occur after the founder leaves. I have worked with a number of organizations and firms that had very strong founders. During their tenure, the founders ruled with an iron fist, which squelched most conflicts. If people had an issue with one another, they were afraid to raise it, or, if they did raise it, the founders decided how it should be handled.

However, once the founders left, all the long-simmering resentments erupted. Factions formed. Fights between departments sprung up. People who had been itching for a say in the management of the organization started grabbing power. Turf battles ensued. It reminds me a bit of the dissolution of the USSR. While the USSR existed, it effectively squelched the long simmering feuds between its republics. But when it dissolved, these feuds flared up, causing all sorts of nastiness. (Lots of caveats here. First, I am absolutely, 100%, not arguing that the USSR should still exist. Second, I am well aware that there are many factors affecting whether the former Soviet states did or did not get along. My point is more of an analogy.)

How to Avoid Chaos Ensuing?

After about a year of operation, or when an organization consists of approximately six or more people, the founder should begin sharing control. For example, he should empower people to make decisions, and refrain from second-guessing those decisions once they are made. He should cede authority to others. He should shift to a more collaborative decision-making process. He should start establishing some formal processes. He should expand the board’s power, if there is a board, and ensure that it isn’t just comprised of his friends. And he needs to allow different ideas, issues, and approaches to be aired so that they aren’t festering until his departure.

Many new organizations never have a problem with Founder’s Syndrome. But if your organization is still being run by a very strong founder, stay alert when he finally departs. If there is an abrupt transition of power and authority, problems are likely to arise.


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