Founder's syndrome is the difficulty faced by organizations 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. The passion and charisma of the founder, sources of the initial creativity and productivity of the organization, become limiting or destructive factors. The syndrome occurs in both non-profit and for-profit organizations. It may simply limit further growth and success of the project, 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. There are ways in which a founder or organization can respond and grow beyond this situation.
Symptoms
An organization suffering from founder's syndrome typically presents many of the following symptoms:
The organization is strongly identified with the founder; a result sometimes believed to be related to the founder's ego.
The founder makes all decisions, big and small, without a formal process or input 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. Furthermore, the founder has difficulty making decisions that benefit the organization because of their affiliation.
The founder has difficulty with adapting to changes as the organization matures.
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.
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.
The founder begins to believe their own press/PR and other marketing related issues.
The founder, who is usually the CEO or managing director, suffers HiPPO, which means that often their ideas, decisions, etc. keep winning over the actual better ideas, decisions, etc.
The founder becomes increasingly paranoid as delegation is required, or business management needs are greater than their training or experience.
The founder responds to increasingly challenging issues by accentuating the above, leading to further difficulties. 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 public trust. The organization becomes increasingly reactive, rather than proactive. Alternatively, the founder or the board may recognize the issue and take effective action to move beyond it as outlined below.
Responses
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.
Criticism
Despite the negative and positive symptoms listed above, according to one study focused on "knowledge-intensive technology" companies, founders with a hands-on management style are more likely to retain employees and see their firms thrive.
On the contrary to the founder's ego issue, overconfidence can be seen as a positive attribute.
