Founders Syndrome in family business
Most of the time, when talking about family business succession, people talk about selecting the right person from the next generation, setting up a development plan, thinking through how shares are to be distributed, and so on.
And yes, this is all important. However, there is a thing called Founders Syndrome which is equally important and needs to be discussed and addressed in order for family business succession to be successful.
What is Founders Syndrome?
Think about anyone who starts a business, takes the risks, has the sleepless nights, goes against all the naysayers and drives the business – not just into existence but into success. It takes guts, drive, passion and dedication. Many sacrifices are made, financially and personally. And often future generations have no idea of the drive and sacrifice that was required.
Most founders are brilliant creative people driven by the need to bring their business into life and for it to thrive. Sometimes there’s a certain amount of stubbornness, a touch of arrogance and a good dollop of controlfreakness… I realise I have just made up a word…
So when it comes to start thinking about family business succession (and usually those with a strong dose of Founders Syndrome leave this till the very last moment), there is a huge struggle for them to relinquish their baby that they have grown and nurtured over the years to someone else – even if it is their own children.
The reluctance comes in a variety of ways:
- They can be control freaks
- They don’t believe that anyone can do the job a well as they can
- They have incredibly high standards
- They are willing and capable of working incredibly hard
- They are driven by the joy and passion of running a business
- They often have no other interest in life – they’ve devoted themselves to the business and their family so stopping work is akin to stopping living! For them endless rounds of golf or games of bridge are total anathema.
These people are extraordinary and deserve everything they’ve got. They also deserve to be deeply respected for what they have done. The challenge is finding ways for them to be comfortable with starting to release their iron-clad grip on the business, allow future generations to make their mistakes, come up with ideas they haven’t thought of and even, at times, take the business in new directions.
We’ve worked with a lot of people with Founders Syndrome. If you suffer from it, or your parents suffer from it, here are some suggestions on what you can do to pass on the business and take it forward successfully.
The key thing the next generation has to do is to demonstrate (not just talk about) their skills and abilities. Make good decisions, find new opportunities, lead and develop staff well. Nothing makes a founder happier than when they see practical demonstrations of capability. This allows them to relax and start to explore other things they might like to do – like that bach in the Sounds, or yacht in the Whitsundays.
A large and successful family business in Australia was started out by the father and mother and built it over 20 years into an amazing and extremely profitable business. Their daughter wanted to come in to run the business and her father, while very happy about this, started her working in the most out-of-the-way office, sweeping floors and collecting mail – at the age of 32.
Over the next eight years she worked in every aspect of the business, she learned, grew and as she demonstrated her ability, her parents gave her more freedom to do things with the business. However she was told, “If you can’t gain the confidence of the senior executive team (all non-family) then you can’t lead this business”.
Eight years later, she has won over the staff and was made MD last year. Her parents have found new interests and she is leading the business through the Covid-19 crisis utterly brilliantly.
One of the keys is to find the thing that the founders just love doing and let them do it.
We’ve written before about 100-year-old founders still working two days in the business as auditors, or founders in their 90s going to the office one day a week. They are relieved that someone else is dealing with all the day-to-day operations and they can waltz in, do their thing, say hi to everyone and go home when they want.
One founder we have worked with focuses purely on new investments for the business. He loves it and he is extremely good at it, while all the day-to-day stuff is handled by his kids; he’s very happy.
The reality is that Covid-19 has provided some very interesting opportunities. We know of several businesses where the founders, because of their age and health, have had to work from home. This has provided amazing opportunities for the next generation to show how well they can run the business and for the founders to realise that they actually don’t need to be there in person and maybe, just maybe, their kids might have the right stuff to run it!
Founders are amazing, they deserve our respect and while frustrating at times, actually all they want is to be convinced that the next generation is going to run and take care of ‘their baby’ as well as they did.