18 August 2006

A clear willingness to fail

Founders are typically strong willed individuals who focus on a goal and don't let much get in their way. "Driven" is a word often used to describe them. Founders typically are true entrepreneurs in every sense of the word - undeterred by lack of resources, stubborn, won't take "no" for an answer, and unwilling to follow norms and traditions. However, along with that comes a lack of willingness to fail - actually to allow anyone within the organization to fail. Often that means attracting individuals who "listen" rather than take initiative on their own and reinforcing that behavior by maintain themselves as a central point for all decision making.

At an early stage organization, this type of management by autocracy sometimes works well. Even small mistakes in the very early stages of a venture can be catastrophic. But as the organization grows, this type of behavior stifles (or perhaps strangles as one transition CEO put it) the organization. Single point decision making can work with a small team. However, as the team grows past the point of the founder's direct sphere of control, this type of management breaks down and likely will retard the organization's growth.

Letting go, or perhaps handing someone else the reins, is contrary to this type of behavior. And of course, letting go is a prerequisite to allowing someone else to fail. But just as all of us parents have found in raising our kids (perhaps the most challenging management task any of us will ever encounter), unless we are willing to let go, to let our kids try their own limits, make their own decisions, and perhaps fail - sometimes incurring direct physical pain as a consequence - they will never grow, flourish or reach their own potential. So founders who are not willing to allow their prodigy to fail ARE NOT READY TO TRANSITION TO AN OUTSIDE CEO!

While founders are often the most capable among us, one great person will find it tough to compete with a team of empowered individuals who can think, make decisions, and learn from their mistakes. Edison was often quoted as saying the secret to his success was increasing the number of times he failed. A founder who just can't stand to let a new CEO come in and fail (or perhaps do things that the founder views as a prescription for failure) will constantly be taking the baton back from the new CEO's hands - neutering the benefits that might have accrued to the organization.

Not all transition CEO's get this concept either. So the idea of handing off the organization from one autocratic leader to another, provides no benefit to the organization. On the other hand, if the new leadership is based upon a decentralized and employee empowering strategy, the benefits to the organization can be immense.

A founder's willingness to fail may be a key indicator of the potential success of a transition CEO.


  1. Interesting post. I've read several of the posts and I like the whole idea of the blog. Founder transitioning is an important issue that does not get much attention besides invoking "Founder Syndrome" and shrugging the shoulders. The idea of someone letting someone else take risks and fail with "their" business requires an enormous amount of trust. "Letting go" is deeply personal and emotional. A change agent must pay attention to that - as you point out. Personally, I've dealt with two founder transitions, one in the nonprofit sector, and one with a family member, and I am especially attuned to the emotional attachment between a business and a person who created/developed it. Are you going to generalize some of these concepts to a non-business context? The nonprofit setting is rife with founders who struggle with these issues. More broadly, I feel that this issue and awareness of it is going to become more and more pressing as employee autonomy and empowerment grow. People found new programs, products and services all the time and many of the same attachment issues apply. Thanks for the insights.

  2. Thanks for the thoughts, Michael. I do believe that not-for-profits suffer from the same symptoms as for-profit companies and there are very similar founder issues.