Moving on
Founder’s Syndrome: the face behind the (toxic) culture
Toxic culture is on the rise; it’s not surprising considering the changes we have been through and business’ penchant for reverting to a bottom line / finance focus. But employees, customers and many investors have moved on too, and with most organisations hosting 5 generations of workers, people want new things from organisations! These people can, and do, vote with their feet and their £’s, moving towards organisations they feel good about investing in, buying from, or working for. As always, I look to the people, and I have been discovering ‘Founder’s Syndrome’ (FS). I recognise this as something I have seen my entire working life, and that others’ have related to me along the way.
There are some positive examples at the end, those that didn’t fall into the FS bucket. I would encourage you to look at what they do for their employees, and in terms of CSR, simply to make work and the world a better place!
While most papers on FS focused on the third sector, my experience in government, academia, SMEs and industry illustrates that this is far from being solely a third-sector problem. Businesses & organisations of all sizes, shapes and ages struggle with this behaviour set; you may see this behaviour developing when the organisation has grown or is evolving in a way that the Founder is not equipped to deal with, or it may be ego and identity (or a combination). FS provides the ‘face’ of many toxic cultures and is something that organisations should be aware of; what it looks like, how it impacts on organisational performance, and how it can be avoided or averted.
For ease of focus, I will use the term Founder throughout, but it could be someone in a leadership position at any level of an organisation. This could even be someone who has had a long tenure, who has not moved on.
What does Founder’s Syndrome look like?
Think of a strong personality, someone with passion, drive and focus. They have a strong emotional and identity bond with the organisation, often integrity, focus and experience — likely to have respect from the external community in which the organisation sits. This is an individual that has either overcome adversity and started something positive (e.g. charity), or who has turned around a challenging situation / team / project and needed to have complete control to set things in motion and provide momentum. They have vision, sounds good, right?
Now amplify that passion, drive and focus coupled with power, and add single-mindedness, stubbornness, a reluctance to see or hear others’ perspectives, and a ‘my way or the highway’ principle set. This links to the psychology and behaviour of the Founder, they may be suffering from imposter syndrome, which impacts on their ego and strong sense of self-worth. So, they stop listening, place the blame for problems externally — it’s always someone else’s fault, they do not reflect on their actions, or decision making and believe theirs is the only way.
This person is likely to:
· Ignore advice — especially when it does not align with their own thinking, and/or suggests a change from a policy or process which was their idea.
· Micro-manage — interfering in mundane tasks, close oversight of projects and day-to-day operations.
· Disrespect (mistrust) specialists, usually when they’ve been brought in to address specific problems (think marketing, or operations).
· Display an opinion set and behavioural style that no longer represents how the business wants to be viewed.
· Conduct sales, or governance meetings without key personnel, and commit to deals which risk over-stretching those involved.
· Needs to be the first point of contact, and likely to commit to new partnerships without consulting the board.
· Undermines and blocks necessary change, despite verbally agreeing to it.
· …this is not an exhaustive list, but you get the picture
…what does that feel like for the people in the organisation?
This behaviour leaves teams, the executive, operations, and others feeling de-skilled and undervalued — not to mention frustrated and apathetic! In holding on to their reckless autonomy, the Founder is becoming a liability and gently suffocating the organisation, sometimes not so gently! The organisation will feel disjointed, it will feel at war with itself. Factions will form (usually role or geographically focused), and there will be a lack of co-operation, collaboration and innovation. Decision making is slowed, as people second guess responses or fear reprisals.
It is likely that the senior leadership team feel unable or unwilling to challenge the Founder’s behaviour. It probably falls to one person to do all the challenging (then they will lead the charge to leave, or burnout and be long-term absent). If the Chair of the Board is being kept at arm’s length and the non-executive are not meeting with the directors — these are sure signs that there’s a problem!
As the organisation has grown, roles will have been given to those who will not challenge the leader, this will damage the organisation not least because the skills are not in the right place. At worst that leaves people not skilled, or trained, in management using the only behaviours they know, and they copy the boss. In addition, false promises of promotion, or reward, to those who should have received it leads to apathy, which spreads like a weed! Then, people disengage and leave.
