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In his classic book Managing Corporate Lifecycles, consultant Ichak Adizes identified the founder’s trap, a major challenge when a new company has moved beyond infancy into the dizzying expansion of the go-go phase. The company is now outgrowing the founder’s capabilities to implant their personal leadership styles and philosophies. “Founders are simultaneously their companies’ biggest assets and biggest risks,” he warned.
The company, he argued, can no longer be a one-person show. The founder must delegate authority and responsibility, something he or she is not used to. Indeed, in many cases professional managers are brought in at some point and the founder moved aside or shoved out.
The problem is seen as the founder. But in a recent talk, Brian Chesky, co-founder and chief executive officer of Airbnb Inc., challenged the advice. He was told to hire good people and give them room to do their jobs, but the results were to his mind disastrous. The audience included a lot of successful tech founders who said they had been given the same advice about how to run their company as it grew, and it also backfired. Often the managers they hired were essentially professional fakers, who couldn’t continue to energize the firm, and it went downhill.
Silicon Valley essayist and computer scientist Paul Graham figures the heart of the problem is that the entrepreneurs were being told how to run a company they hadn’t founded – how to run it as if merely a professional manager. “There are things founders can do that managers can’t, and not doing them feels wrong to founders, because it is,” he writes on his blog.
He feels there are two different ways to run a company: Founder mode and manager mode. Even in Silicon Valley, people have assumed that scaling a startup meant switching to manager mode. But maybe that’s not the only – or best – way. Maybe the founder must maintain more control and figure out ways to instill the start-up mentality in newcomers as the company grows.
“There are as far as I know no books specifically about founder mode. Business schools don’t know it exists. All we have so far are the experiments of individual founders who’ve been figuring it out for themselves. But now that we know what we’re looking for, we can search for it. I hope in a few years founder mode will be as well understood as manager mode,” he writes.
Molly Graham, who as a professional manager has spent the last 10 years as the right-hand or sounding board to various founders, initially rejected Mr. Graham’s line of thinking. Echoing Mr. Adizes, she felt companies are as likely to be damaged or destroyed by the behaviour of founders as they are to be made successful by them.
But as she pondered the issue, she moved past that instinctive reaction. “The most extraordinary companies in technology are run by intense, brilliant founders. Those companies are built in the image of their founder and are most successful when the company learns how to act like the founder at scale – how to think, build and ship the way the founder would,” she writes on her blog.
The intensity of the founder must be maintained. Also, the personal style and approach of the founder is part of the package. When she worked at Google – founded by two Stanford University PhD students – it felt like the company version of a university, where brilliant people could go, research ideas and experiment with new offerings. Facebook, on the other hand, felt like a dorm room in college.
The best companies are built in the image of their founder and new people brought in as operators to help get things done should not copy and paste cultures or frameworks from other situations. “The reason why many, many, many execs succeed at one company and fail when they go to the next one is because they come in and try to implement what worked previously instead of deeply getting to know the new founder and the new company,” she says.
At the same time, the best founders know they can’t stand pat. She has found them to be voracious learners. “Having worked for Mark Zuckerberg twice, one of the most mind-blowing things to witness was his learning curve and how much he grew as a leader in 10 years. Mark did not start out as someone who was obviously going to be a successful CEO of a $100-billion revenue company – he became that leader. Yes, he has something in his DNA but he also learned and grew and surrounded himself with people he could learn from and grow with,” she says.
So did Tobi Lütke at Shopify, since its 2006 founding. “People have accused Shopify of being a book club thinly veiled as a public company,” he noted a few years ago in an interview with The Observer Effect website.
In The Shopify Story, journalist Larry MacDonald shows how Mr. Lütke was aided in trying to maintain entrepreneurial intensity by the fact the company’s product was designed to help entrepreneurs gain and boost online sales. “The core competency of our business needs to be how to thrive in chaos and how to react quicker than anyone else,” Mr. Lütke said. Shopify President Harley Finkelstein noted in a 2014 interview: “Tobi has consistently pushed me … Once I get good at something lo and behold, he walks into this office and says, ‘you built that, and now you should take care of this thing.’”
Good managers do that as well, of course. But there is an intensity to founders that can’t be bottled. It can be a weakness but it can also be their organization’s greatest asset.
Cannonballs
- Gaming may be a leisure pursuit, but it also builds skills and therefore Jesse Olsen, a gamer and senior lecturer in the Department of Management and Marketing at the University of Melbourne, believes we need to ask job candidates about their gaming experience and challenge them to consider how it might add value to the organization. He also argues conversations about gaming should become a normal part of workplace conversation.
- Executive coach Dan Rockwell suggests refocusing the way you think about irritating people by paying more attention to their strengths: “Humans are messy. Accept it. We dislike people when we magnify their flaws and minimize their strengths. Pour energy into potential. Support aspirations. Don’t focus on flaws.”
- If you’re the best at doing everything in your business or department you are in big trouble, warns Toronto consultant Donald Cooper. You are deluding yourself and/or arrogant about your own abilities or not hiring well. Everyone you hire should be better at doing what you’re hiring them to do than you are – or have that potential after training and mentoring.
Harvey Schachter is a Kingston-based writer specializing in management issues. He, along with Sheelagh Whittaker, former CEO of both EDS Canada and Cancom, are the authors of When Harvey Didn’t Meet Sheelagh: Emails on Leadership.