The Evolving Role of the Founder in a Business Life Cycle
The role of a founder is dynamic and evolves significantly as a company matures. At the inception of a business, founders are typically deeply involved in every aspect—strategy, execution, and finances. This hands-on approach is essential to getting the business off the ground. However, as the company grows, the founder’s role must shift. This blog explores the types of founders, the role of founders at the major growth stages, and pathways to navigate the stages of growth successfully.
Understanding Different Types of Founders
Founders are often stereotyped as visionary, entrepreneurial, and charismatic individuals. However, this oversimplified view can be misleading. In reality, founders can be categorised into two main types, each with distinct strengths and weaknesses:
Visionary Founder: A visionary founder is someone who identifies a market gap and develops a grand vision for solving a problem. This individual excels in seeing potential opportunities and imagining where the business could go in the future. They are driven by big ideas and are often adept at strategic thinking and inspiring others. Visionary founders are crucial in setting the direction of the company and driving innovation.
Technical Founder: In contrast, a technical founder is focused on the execution of the product or service. This individual possesses deep technical expertise and excels in refining and delivering the product with precision. Technical founders are often the backbone of the company’s operational success, particularly in tech startups where product development is critical. While they may lack a long-term vision for the business, their skills in execution and problem-solving are invaluable.
The Initial Stage: Wearing Many Hats
At the very beginning, both types of founders engage in a similar range of activities. They are deeply involved in everything from strategy development to day-to-day operations and financial management. This all-encompassing role is necessary to establish the business and build its foundation. The founder’s ability to juggle multiple responsibilities is a key factor in getting the company off the ground.
The Fork in the Road: Deciding the Future Role
As the business begins to grow and mature, a pivotal decision must be made; whether to continue in their initial role or transition to a more specialised position. This is where many founders face a critical fork in the road. The business’s needs evolve, and what was once a successful approach may no longer be effective. Founders must assess whether their strength lies in continuing as a visionary leader or if their expertise is better suited to a technical role.
Challenges and Risks
One common challenge is that founders often become emotionally attached to their business. This attachment can make it difficult to delegate responsibilities and let go of tasks that were once central to their role. There is a tendency to believe that their personal involvement is essential for the business’s success. This mindset can lead to burnout and hinder growth, as the founder struggles to balance their increasing workload with the demands of a growing company.
How to Determine Your Path
To navigate this transition successfully, founders need to engage in self-assessment and seek external guidance. Here are some steps to help in this process:
- Self-Assessment: Founders should start by understanding their strengths and weaknesses. Tools such as the Myers-Briggs Type Indicator or the Kolbe Index can provide valuable insights into personality traits and skill sets. These assessments help identify whether a founder’s strengths align more with visionary leadership or technical execution.
- Seek External Guidance: Engaging with a business coach, mentor, or consultant can provide an objective perspective on the founder’s role and the business’s needs. These professionals can offer guidance on transitioning roles and help in making informed decisions about the future direction of the company.
- Continuous Learning: Founders should be open to learning and adapting. Regularly reviewing personal and business goals, as well as seeking feedback from trusted advisors can help in understanding how best to contribute to the company’s growth.
Pathways for Different Founder Types
Visionary Founder Pathway
If the founder identifies as a visionary, the next step is often to introduce a Chief Operating Officer (COO) or similar role to handle the day-to-day operations. The visionary founder should focus on setting the strategic direction, driving innovation, and achieving long-term goals. This transition requires a mindset shift from executing tasks to overseeing the company’s overall trajectory.
It is crucial for the CEO to avoid slipping back into operational tasks. A successful delegation to the COO is essential to prevent confusion and conflict within the organization. The COO should handle the execution of plans, ensuring that the company progresses from one milestone to the next. The CEO, meanwhile, should remain focused on strategic goals and inspire the team.
Technical Founder Pathway
For a technical founder, the path may involve stepping back from visionary responsibilities and allowing a new CEO to lead the company’s strategic initiatives. The technical founder can focus on maintaining operational excellence and upholding the company’s core values.
In this scenario, the technical founder may take on a role such as Chairperson of Operations, ensuring that the company’s culture and values remain intact. Meanwhile, the new CEO will drive growth, explore new markets, and serve as the company’s public figurehead. This division of labour allows the technical founder to leverage their expertise while the CEO handles strategic and visionary tasks.
Ensuring Success
Both pathways—whether as a visionary leader or a technical expert—can be successful if the founder aligns their role with their strengths and the company’s needs. The key to success lies in self-awareness and adaptability. Founders who recognise their strengths and limitations and who seek external advice are better positioned to lead their companies effectively through various stages of growth.
A critical aspect of this transition is the ability to trust and delegate to new team members. If founders bring in a C-suite executive, it is crucial to have confidence in their abilities and resist the urge to micromanage. Trusting in the capabilities of these professionals is essential for a smooth transition and organisational growth. Founders must overcome the perception that they are the only ones who truly understand the business or have the most passion for it. While they may have unique insights and deep emotional investment, external experts can offer valuable industry knowledge and expertise that can further drive the company’s success.
In Summary
Understanding the evolving role of the founder and making strategic adjustments is vital. By embracing self-awareness, seeking external guidance, and effectively delegating responsibilities, founders can ensure that their businesses not only survive but thrive in the competitive landscape.
At Active Directions, we specialise in helping small to medium-sized businesses with effective strategies through detailed review, analysis, and planning. Our goal is to align shareholders, executives, and the entire organisation, ensuring everyone is ready for execution. Reach out to us today for a confidential conversation on how we can support your journey.
