I have worked with several Founder-CEOs – Individuals who started the company and are also at the helm of those companies. One of their biggest dilemmas is the inability to pluck themselves out of every decision process. It is the inability to let go of the company and entrust a new managerial class with the decision-making process.
This problem also afflicts family businesses as the thin line between family hierarchy and company management structures get blurred.
When you look at things from the Founder-CEOs perspective, you start to understand why they just cannot let go. Although great talent can be hired and entrusted with a business, you cannot bestow conviction upon this great talent, you cannot bestow that obsession with the details.
Founder-CEOs have rare qualities, they understand their businesses in and out, just like a mother understands everything to do with their child. They understand their businesses to the point of developing finger-tip sensitivity, able to detect variations long before a data analyst or monthly profit or loss report gets to reveal such facts.
Thus, Founder-CEOs develop a mistrust for the people they hire – as they do not seem to match up to these same behaviours and standards that the Founder-CEOs have grown and fine-tuned over time.
Thus, even when they hire managers in the top leadership positions, Founder-CEOs maintain grip on most decisions. They become the constraint within the company, second-checking every decision, and micro-managing every bit of the company. I used to judge Founder-CEOs unfairly. But that is until I shadowed them, and realised that without these micro-management tendencies, the businesses would collapse within months of their hands off approach.
One of the things Founder-CEOs quickly learn is that in business, there are no small decisions.
Strategy is not delinked from the tactical and operational. If you close your eye to the small things, they soon grow into the big things. A Founder-CEO I know in Kampala calls this the principle of ‘No-Compromise’, arguing that if one can excel on the small things, the big things will take care of themselves.
This Founder-CEO will still be found in his restaurant taking orders, monitoring how servers handle a table, the flow of the processes in the kitchen. There is nothing he takes for granted. To some, it borders on a true embodiment of strategic paranoia.
He not only has the nose for opportunity, but he also has the ear for strange noises, and the eye for when small things go wrong.
He is micro-detailed, knowing every part of the process, with all his numbers off head to a rare exactness. If he were to let go, the company would start to suffer over time. It may not be obvious at the start as there will be momentum to ride on, but years down the road, one would notice the missing arm of such a Founder-CEO.
Yet, Founder-CEOs always realise that they must manage transitions, they must prepare for the times when they will not be around anymore. Once, I asked a Founder-CEO – ‘how can we clone you?’ Then with all humility, he confessed – ‘the person that this company needs after me will have to be completely different. That person should not be a clone of me, but one for those times, and one with a sense of the true north of this company.’
It was like the case of Apple Inc upon Steve Jobs’ demise. Apple did not need to pick another Steve Jobs (it would have been an impossible task), but it needed someone like Tim Cook to imbue it with the things it needed most at the time – distribution and supply chain resilience.
Thus, the issue with Founder-CEOs is not in letting go, but in those that commit the mistake of trying to clone themselves. No one can be the Founder-CEO, no one has the context of those trenches, of the storms the company has withered and the character development that happens in those phases.
A Founder-CEO is a creation of unique times and circumstances; they cannot be hired through a job interview. But they could always mentor someone in their stead, someone to take the mantle upon their exit.
Yet, Founder-CEOs should not be deposed while they still have lots to give, while they can still see things that others miss. Of course, there could be scenarios where Founder-CEOs become enemies of their own companies, deterring movement, but in most cases, they possess a rare advantage of knowing this business/industry in ways that the managerial class would never comprehend.
A Founder-CEO once told me of a savings they had made on their fleet. Upon reflection, he noticed that in picking a particular size of fleet, they were losing over $3m in two years. And it was hidden in the details of cumulative fuel consumption due to increased tonnage.
Perhaps, I started to learn that the greatest quality of Founder-CEOs is that they care about their companies, and care is not something that can be faked. It cannot be taught. Care comes from a deep zone. Only those who care can see what others miss and thus drive business progress. And those who care, do not easily let go.