Avoid the Founder's Trap in Your Organization
Can corporate organizations and life-forms be similar enough in nature that they both undergo a natural lifecycle with predictable stages and similar patterns of growth and behavior? Dr. Ichak Adizes, author of Corporate Lifecycles, believes so.
Both are created, grow, live, decay and die. We're familiar with this process in life-forms, so it is their counterparts—the corporations—that truly grab our interest. The successive stages of a corporation include:
- Bureaucracy and
For the purpose of this post, we'll focus on the Go-Go stage because it is during this stage that the Founder’s Trap manifests.
The Founder’s Trap is a disease.
According to Dr. Adizes, every era in human history has specific diseases that organizations suffer from.
"When I say organizations, I have in mind empires, movements, schools of thought, for-profit-organizations. Many organizations were born, grew to some point, got into a trap where there was no way out and disappeared. The cause for this is a disease called Founder’s Trap," Dr. Adizes says.
What is this disease?
Following a company’s infancy, an organization enters the Go-Go stage. A Go-Go organization is a company that has a successful product or service that has rapidly growing sales and strong cash flow. The company is not only surviving, it's thriving. Key customers are raving about the products and ordering more. Even the investors are starting to get excited.
With this success, everyone quickly forgets about the trials and tribulations of infancy.
Go-Gos feel they can succeed at everything. It is often considered a time when the founder’s vision is readily unfolding.
The Founder’s Trap begins when the Go-Go organization cannot separate itself from dependency on the founder. Symptoms include the founder refusing to delegate effectively or hire the talent needed to grow.
The needs of an organization change once the Go-Go stage ends and the Adolescent stage begins. Things may slow down in the organization compared to the height of the Go-Go stage. The decisive decision-making is no longer emergency caliber.
In this stage, the organization matures and looks to grow successfully with shared authority and shared responsibility. If the founder refuses to relinquish these aspects of control, the organization is mired in the Founder’s Trap.
Avoid the Founder’s Trap.
Is your organization at risk of the Founder’s Trap? It’s easy to determine if you ask the following questions.
- Does the founder fear losing control?
- Will the founder maintain commitment?
- Can the founder let others lead, and inspire the team in their own way?
- Will the founder release equity to management?
- Is the founder committed to a succession plan?
- Can the founder get out from the camera’s spotlight?
- What will the company require from the founder at a later stage?
Are you capable of avoiding the trap?
Ed Fernandez, venture capitalist and former BlackBerry executive, has identified three capabilities leaders need to have to avoid the trap.
Can you become a storyteller? Empathy and credibility, combined with your ability to articulate a narrative around the necessary changes are part of a continuous process of rebuilding expectations and generating hope.
You can change fortunes by channeling your inner fortune teller. Can you anticipate the moment when the organization will outgrow you? If so, plan accordingly, and prepare to release control for the greater good of the organization.
Can you transition from selfish to self-aware? Self-awareness is essential. What are your limitations and your true motivations? It is imperative for you to detach yourself from your company, embracing it as an independent entity that has its own needs to grow and prosper.
Set your organization free.
So what does Dr. Adizes believe is the best way to get out of the trap?
According to Dr. Adizes, founders should bring someone in from outside during the transition between Go-Go and Adolescence, not before and not after that. This is the most difficult transition in the corporate lifecycle because the changes are so fundamental, and the founder often appears to be an obstacle.
To get out of the Founder’s Trap, the founder must restructure the company with outside help. This process is best done by implementation consultants with an expansive range of skills and prior executive and ownership experiences.
To avoid the Founder’s Trap, an organization needs to clearly communicate responsibilities and authorities that further its strategies. Or, in other words, it must distribute the founder’s responsibilities.
In addition to building a more valuable company, the leader’s job is to build a strong management team to address issues and distribute accountability. A quality management team is required to succeed into the Adolescent stage. The founder must ensure the right people are in place to take the company to the next lifecycle.
The day will come when your Go-Go strengths are no longer a priority. If you want a legacy, treat your company like you would your own growing child - with the understanding that your goal is to make the little one self-sufficient long after your guidance diminishes.
Mark Rittmanic, founder and CEO of the consulting firm FortéONE, has conceived, built, led, and sold several successful businesses. He applies lessons learned from those experiences and from his work with hundreds of business owners to assist the company’s clients. At FortéONE, he leads business development, strategy, and identifies growth opportunities for the firm. Mark is a former U.S. Army Captain who understands the importance of structure and processes and their role in business. He is a graduate of Davidson College and a member of Vistage and ACG.