Is your organization relying too much on its founder?
In most cases, the creation of a business is driven by the passion and vision of one person: the founder. As a result, most well-known businesses are closely associated with their founders, such as Microsoft with Bill Gates and Amazon with Jeff Bezos. But, despite the undeniable importance of a founder’s strong presence in providing direction and shaping culture, is it wise for a company to be unable to survive without them, even for a while? If a short-term absence of a few weeks disrupts operations and makes it impossible for everyone to perform their daily tasks, the organization is not really thriving. This situation is known as “founder dependency,” and it can hurt your organization in more ways than you realize. In this article, we discuss 6 telltale signs of founder dependency to help you recognize the problem and minimize its effects.
What is founder dependency?
Let’s start by defining what founder dependency means before we explore its warning signs. The term describes a situation in which a company’s operations, decision-making processes, success and overall identity depend 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 necessary for the founder to be involved in every aspect of the business. In these early stages, their skills and knowledge are really important. However, if this threshold persists even after the business has grown and developed, founder dependence is replaced by the need for a choice. Once this line is crossed, negative effects on business growth, innovation and performance begin to appear.
What are the causes of founder dependency?
The sad truth is that the path to founder dependency is often paved with good intentions. Founders want their company to evolve the way they envision it, and that passion urges them to make sure everything goes right. Still, there’s a catch here, because “right” can soon change to mean “as the founder would do it.” Even when tasks are being assigned, the founder still wants to check them, creating an extra step that can cause delays as well as stifle creativity. Additional reasons that can cause codependency include the following:
- Sacrificing structure for speed. Instead of delegating tasks and teaching employees how to see them through, founders make decisions and take actions independently “to save time.”
- Unexplained knowledge. If most of the organization’s collective knowledge resides in the founder’s mind and is not documented, employees cannot take initiative and must always turn to the founder.
- The power of habit If seeking the founder’s opinion and permission for every small or big decision has been the norm for years, teams may be reluctant to change the status quo.
- Cultural influence. The founder’s personal style becomes the default for how things are done within the organization, discouraging new ideas and experimentation.
6 Signs Your Organization Is Too Dependent on Its Leader
Now that we know what founder dependency is and where it comes from, let’s look for warning signs that will help you realize that your company isn’t designed to survive without you.
Slow decision making
The most common and obvious sign of founder dependency is repeated delays in the decision-making process. Organizations that struggle to make rapid moves are forced on their founders. Even if a department is responsible for researching a particular problem or project and proposing solutions, no action can be taken without the founder’s input. It may appear in employees to constantly seek reassurance and approval from the leader, even when they do not formally need it. As a result, whenever the founder is unavailable, important meetings with clients or stakeholders are often postponed, which slows down the process.
Passing everything through the “founder filter”.
When the founder’s preferences and personal style become the standard way of operating, the organization risks making the founder its audience. In other words, instead of having the workforce develop products, propositions, and strategies to meet the needs and preferences of their clients, they focus only on making sure they meet the founder’s expectations. However, successful organizations can maintain their competitive advantage only by researching the market and adapting to the evolving needs of clients. Trying to please the founder with every decision can lead to a lack of creativity and innovation.
Poor delegation
When knowledge is concentrated in the hands of one person, it is natural that others in the organization do not have much room for initiative. This may be because they lack the necessary skills and knowledge to actually take on the additional tasks, or because the leader doubts their ability to do the job properly. As a result, founders get involved in every project and handle the lion’s share of responsibility, while everyone else waits around for approval at every step. This creates a vicious cycle of founder dependency, which hinders employee development and makes the founder’s presence increasingly inevitable.
Lack of system and structure
Another way to recognize founder dependency in an organization is the absence of standard systems and structures. Let’s take the ship as an example, although it applies to other policies and checklists as well. In a typical organization that is not overly dependent on its leader, onboarding is a predetermined process with defined steps and steps that everyone knows and follows. However, founder-dependent organizations typically lack such a structure. Instead, they rely on the founder as a new hire, resulting in onboarding that is based on informal storytelling rather than established systems. This leads to inconsistent experiences and uneven distribution of knowledge for new hires.
Permanent 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 difficult for them to anticipate future problems or needs that may arise and proactively work to prevent disruptions. As a result, they are often 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 actually able to help their business navigate tough situations.
There is no succession planning
When an entire company revolves around its founder, their absence is rarely planned. Therefore, if the leader gets sick, travels for work, or takes a vacation, the organization underperforms. Basically, everyone is biding their time until the founder’s return, 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 greater responsibilities and work independently, without needing constant guidance or approval from their leader.
Shedding light on founder dependency
Recognizing and dealing with founder dependencies is not about diminishing 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. That way, the founder will have time to focus on strategic planning and helping the organization navigate change and crises. In this article, we explore the signs of founder dependency to help you identify the problem and begin the process of empowering employees while strengthening the organization’s identity with its founder.
