Founder's syndrome

Not to be confused with Founder effect.

Founder's syndrome (also founderitis ^{[1] [2]} ) is the difficulty faced by organizations, 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. ^{[3] [4] [5] [6]} The syndrome occurs in both non-profit and for-profit organizations or companies.

Problem

In an organization, the passion and charisma of the founder(s), often sources of the initial creativity and productivity of the organization, can become limiting or destructive. ^[4] 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. ^[7]

Symptoms

An organization suffering from founder's syndrome typically presents many of the following symptoms:

• The organization is strongly identified with the founder; ^[8] a result sometimes believed to be related to the founder's ego. ^{[9] [10] [11]}
• Obsessive leadership style compared to a more standard behavior. ^{[12] [13] [14]}
• Autocratic decision-making (autocratic management style): 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. ^[11] Furthermore, the founder has difficulty making decisions that benefit the organization because of their affiliation. ^[10]
• Higher levels of micromanagement by checking on employees or colleagues subject matter work instead of maintaining and evolving the overall company's picture. ^[15]
• Entrepreneurs show higher levels of bias (e.g. overconfidence) than do managers in established organizations. ^{[16] [17]}
• There is no succession plan. ^[11]
• A failing so-called leadership transition ^[18] within first couple of years leading to consequences such as trust, morale, unforeseen future for the business. ^{[19] [20]}
• The founder has difficulty with adapting to changes as the organization matures. ^[10]
• The culture of the leadership team and company plays an important role for success or failure. ^{[21] [22]}
• 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. ^[23]
• 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. ^[24]
• 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. ^[24]
• The founder begins to believe their own press/PR and other marketing related issues. ^[25]
• 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. ^{[26] [27]}
• The founder becomes increasingly paranoid as delegation is required, or business management needs are greater than their training or experience.
• Falling into two traps: ^[28]
  • 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. ^[29] 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. ^[30]

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. ^{[8] [31]} A good example for better managing is Gallup's 12: The Elements of Great Managing , which is a survey-based work or Google's re:Work project, which is available to internal managers and the public. ^[31]

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. ^[32]

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 style, which can be interpreted as micromanagement or obsessive or similar, are more likely to retain employees and see their firms thrive. ^[33]
• On the contrary to the ego issue, overconfidence can be seen as a positive attribute. ^[34]
• Some persons provide opposite recommendations and advice such as "Do Everything and Anything" or "It's your company - You decide." ^[35]
• Entrepreneurs generally tend to be confident or overconfident, or they do not become entrepreneurs in the first place ^[36]

Further reading

• DeMarco, Tom. Hruschka, Peter. Lister, Timothy, "Adrenaline Junkies and Template Zombies: Understanding Patterns of Project Behavior, Dorset House, ISBN   0932633676
• Postmortem culture: how you can learn from failure (by Google re:Work)
• What it's Really Like Working with Steve Jobs
• 12 Years Ago, Steve Jobs Taught an Astonishingly Effective Leadership Lesson in 5 Short Parts (by Inc. (magazine))

See also

• Peter principle
• Founder's dilemma
• Benevolent dictator for life
• Emotions in decision-making
• Illusion of control
• Overconfidence effect
• Management style
• Micromanagement
• Company culture
• Disruptive innovation

