Professional Perspectives

Five Succession Planning Steps to Overcome Founder’s Syndrome

Succession planning and the founder’s dilemma

Sophia Shaw
Managing Partner, Acorn Advisors LLC

What is your favorite neighborhood restaurant? Favorite local store? That great bed and breakfast you stayed in the last time you traveled? Chances are that the proprietor—the “founder” for the point of this post—is involved. Maybe he comes around and says hello to guests or she knows you by sight or name? In any case, that person’s vision and engagement is part of what makes the establishment special and successful. The same can also be said about founders of large companies in many markets (say, Apple, for example), and about leaders of nonprofits, including foundations. Given the importance of this visionary to the vitality of the organization, having a thoughtful succession plan in place will help the organization thrive both in the short- and long-term. But that’s easier said than done.

Much has been written about what has been coined the “founder’s syndrome”—when the decision-making processes and profile of an organization have become so associated with one person or small group of people (even if they aren’t founders) that the culture, productivity, and sustainability of the business are affected negatively. Indeed, documented patterns of growth from founding through maturity, decline, and either death or reinvigoration can be traced throughout every field and in all organizations, regardless of whether they still have the founder at the helm. In any case, proactive succession planning is essential to keep the most special qualities of the founder’s original vision alive in the future (Makiyah Moody offers a good BoardSource blog on the topic).

The bottom line: at some point the founder—that person whose brains, innovation, entrepreneurial drive, sweat, tears, and money went into building success—must think about the future, plan for his or her replacement, and ultimately move aside for the good of the organization. Otherwise, chaos, hard feelings, and degeneration of a successful company’s value or nonprofit’s reputation can ensue.

That said, it is so hard to let go and to talk about a world without us in it. Whether it’s our business, our children, or our nonprofit, “founders’ syndrome” in some form prevails. “But I don’t trust anyone else to do it (run every aspect of the company/nonprofit, parent our offspring),” someone might say. “It was my vision from the beginning and I still see where we need to go,” a founder may argue. And behind the scenes are the very understandable but irrational rationales, such as, “I will live forever,” or “without this organization I am nothing,” or “I don’t want to be sent ‘out to pasture,’” or “I don’t need to plan for the time I’m not here because my children or my board will fulfill my vision.”

As with preventive medicine, estate planning, and insurance, it’s important for every leader (founder or otherwise) and every organization to prepare for the future. Here are five important steps to begin succession planning:

  • Start with a “contingency” succession plan. A contingency plan outlines who has decision-making authority if the leader is suddenly unable or unwilling to serve (the emergency “hit-by-the-bus,” or, more optimistically, the “won the lottery” scenario). This plan ideally also describes the process the organization will use to determine a permanent successor.
  • Move next to “purposeful” succession planning. This is a process of continuous planning and training for future leadership: identifying who is ready to rise into a more senior position (either a staff or a board post); who could be ready over time or with training; and the organizational weaknesses—looking at the positions no one on hand will be ready to step into, even in time.
  • Document the plans you have created, and in the case of a contingency plan, consider whether consulting a lawyer would be prudent. For example, does your plan require a change in an estate plan or institutional by-laws?
  • Remember that planning for change, while sometimes scary, is part of our responsibilities when we join a board of directors or lead an institution of any size. The most successful boards and management teams never become stagnant and always carefully select new members of diverse backgrounds.
  • Trust that succession planning, especially when there is a founder involved, gives us an opportunity to exercise good stewardship, model personal leadership and bravery, and build trust among stakeholders. Everyone will sleep a little better at night, too.

No matter the age of the leader or stage of the organization, using common sense and sound succession planning tools can make leadership transitions easier, reduce stress among employees and family members (in the case of a private business), pay homage to a remarkable founder’s legacy, and ultimately improve the strength and longevity of any organization.

Sophia Shaw

Managing Partner, Acorn Advisors LLC

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