Navigating the Leadership Crossroads

Beyond Founder or CEO Dependency for Enduring Success

We've all seen them – the businesses inextricably linked to their founder or CEO. The vision, the energy, and the sheer force of personality that propelled the company from a mere idea to a thriving enterprise. I admire that drive, I truly do. But here's the thing I've learned in my years in business: that very strength can become a critical weakness. What happens when the founder or CEO needs to step back? Or wants to? Is the business built to survive, and more importantly, thrive, beyond that singular leadership?

This isn't about criticising those leaders. It's about facing a reality that impacts every business, regardless of size or sector. It's about building something that lasts, something that can adapt and evolve. It's about moving beyond what some call "founderitis" to establish a legacy, not just a company tied to one person.

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The Perils of "Founderitis"

John Greathouse, in his Forbes article, aptly describes the symptoms. I've witnessed these firsthand across a number of organisations. It's that reluctance to delegate, that insistence on being involved in every decision, that subtle (or not-so-subtle) discouragement of dissenting voices. It might stem from a deep-seated belief that "no one can do it as well as I can," or perhaps a fear of losing control. Whatever the cause, the consequences can be significant:

• Stunted growth: The business's growth becomes limited by the founder's capacity. Innovation can be stifled as new ideas struggle to surface or get implemented.
  

• Talent drain: Ambitious employees leave because they see no room for advancement, or they feel undervalued. Who wants to work in a place where their ideas are never heard?
  

• Operational bottlenecks: Decision-making slows to a crawl, responsiveness to market changes diminishes, and the business becomes fragile.
  

• Succession vacuum: The biggest risk of all – no plan for the future. What happens if the founder gets sick, wants to retire, or simply burns out?
  

Think of some iconic Australian companies. Those that have successfully transitioned leadership – like, Hey You. The Sydney founder, Rebekah Campbell handed over the reins to an outside CEO in 2016, with the current CEO being appointed in 2022. The company has a significant presence, claims the #1 spot in the order-ahead market and  has a growth-oriented strategy within the Australian food and beverage ordering market. This demonstrates the power of institutional strength over individual dominance. 

Then consider those that have struggled when the founder departs, their fortunes fading without that guiding hand. Examples such as McGrath illustrate the critical importance of getting this transition right. 

Why Does a Transition Need to Happen?

Compelling reasons why this transition is so important include:

• Scaling for the future: Building a business is dynamic. What works for a startup won't sustain a large, growing company. Transitioning allows for the introduction of professional management practices needed for expansion.
  

• Evolving roles: Founders often start as "doers," heavily involved in day-to-day operations. As the business matures, the need shifts to strategic thinking, innovation, and building key client relationships. Transitioning allows the founder to move into this role.
  

• Securing the future: Succession planning isn't just a "nice to have"; it's a strategic imperative. It ensures business continuity and protects the investment of everyone involved.
  

• Injecting fresh expertise: Bringing in new leaders can introduce valuable skills and experience that the founder may lack. This can be especially critical in areas like technology, finance, or large-scale team management.
  

• Achieving balance: Let's be honest, running a business is demanding and highly rewarding. When the demands become greater than the rewards, transitioning can allow founders to achieve a better work-life balance, preventing burnout and ensuring their long-term well-being. 
  

The Right Time and the Right Way

Knowing when to transition is just as important as knowing how. There are situations where transition might be premature:

• Business unpreparedness: If the business lacks a solid foundation, transitioning can add instability.
  

• Founder's reluctance: If the founder isn't truly ready to let go, the transition is doomed to fail.
  

• Lack of a plan: A clear succession plan is essential; without it, chaos will ensue.
  

• No suitable successors: Identifying and developing potential leaders is a critical first step.
  

When the time is right, a structured approach is key. A framework I recommend encompasses these core elements:

1. Define the role: Clearly outline the responsibilities and expectations of the incoming CEO/GM. This prevents misunderstandings and sets the stage for success.
   

2. Identify and assess: Thoroughly evaluate potential candidates, both internal and external. Don't just look for a "mini-me" of the founder; seek someone with complementary skills.
   

3. Develop a handover plan: This is crucial. A phased approach with clear timelines, documentation, and business acclimatisation is essential.
   

4. Communicate openly: Keep your team and stakeholders informed throughout the process. Address their concerns and anxieties head-on.
   

5. Facilitate and guide: Provide ongoing support to the new leader, but also give them the space to make their mark.
   

6. Review and adapt: The transition process isn't static. Be prepared to adjust the plan as needed.
   

Learning from Others

Consider seeking advice from those who have navigated leadership transitions, both within and external to your industry. Hearing from individuals with firsthand experience – their successes and challenges – can offer valuable insights. It's crucial to understand strategies that work, those that don't, and how to navigate the inevitable difficulties involved in the process.

My Challenge to You

If you're a founder, CEO, or board member, I urge you to ask yourself: Is your business prepared for a future beyond its current leadership? Are you truly ready to let go and empower others? What steps can you take today to build a more resilient and sustainable organisation?

This isn't just about avoiding "founderitis"; it's about unlocking your company's full potential. It's about creating a legacy that extends far beyond your own tenure. And that, in my book, is the ultimate measure of success.

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Author of ‘Meaningful Work: Unlock Your Unique Path to Career Fulfilment’, Nina Mapson Bone is a people strategist, consultant, chair and keynote speaker. She consults with boards, CEOs, founders and executives on bridging the disconnect between strategy and the needs, motivations and capabilities of their people. Nina’s executive career has spanned three continents and diverse sectors. She was previously the Managing Director of Beaumont People, where she led a period of significant growth for the organisation, during which it was recognised with multiple awards. For more information visit www.nmbpeoplestrategy.com.au