If people are leaving the organisation because of leadership behaviours, if the workforce aren’t engaged in the decisions about their day-to day work and are talked over / ignored in customer and stakeholder meetings, if no-one feels willing or able to challenge behaviours, policy, process, your culture is becoming toxic and the chances are the organisation needs to change.
When people leave because of behaviours like this, they talk about it to others (e.g. Glassdoor and their peers), this impacts on the pool of available talent that would be willing to come and work with you. It reduces the depth of corporate knowledge, consistency, learning, and it costs you in £’s. For every person you need to replace it will cost you approximately one year’s salary. Reputationally, this is poison.
“the budget size of founder led organisations was found to be smaller than those led by non-founders” (Survey of non-profit leadership, 2002)
…ideas about solutions and avoidance
The general consensus on what to do if you are an organisation in this situation fall into 2 camps: Fix the Founder or Fix the Business. Either will be challenging for the Founder to accept, as they will be keen to maintain control over everything (especially power), both need to happen.
The most explosive action when Fixing the Founder would be dismissal. This could be led by the board, or shareholders; alternatively a demotion, hostile take-over, or whole board dismissal — this would require changes at senior level appointing unbiased directors who would be able to initiate a subsequent period of repair for the organisation. The Board would need to be sure that they were appointing the right people to take the organisation forward.
A less hostile approach could be to dilute the Founder’s influence, providing an ongoing role with the organisation as an advisor; they are likely to still be passionate about the business and have the contacts across the stakeholder group. However, this would need to be as an employee, subject to the same rules, behavioural norms and values that the organisation wishes to move forward in the future. This may be too much for some. Alternatively, they may agree to withdraw and leave by agreement, and the business could then rebuild.
In any case, the business would need ‘fixing’ through influence and values & behaviour-based change. This means trusting your people, devolving authority, promoting on skills (or investing in good training if developing), and recruiting specialists and encouraging them to do what they do best. To evolve and grow with dignity requires good governance and the senior leadership team need to be able to call each other out, especially if their behaviours do not align to the organisational values or detract from progress. The senior leadership team should develop their own ways of working which provide acceptable respectful challenge, and provide a forum to hear people’s lived experience, suggestions, and ideas. This can be professionally facilitated, with ongoing support for implementation. Having an external voice during this period can be hugely useful in terms of providing challenge and a different prespective.
The business should collaboratively co-create their new processes, clarify roles and responsibilities, policies, and behaviours (based on values to create the right culture). Develop a set of workshops from across the organisation, avoiding the traditional stovepipes and respecting each capability area to co-design the future. You can support process and implementation through the identification of a strong, organisation-wide team of empowered change agents. There will be a need for a reporting mechanism with teeth, for behaviours which are no longer acceptable but may still exists in parts of the business, with reward and disciplinary processes in place to respond accordingly. Be clear about how each person contributes to the organisations aims and outcomes, how they make it what it is.
“Founder’s syndrome is unlikely to be found where the leader grows faster than the organisation”. (Coetzee, 2022)
Of course, most of this can be put in place in mitigation, with the Founder’s agreement, should they be given the opportunity to remain. FS can be avoided with a self-aware, skilled leader who continuously listens and learns; plus good governance and a diverse, independent team of directors.
What about those good examples? Take a peek at Virgin, Specsavers, Marriot, and River Island — where the founder is still involved, differently.
Remember — bosses have a sell-by date — knowing when to move on is the sign of a good leader!
“Just put a reminder in your calendar for five years’ time saying “time to go””. (Anonymous, 2017)
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Do you have examples, good or bad of a founder in an organisation? Are you the founder and have successfully evolved the organisation (& yourself) & would love to share your story, or have you been the Founder and had to walk away? I am looking for case studies and interview subjects to develop my thinking on Humanising Work, where people have been considered first, for a more fulfilling work experience, more collaboration, understanding of customers / stakeholders & a better bottom line. Please do get in touch, I would love to hear from you!
Thanks to Anonymous, who wrote in 2017, “‘Founder Syndrome’: the strong personality type crippling my charity” and sparked my research into this!
