Founder's Syndrome
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Founder's syndrome (also founderitis) is the difficulty faced by
organization An organization or organisation (English in the Commonwealth of Nations, Commonwealth English; American and British English spelling differences#-ise, -ize (-isation, -ization), see spelling differences) is an legal entity, entity—such as ...
s, and in particular young companies such as start-ups, where one or more founders maintain disproportionate power and influence following the effective initial establishment of the organization, leading to a wide range of problems. The syndrome occurs in both
non-profit A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, not-for-profit organization, or simply a nonprofit, is a non-governmental (private) legal entity organized and operated for a collective, public, or so ...
and
for-profit Business is the practice of making one's living or making money by producing or buying and selling products (such as goods and services). It is also "any activity or enterprise entered into for profit." A business entity is not necessari ...
organizations or companies.


Problem

In an organization, the passion and
charisma () is a personal quality of magnetic charm, persuasion, or appeal. In the fields of sociology and political science, psychology, and management, the term ''charismatic'' describes a type of leadership. In Christian theology, the term ''chari ...
of the founder(s), often sources of the initial creativity and productivity of the organization, can become limiting or destructive. It may simply limit further growth and success, or it may lead to bitter factionalism and divisions as the scale of demands made on the organization increases, or it may result in outright failure.


Symptoms

An organization suffering from founder's syndrome typically presents many of the following symptoms: * The organization is strongly identified with the founder; a result sometimes believed to be related to the founder's ego. * Obsessive leadership style compared to a more standard behavior. *
Autocratic Autocracy is a form of government in which absolute power is held by the head of state and Head of government, government, known as an autocrat. It includes some forms of monarchy and all forms of dictatorship, while it is contrasted with demo ...
decision-making In psychology, decision-making (also spelled decision making and decisionmaking) is regarded as the Cognition, cognitive process resulting in the selection of a belief or a course of action among several possible alternative options. It could be ...
(autocratic
management style Management consists of the planning, prioritizing, and organizing work efforts to accomplish objectives within a business organization. A management style is the particular way managers go about accomplishing these objectives. It encompasses the wa ...
): Founders tend to make all decisions in early start-up companies, big and small, without a formal process or feedback from others. Decisions are made in crisis mode, with little forward planning. Staff meetings are held generally to rally the troops, get status reports, and assign tasks. There is little meaningful strategic development, or shared executive agreement on objectives with limited or a complete lack of professional development. Typically, there is little organizational infrastructure in place, and what is there is not used correctly. Furthermore, the founder has difficulty making decisions that benefit the organization because of their affiliation. *Higher levels of
micromanagement Micromanagement is a management style characterized by behaviors such as an excessive focus on observing and controlling subordinates and an obsession with details. Micromanagement generally has a negative connotation, suggesting a lack of fr ...
by checking on employees or colleagues subject matter work instead of maintaining and evolving the overall company's picture. *Entrepreneurs show higher levels of bias (e.g. overconfidence) than do managers in established organizations. * There is no succession plan. *A failing so-called ''leadership transition'' within first couple of years leading to consequences such as trust, morale, unforeseen future for the business. *The founder has difficulty with adapting to changes as the organization matures. *The culture of the leadership team and company plays an important role for success or failure. *Often the founder's idea is central to the initial business and clients of the company, so that if markets change, the need for the initial idea might vanish. * Key staff and board members are typically selected by the founder and are often friends and colleagues of the founder. Their role is to support the founder, rather than to lead the mission. Staff may be chosen due to their personal loyalty to the founder rather than skills, organizational fit, or experience. Board members may be under-qualified, under-informed or intimidated and will typically be unable to answer basic questions without checking first. * Professionally trained and talented recruits, often recruited to resolve difficulties in the organization, find that they are not able to contribute in an effective and professional way. * The founder begins to believe their own press/ PR and other marketing related issues. * The founder, who is usually the CEO or managing director, suffers ''HiPPO'' (Highest-paid-person's opinion), which means that often their ideas, decisions, etc. keep winning over the actual better ideas, decisions, etc. * The founder becomes increasingly paranoid as delegation is required, or business management needs are greater than their training or experience. *Falling into two traps: **Actions without a goal ''or'' **Wrong actions based on defined goal The founder responds to increasingly challenging issues by accentuating the above, leading to further difficulties. Anyone who challenges this cycle will be treated as a disruptive influence and will be ignored, ridiculed or removed. The working environment will be increasingly difficult with decreasing trust. The organization becomes increasingly reactive, rather than proactive. Alternatively, the founder or the board may recognize the issue and take effective action.


Responses


Novel management and leadership

There exists no single cure against founder's syndrome, as every new business endeavor is different, however companies (newly founded or larger organizations with internal groups) are providing new insights and answer to the problem. A good example for better managing is Gallup's '' 12: The Elements of Great Managing'', which is a survey-based work or
Google Google LLC (, ) is an American multinational corporation and technology company focusing on online advertising, search engine technology, cloud computing, computer software, quantum computing, e-commerce, consumer electronics, and artificial ...
's re:Work project, which is available to internal managers and the public.


Plan of action

Coping with founder's syndrome requires discussion of the problem, a plan of action, and interventions by the founder, the board, and/or by others involved in the organization. The objective of the plan should be to allow the organization to make a successful transition to a mature organizational model without damage to either the organization itself or the individuals concerned.


Criticism

* Despite the negative and positive symptoms listed above, according to one study focused on "knowledge-intensive technology" companies, founders with a so-called
hands-on management Hands-on management is a particular style of management where the manager or person in charge is particularly active in day-to-day business and leadership. It is not to be confused with micromanagement and is seen as the opposite of Laissez-faire m ...
style, which can be interpreted as micromanagement or obsessive or similar, are more likely to retain employees and see their firms thrive. * On the contrary to the ''ego issue'', overconfidence can be seen as a positive attribute. *Some persons provide opposite recommendations and advice such as "Do Everything and Anything" or "It's your company - You decide." *Entrepreneurs generally tend to be confident or overconfident, or they do not become entrepreneurs in the first place


Further reading

* * * * *


See also

* Peter principle * Founder's dilemma * Benevolent dictator for life *
Emotions in decision-making One way of thinking holds that the mental process of decision-making is (or should be) rational: a formal process based on optimizing utility. Rational thinking and decision-making does not leave much room for strong emotions. In fact, emotions are ...
*
Illusion of control The illusion of control is the tendency for people to overestimate their ability to control events. It was named by U.S. psychologist Ellen Langer and is thought to influence gambling behavior and belief in the paranormal. Along with illusory sup ...
*
Overconfidence effect The overconfidence effect is a well-established bias in which a person's subjective ''confidence'' in their judgments is reliably greater than the objective ''accuracy'' of those judgments, especially when confidence is relatively high. Overconfide ...
*
Management style Management consists of the planning, prioritizing, and organizing work efforts to accomplish objectives within a business organization. A management style is the particular way managers go about accomplishing these objectives. It encompasses the wa ...
*
Micromanagement Micromanagement is a management style characterized by behaviors such as an excessive focus on observing and controlling subordinates and an obsession with details. Micromanagement generally has a negative connotation, suggesting a lack of fr ...
*
Company culture Organizational culture encompasses the shared norms, values, corporate language and behaviors - observed in schools, universities, not-for-profit groups, government agencies, and businesses - reflecting their core values and strategic direction. ...
* Disruptive innovation


References

{{DEFAULTSORT:Founder's Syndrome Organizational culture