Founder's Syndrome: Falling In Love With Your Business

Attached to your company? Founder’s syndrome is the difficulty faced by organizations—specifically young ones, startups—where one or more founders wish to maintain disproportionate power and influence in the organization. This syndrome can be limiting and destructive. The passion of the founder which fueled the creativity and productivity which formed their organization comes to be their downfall. It limits further growth and success. It can even result in outright failure as they are unable to delegate and hire.

The syndrome has many symptoms. You can guess many of them. The organization is strongly identified with the founder. The leadership style is obsessive—micro-managing their employees is petrol for their ego. Founders try to make all the decisions, big and small, with no feedback from others. Staff meetings are only there to gather reports and assign tasks. There is little meaningful strategy. The founder cannot transfer their leadership to anyone else because they don’t trust anybody can play their role. Staff and board members might be close friends of the founder, their sole role being to support them rather than a valuable mission.

Essentially, the founder drowns in the abyss of their own ego. There’s no one cure for founder’s syndrome. Getting fired from your own business is probably the best way to resolve it. Think of it as an autoimmune disease. Your own creative and productive force made you succeed. Now the same armada is keeping you from further improvement. It undermines the organization you worked hard to build. Rather than making way for a new leader to take the business to the next level, you make every effort to hang onto power. The result is an organization that is poorly adapted to it’s environment, set up for inevitable failure downstream.

The syndrome surfaces when a firm reaches the level of complexity the founder is unable to manage. Not everyone is cut out for every role. It’s a big punch in the gut. History is full of such cases of kings, presidents, and CEOs doing everything possible to remain in power at the expense of the organization. Some founders are willing to destroy what they have created if only they can remain in authority. Others are just scared that if they relinquish power their firms will collapse. Like any autoimmune disease, it’s treatable, but difficult to control. There are two main ways: demote or fire the founder, the hard way, or coach the founder in seeing the next stage of their career and forming an exit plan, the soft way.

Real-world instances of founder’s syndrome:

• Tech startups: many successful startups have to transition from founder-led management to professional executive leadership as they scale. For example, giants like Google and Apple experienced shifts that allowed them to evolve and reach a new level from their early, founder-driven stages, to become global corporations;

• Family business: family-run enterprises face challenges when a founder’s vision is dominant across generations. Successful businesses in this context invest in external management and establish succession plans to ensure they stay adaptable;

• Non-profit organizations: non-profits led by charismatic leaders sometimes struggle to maintain effectiveness once the founder steps down. Implementing structured governance and diversity can mitigate these effects to sustain the mission long-term.

The heart of the matter is the founder is deeply attached to their creation. It’s hard to relinquish control or reform your original vision. Businesspeople call their firms their “babies” for a reason. The early successes further reinforce the belief that their personal style is what led to success. But organizations need to evolve. If an independent management team isn’t built, the firm is vulnerable to every ebb and flow. Over-reliance on a single decision-maker acts as a bottleneck to scale. Talented managers can feel stifled and/or undervalued. Market opportunities are missed. Innovation flops. Outdated processes backed by a rotten vision cause the organization to shrivel up and die.

How you might mitigate founder’s syndrome: (1) professionalize management, hiring experienced executives or managers who bring a diverse perspective and expertise to your team which will drive your vision long after you’re gone; (2) shift your mindset from “working in” your organization to “working on”, as you are trying to build something great that can sustain and improve itself without your constant input; (3) develop a succession plan, establishing a formal plan for leadership transition inclusive of mentoring, training, and gradual delegation of responsibilities for your exit, preparing the organization for future growth; (4) implement checks and balances, like a strong board of directors for guidance and oversight in decision-making to prevent the concentration of power; (5) delegate and empower others, gradually transferring authority from you to team members to help them become independent decision-makers, free yourself for important work, and reduce the organization’s dependency on you as the sole decision-maker. Be careful falling in love with your business. It’s not your baby. You want a resilient, scalable system. Not a baby dependent on your feed.