While the original founders will always be known for their roles in identifying the idea for a new venture and packaging that idea into a business model suitable for investment support and attraction of other required resources there is some truth to the proposition that businesses that enjoy long-term successes actually have two or more groups of founders that make their mark at different stages of development. An obvious example is the point where the founders add outsiders to the executive team, either voluntarily or at the insistence of investors. While much is made of the adversarial relationship between founders and the “professional managers” the newcomers can contribute expertise that takes the firm in new and better directions and can bring a fresh and objective perspective to the strengths and weakness of the strategies selected by the initial founders.
A “new” team of founders is particularly necessary when the original trailblazers “hit the wall” and begin to struggle with key long-term decisions and day-to-day operations. Starting a new business is hard work and like most things that require intense effort and long hours the persons involved are at risk for growing fatigued and stale. Fatigue generally sets in gradually and the signs are often difficult to find; however, a a recent post on the CincyTech blog provided a nice overview of some of the symptoms that something is going on.
Ignoring symptoms of “founder fatigue” can have dire consequences. For example, if a founder fails to acknowledge negative feedback on products and services those items will start to drift farther and farther away from what the market is looking for and eventually the market will turn elsewhere for solutions. In addition, a founder who fails to take honest criticism seriously begins to lose the trust of managers and employees as they begin to worry about whether the bad news will eventually overwhelm the business and destroy the dreams that were so much a part of the initial excitement associated with the firm. Flat metrics can be a sign to investors that the founder has reached the limits of his or her skill set as a manager and that a new CEO from outside needs to be brought in to change the trajectory of firm growth. Such a change may happen quickly once the evidence is uncovered since investors are often short on patience and take on portfolio companies with a limited time horizon. Finally, troubles with building internal and external relationships will eventually stifle growth initiatives and founders need to understand that what seemed to work at the beginning is not going to be adequate when the company is growing quickly. In some cases this means changing, and often reducing, the roles of employees and/or professional advisors who provided great support for the founder during the early days. Such transitions can be painful and it may be best to bring someone new in to handle sensitive restructuring issues.
Founders are unlikely to admit to fatigue on their own and this means that someone, such as an investor or a trusted advisor, needs to keep an eye on how the founders are coping with the day-to-day stress of running the business. Financial statements and other formal reports are obviously important tools in the process; however, setting aside time for regular, clear communication on a face-to-face basis is an essential diagnostic tool. During these meetings founders should be encouraged to talk about problems and issues that are causing stress for them and which may impair the progress of the company. When problems and issues are put on the table it becomes easier to have a candid conversation about the best way for the founder to continue to contribute to the firm. Sometimes a change at the top of the organizational structure is the best path to take and in those situations the founder will at least have a good understand of how he or she was being affected by the pressures of leading the firm. In other cases, just having someone to talk with is enough for the founder to emerge revitalized and better equipped to fend off the symptoms of fatigue and continue at the helm.