Is Your Organization Relying Too Heavily On Its Founder?
In most cases, the creation of a business is driven by the passion and vision of a single person: the founder. Consequently, most well-known businesses are closely associated with their founders, such as Microsoft with Bill Gates and Amazon with Jeff Bezos. But, despite the indisputable significance of a founder’s strong presence to provide direction and shape the culture, is it wise for a company to be unable to survive without them, even for a short time? If a short-term absence of a few weeks halts operations and makes it impossible for everyone to perform their daily tasks, then the organization is not truly thriving. This situation is known as “founder dependence,” and it can hurt your organization in more ways than you realize. In this article, we discuss 6 telltale signs of founder dependence to help you recognize this issue and mitigate its impact.
What Is Founder Dependence?
Let’s start by defining what founder dependence means before we explore its warning signs. This term describes a situation in which a company’s operations, decision-making process, success, and overall identity rely disproportionately on one individual and, in this case, its founder. This is common in small businesses or startups, where the limited number of employees makes it imperative for the founder to be involved in every aspect of the business. In these initial stages, their expertise and knowledge are indeed crucial. However, if this overreliance persists even after business grows and evolves, founder dependence shifts from being a necessity to a choice. Once this line is crossed, the negative effects on business growth, innovation, and efficiency start becoming visible.
What Are The Causes Of Founder Dependence?
The sad truth is that the road to founder dependence is often paved with good intentions. Founders want their company to evolve in the way they imagined, and this passion urges them to make sure that everything is done right. Yet, a trap lurks here, as “right” may soon transform to mean “as the founder would do it.” Even when tasks are being delegated, the founder still wants to check them, creating an additional step that may cause delays as well as stifle creativity. Additional reasons that can cause founder dependence include the following:
- Sacrificing structure for speed. Instead of delegating tasks and teaching employees how to see them through, the founder makes decisions and takes actions independently “to save time.”
- Unspoken knowledge. If most of the organization’s collective knowledge lives in the founder’s mind and has not been documented, then employees cannot take initiative and always have to turn to the founder.
- Force of habit. If asking for the founder’s opinion and permission for every small or big decision has been the norm for years, then teams may hesitate to change the status quo.
- Cultural influence. The founder’s personal style has become the default of how things are done within the organization, discouraging new ideas and experimentation.
6 Signs That Your Organization Depends Too Much On Its Leader
Now that we know what founder dependence is and where it comes from, let’s explore the warning signs that will help you understand that your company is not designed to survive without you.
Slow Decision-Making
The most common and evident sign of founder dependence is frequent delays in the decision-making process. Organizations that overrely on their founder struggle to make swift movements. Even if a department is responsible for conducting research and proposing solutions on a particular issue or project, no action can be taken without the founder’s input. This may manifest in employees consistently seeking reassurance and approval from the leader, even when they don’t formally need to. As a result, important meetings with clients or stakeholders are often postponed whenever the founder is unavailable, which slows down processes.
Passing Everything Through The “Founder Filter”
When the founder’s preferences and personal style become the standard way of operating, then the organization risks making the founder its audience. In other words, instead of the workforce developing products, proposals, and strategies to match their clients’ needs and preferences, they focus only on making sure they meet the founder’s expectations. However, successful organizations can only maintain their competitive advantage by researching the market and adapting to the evolving needs of clients. Trying to please the founder with every decision can lead to stifled creativity and decreased innovation.
Poor Delegation
When knowledge is concentrated in the hands of one person, it’s only natural that others in the organization don’t have much space to take initiative. This can occur because they genuinely lack the necessary skills and information to take on additional tasks, or because the leader doubts their ability to do things correctly. As a result, founders end up being involved in every project and handling the lion’s share of responsibility, while everyone else waits around for approval at every step. This creates a vicious cycle of founder dependence, hindering employee development and making the founder’s presence more and more indispensable.
Lack Of Systems And Structures
Another way to recognize founder dependency in an organization is the absence of standardized systems and structures. Let’s take onboarding as an example, although this applies to other policies and checklists as well. In a typical organization that doesn’t rely excessively on its leader, onboarding is a predetermined process with defined steps and stages that everyone knows and follows. However, organizations that are founder-dependent usually lack such structure. Instead, they tend to rely on the founder in the event of a new hire, resulting in onboarding that is based on informal storytelling instead of established systems. This leads to inconsistent experiences for new hires and an uneven distribution of knowledge.
Constant Crisis Management
A leader who is constantly focused on supporting his workforce with every project and task has little time left for strategic planning. This lack of time makes it challenging for them to anticipate future issues or needs that may arise and act proactively to prevent disruptions. As a result, they often end up in a constant state of “firefighting,” as they are rarely prepared for potential crises. Not to mention that poor delegation and knowledge transfer across the organization can leave them as the only person who is actually capable of helping their business navigate tough situations.
No Succession Planning
When a whole company revolves around its founder, there is rarely a plan for their absence. Therefore, if the leader gets sick, travels for work, or takes a vacation, the organization underperforms. Essentially, everyone is biding their time until the return of the founder, postponing important meetings and decisions. However, this scenario is unrealistic and detrimental to success. To ensure growth, innovation, and a strong position in the industry, organizations need a leadership pipeline that gradually prepares employees to take on more responsibilities and work independently, without the need for constant guidance or approval from their leader.
Shedding Light On Founder Dependence
Recognizing and addressing founder dependence is not about undermining the influence of the person who is the reason for the organization’s existence. On the contrary, it is about making the organization stronger and more self-sufficient. This way, the founder will have the time to focus on strategic planning and help the organization navigate change and crises. In this article, we explored the signs of founder dependence to help you identify the problem and begin the process of empowering employees while decentering the identity of the organization from its founder.
