Founder Flaws

Strong personality

When starting out, founders have to put up with friends/family wondering why they quit a lucrative job/dropped out of college. There will be periods with no income, just costs. Often a partner challenging their choices when bills loom.

It takes a certain kind of person to go through that. Someone self-assured, even brash.

George Bernard Shaw said “The reasonable man adapts himself to the world. The unreasonable man persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.”

Many business owners want to change the world in their own small way. So they can seem like unreasonable people!

That kind of mentality is useful to get a business off the ground. To fight back against the nay-sayers. But once a business is established, it can prove problematic. That firebrand personality is now the person shouting in meetings when they don’t get their way.

Yes, the founder must’ve been right on some key things to get the business where it is now. But that doesn’t guarantee they’re right with new decisions needed now.

Jack of all trades

To get a small business off the ground, founders need to be modestly competent at many things:

• Sales – to win those early clients.
• Finances – understand basic cashflow, and income/expenditure.
• Processes – ensuring whatever the business sells gets done satisfactorily.
• Customer service – ensuring customers are happy, that issues get resolved.

But having basic competence in all these things often means they don’t excel at many (if any) of them. It’s not possible for one person to be amazing at everything!

A savvy business owner employs people better than themselves. The expert salesperson, the financial whizz, the operations guru. There comes a point where anything that needs doing, there’s someone better than the founder to do it.

This is healthy, as long as the founder accepts it. On occasion, ego can cause them to insist on retaining roles, even when others are better than them.

Still bootstrapping

Most founders start off with minimal cash. Just time, an idea, and determination. So they scrimp and save wherever they can.

This sits alongside the “Jack of all trades” point above. To avoid paying expensive experts, founders will DIY things. Read a blog post, watch a YouTube clip, then away they go!

When it’s just them with £100 in the bank, this is great. But when they’ve got an established business, with reliable income, it isn’t helpful. There comes a point where they have to loosen the purse strings. Speculate to accumulate.

On occasion founders simply can’t accept this. They’ll continue to insist on keeping costs to a minimum. Throttling the business’s ability to grow.

Resistance to change

The founder set out on their own as they were keen to do things differently. Different to any employed role they had before. They can then find themselves resistant to adopting new change.

Why should they? If the business has got to this stage, it’s at least in part due to their initial innovation to do things differently. If it ain’t broke, don’t fix it, right?

To a point. But there are plenty of examples in history of businesses that did one thing different/better and thrived, only to later fall behind as they failed to adapt to further changes in the market.

• Kodak dominated the camera market when it was film, but were slow to adopt digital.
• Nokia dominated the mobile phone market, until Apple invented the iPhone.
• Blockbuster dominated the video rental market, until Netflix came along.

Each of the above had an opportunity to remain ahead of the curve, but failed to do so. The reason was the people in power didn’t accepting the predicted change was going to happen.

Micromanagement

The founder started the business, and at some point did every task within it. So they know how everything should be done. They accept they can’t do it all, so recruit others to help.

But they can’t resist looking over shoulder all the time. Pointing out how employees should be doing things.

This is one of the best ways to kill staff morale.

Those capable of using initiative will be frustrated, and leave to work elsewhere. The business will be left with only those who struggle to think for themselves. So the workforce is inadvertently skewed further.

The founder becomes increasingly frustrated that nobody can use initiative. The slightest issue arising will leave the team stumped. Either too scared or unable to decide how to proceed. The founder’s created a rod for their own back, as they can never leave!

Read about Controlling Connor’s failed EOT transfer

Insubordination(!)

The founder set the business up, so did whatever they felt was best to push things forward. But things have grown now. They’re no longer solely in charge. They’re accountable to other people.

They can’t make whatever decision they like whenever they like anymore. Sure, like any manager, they’ll still have some autonomy to make minor decisions without a full committee hearing. But there are limits to this.

Some founders struggle to accept these limitations on their power. Having to answer to other people. But if they keep doing whatever they want whenever they want, other managers will get irritated with them. Forcing a founder to accept limitations on their power may not be appreciated. But it is necessary.

Burnout

On day one the founder was solely responsible for the success of the business. This would have continued for many years. But the business was small, with few clients, basic operations. So they coped with that responsibility.

The business has grown. Systems are more sophisticated. There are dozens, or even thousands of clients. Yes there’s also a team in place to help deal with these things. But founders can still feel responsible for everything.

Increasingly they’re not even in control of things they’re responsible for. Founders can find themselves doing less and less, yet becoming more and more stressed.

This can lead to a mental breakdown. Burnout. The inability to do anything.

Risk aversion

This may sound odd, as starting a business is a big risk. Giving up the reliable steady pay cheque of employment, for the much more volatile income of a business owner. So anyone starting a business must love risk, right?

To a point. But it’s easier to take risks when you don’t have much. A start up business has nothing. If it fails a few months in, the founder’s not lost much of value.

When the business is established, making reliable profits, it’s much more valuable. This is of course a good thing. But it also means the owner has a lot more to lose if it falls apart. Hence that same person who was so gung-ho at the start, may now be much more cautious.

Playing things too safe can hurt the business. Taking a risk and succeeding can lead to big rewards. So competitors which do so may pull ahead, eventually leaving you obsolete.

Cultural divergence

A business’s first few recruits are often people known personally to the founder. Loyalty/trust takes priority over skillset/suitability. This isn’t necessarily a bad thing, as you need to be able to 100% rely on your first recruit. If they’re related to you, or you’ve been mates for years, this seems more likely.

So initially, the company culture revolves around the founder and their friends/family.

Then the business grows. Soon the founder runs out of suitable people in their close network to recruit. So the net gets widened.

This is healthy. A bit more diversity of thought, as well as potentially age/gender/race/background. Whilst the founder’s still central, the culture will still revolve around their way of thinking.

Continued growth makes the founder less important. Over time, their views on what’s appropriate will be less important. This can lead to the culture changing, which again is no bad thing. Where it can become a problem is if the founder tries to fight it, insisting it remains as it was in the early days.

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Summary

The founder traits which got the business off the ground, can be what holds it back later.

• Bold and brash is good for a start up, riskier for an established business.
• With few staff, being able to turn your hand to any task is useful. Less so later.
• Start ups with tiny income need tiny costs to survive. Keeping costs low when income’s higher can be a false economy.
• “The only constant in life is change”. Is the founder obstructing this?
• Micromanaging will kill staff morale, and prevent them developing to their full potential.
• Can the founder take orders from others? This may be required!
• A successful growing business is great. But growth = stress. If not managed, can cause burnout.
• It’s easy taking risks when you have nothing. Less so when you have something to lose.
• Sometimes culture evolves to a point where the founder no longer fits in.

It takes a big person to admit they’re no longer the best to lead their own business. It’s better if you come to that conclusion yourself before others force reality on you. Think about how/where you might be holding the business back, and consider options to fix it.

If you are interested in finding out more about transitioning to an EOT, get in touch with us at Go EO to see how we can help.