References

1. Greathouse, John. "Do You Have 'Founderitis'? In Denial? Check Out These 7 Symptoms". Forbes. Retrieved 2021-03-10.
2. Kleibrink, Maryll (December 2004). "Diagnosis: Founderitis". Executive Update. ASAE. Retrieved 24 May 2011.
3. Adler, Carlye (8 May 2007). "Time to replace yourself". CNN Money. CNN. Retrieved 24 May 2011.
4. "Surviving Founder's Syndrome". National Resources Centre. Archived from the original on 2008-12-24. Retrieved 2008-11-22.
5. "Founder's Syndrome". BoardSource. Retrieved 2019-03-26.
6. Block, Stephen (June 2002). "Toward an Understanding of Founder's Syndrome: An Assessment of Power and Privilege Among Founders of NonProfit Organizations". Nonprofit Management and Leadership. 12 (4): 353–368. doi:10.1002/nml.12403 – via ResearchGate.
7. Patel, Neil. "90% Of Startups Fail: Here's What You Need To Know About The 10%". Forbes. Retrieved 2021-03-10.
8. Ceaser, Donovon Keith (2018-10-02). "'Because the ego started to grow bigger than the project itself': a case study of founder's syndrome on an educational community of practise". Ethnography and Education. 13 (4): 459–476. doi:10.1080/17457823.2017.1384321. ISSN   1745-7823. S2CID   148925154.
9. "WeWork and the dangers of founder ego". www.managementtoday.co.uk. Retrieved 2019-09-26.
10. "Rediagnosing "Founder's Syndrome": Moving Beyond Stereotypes to Improve Nonprofit Performance". Non Profit News | Nonprofit Quarterly. 2019-03-07. Retrieved 2019-03-26.
11. Shah, Dave (2018-05-18). "3 Signs the Best Move for Your Business Is to Hire Somebody Else to Run It". Entrepreneur. Retrieved 2018-08-24.
12. Clifford, Catherine (2018-11-05). "Elon Musk: 'You're gonna go a little bonkers if you work 120 hours a week'". CNBC. Retrieved 2021-03-10.
13. Shaw, Robert B. (2020). All in : how obsessive leaders achieve the extraordinary. [New York, New York]. ISBN   978-1-4002-1220-0. OCLC   1162784081.
14. Pells, David. "All In". PM World Journal. Retrieved 2021-03-10.
15. Organization, Entrepreneurs' (2020-02-21). "How to Cure Founder's Syndrome". Inc.com. Retrieved 2021-03-10.
16. Furr, Nathan. "Why Confident Entrepreneurs Fail: The Overconfidence Death Trap". Forbes. Retrieved 2021-03-08.
17. Zhang, Stephen X.; Cueto, Javier (May 2017). "The Study of Bias in Entrepreneurship". Entrepreneurship Theory and Practice. 41 (3): 419–454. doi:10.1111/etap.12212. ISSN   1042-2587. S2CID   146617323.
18. Judkrue, A. (October 2010). "The transformational leadership factors influence global leaders". 2012 e-Leadership Conference on Sustainable e-Government and e- Business Innovations (E-LEADERSHIP). pp. 1–4. doi:10.1109/e-Leadership.2012.6524708. ISBN   978-1-4673-2980-4. S2CID   19675031.
19. Comaford, Christine. "Jerry Yang, Reed Hastings, Mark Pincus and the Four Signs of Founderitis". Forbes. Retrieved 2021-03-10.
20. "The Founder's Dilemma". Harvard Business Review. 2008-02-01. ISSN   0017-8012 . Retrieved 2021-03-10.
21. "This SoftBank-Backed Startup Sought to Disrupt the Car Market. Instead, It Became a Poster Child for Disruption Gone Awry". Fortune. Retrieved 2021-03-20.
22. Shukla, Vikas (2020-03-10). "SoftBank's top 10 worst startup investments". ValueWalk. Retrieved 2021-03-20.
23. "Über den Lebenszyklus von Firmen". Avenir Suisse (in Swiss High German). Retrieved 2021-03-20.
24. "Founder's Syndrome? Who me?". Help4NonProfits. Retrieved 2008-11-22.
25. Miller, Kelly (2019-07-25). "The Top 10 Marketing & Communications Mistakes Startup Founders Make — and How to Avoid Them". Medium. Retrieved 2019-08-18.
26. "Beware: This Hippo Kills Your Company!". Corporate Rebels. 2018-12-06. Retrieved 2019-08-18.
27. Silverberg, David (2017-04-20). "Why you need to question your hippo boss". BBC News. Retrieved 2018-08-24.
28. Kromer, Tristan (2019-06-01). "The question index for real startups". Journal of Business Venturing Insights. 11: e00116. doi:10.1016/j.jbvi.2019.e00116. ISSN   2352-6734. S2CID   188822753.
29. Adrenaline junkies and template zombies : understanding patterns of project behavior. Tom DeMarco. New York, NY: Dorset House Pub. 2008. ISBN   978-0-13-349228-6. OCLC   891469430.
30. "re:Work - Postmortem culture: how you can learn from failure". rework.withgoogle.com. 24 April 2018. Retrieved 2021-03-10.
31. "About re:Work". rework.withgoogle.com. Retrieved 2021-03-10.
32. "Founder's Syndrome: How Corporations Suffer -- and Can Recover". Free Management Library. Retrieved 2008-11-23.
33. Gerdeman, Diana (2018-07-17). "THE MOST SUCCESSFUL STARTUPS HAVE HANDS-ON FOUNDERS" . Retrieved 2018-07-28.
34. Lebowitz, Shana. "Why Andreessen Horowitz bets on 'egomaniacal' and 'partly delusional' founders being the must successful". Business Insider. Retrieved 2019-08-18.
35. "10 Startup Founders Tell Us: The Best Advice I've Ever Received". The Muse. 8 January 2014. Retrieved 2021-03-10.
36. "Entrepreneurship and the Overconfidence Conundrum". 29 March 2019.