Is your organization too dependent on its founders?
In most cases, the creation of a business is driven by the passion and vision of one person: the founder. As a result, most famous companies have close ties to their founders, such as Microsoft and Bill Gates or Amazon and Jeff Bezos. But despite the indisputable importance of a founder’s strong presence in providing direction and shaping culture, is it wise to assume that a company cannot survive without a founder, even for a short period of time?An organization is not truly thriving when short-term absences of a few weeks bring operations to a standstill and leave everyone unable to carry out day-to-day tasks. This situation is known as “founder dependency,” and it can harm your organization more than you realize. To help you recognize this problem and reduce its impact, this article describes six tell-tale signs of founder dependence.
What is founder dependency?
Before exploring the red flags, let’s start by defining what founder dependence means. This term refers to situations where a company’s operations, decision-making processes, success, and overall identity are overly dependent on one individual (in this case, the founder). This is common in small businesses and startups, where the number of employees is limited, making it essential for founders to be involved in all aspects of the business. Their expertise and knowledge is critical during these early stages. However, if this over-reliance continues after the business grows and evolves, dependence on the founder changes from a necessity to a choice. Once you cross this line, you begin to see the negative impact on business growth, innovation, and efficiency.
What causes founder dependence?
The sad truth is that the path to founder dependency is often paved with good intentions. Founders want their companies to evolve as they envision, and their passion drives them to make sure everything is done right. However, there is a trap lurking here. Because the word “right” can quickly change to mean “that’s what the founders would do.” Even when tasks are delegated, founders still want to check them, creating extra steps that can cause delays and stifle creativity. Other reasons that can cause founder dependence include:
You’re sacrificing structure for speed. Rather than delegating tasks and teaching employees how to see them through, founders make decisions and take actions independently “to save time.” tacit knowledge. If most of an organization’s collective knowledge resides in the founder’s head and is undocumented, employees cannot take initiative and must always rely on the founder. The power of habit. If seeking the founder’s input and permission for both small and large decisions has been the norm for years, teams may be hesitant to change the status quo. Cultural influences. The founder’s personal style becomes the default for how things are done within the organization, inhibiting new ideas and experimentation.
6 signs your organization is too dependent on its leaders
Now that you know what founder dependency is and where it comes from, let’s explore the red flags that will help you understand that your company is designed to survive without you.
slow decision making
The most common and obvious sign of founder dependence is frequent delays in the decision-making process. Organizations that rely too much on their founders have a hard time moving quickly. Even departments that are responsible for conducting research and proposing solutions for a particular problem or project cannot take action without the founder’s input. This can manifest itself in employees constantly seeking reassurance and approval from their leaders, even when there is no formal need for it. As a result, important meetings with clients and stakeholders are often postponed whenever the founder is absent, slowing down the process.
Pass everything through the “founder filter”
When a founder’s preferences and personal style become the standard way of operating, an organization risks turning the founder into an audience. In other words, employees are focused solely on ensuring that the founder’s expectations are met, rather than developing products, propositions, and strategies tailored to customer needs and preferences. However, successful organizations can maintain their competitive advantage only by studying the market and adapting to the evolving needs of their clients. Trying to please founders with every decision can stifle creativity and reduce innovation.
insufficient delegation
It stands to reason that when knowledge is concentrated in the hands of one individual, there is less room for others in the organization to take control. This can occur if there is a real lack of skills or information needed to take on additional tasks, or if the leader has doubts about his or her ability to do things correctly. As a result, the founder is involved in every project and has the most responsibility, while everyone else waits for approval at each stage. This creates a vicious cycle of dependence on the founder, hinders the growth of employees, and makes the presence of the founder even more essential.
lack of systems and structure
Another way to recognize founder dependencies in an organization is the lack of standardized systems and structures. We’ll use onboarding as an example, but this also applies to other policies and checklists. In a typical organization that doesn’t rely too much on leaders, onboarding is a predetermined process with defined steps and stages that everyone knows and follows. But organizations that rely on founders typically don’t have such a structure. Instead, new hires tend to rely on founders, resulting in onboarding based on informal storytelling rather than established systems. This leads to inconsistent experience and uneven distribution of knowledge for new hires.
Constant crisis management
Leaders who are constantly focused on supporting their employees with every project and task have little time for strategic planning. This lack of time makes it difficult to anticipate future problems and needs and act proactively to prevent disruption. As a result, they are often left in a constant state of “firefighting” with little preparation for potential crises. Not to mention, if there is poor delegation and knowledge transfer across the organization, they can end up being the only ones who can actually help the business get through tough times.
There is no succession plan
If the entire company revolves around the founder, there are few plans without the founder. Therefore, when leaders get sick, travel, or take vacations, organizational performance suffers. Basically, everyone is waiting out time for the founder’s return and postponing important meetings and decisions. However, this scenario is unrealistic and detrimental to success. To grow, innovate, and secure a strong position in the industry, organizations need a leadership pipeline that gradually prepares employees to take on more responsibility and work independently without needing constant guidance or approval from leaders.
Shedding light on founder dependencies
Recognizing and addressing founder dependence does not undermine the influence of the person who is the reason the organization exists. On the contrary, it is about making the organization stronger and more independent. This frees up founders to focus on strategic planning and help the organization navigate change and crisis. In this article, we investigated the signs of founder dependence to help you identify the problem and begin the process of empowering your employees while decentralizing your organization’s identity from the founder.
