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Diagnosis: Founderitis


EXECUTIVE UPDATE, December 2004

When someone with passion and commitment creates and builds a strong association, members and society benefit. But these founders can turn into their own worst enemies when they refuse to recognize that their organization has "outgrown" them, needing leadership skills the founder does not have or refuses to develop. The result? A nasty case of "founder's syndrome" or "founderitis." The cure? A tricky mixture of growth opportunities, board involvement, and a firm delivery method.
By: Maryll Kleibrink
 
Of course organizational founders want to nurture their babies. But when "nurturing" becomes "smothering," it's time for a change.

The term "founderitis" or "founder's syndrome" refers to the unhealthy condition that afflicts many nonprofits whose founders maintain a stranglehold on organizational leadership. While many nonprofits owe their success — and in fact their very existence — to their founders, those same individuals can create chaos that ultimately leads to the organization's collapse. The challenge to founding CEOs and boards of directors is to take steps to change conflict and chaos into opportunities for growth.

Symptoms
Founder's syndrome manifests in numerous ways. The leader who suffers from founderitis

  • Gives short shrift to planning activities, staff meetings, and administrative policies;

  • Is reluctant to relinquish strategies and procedures that worked in the past, although circumstances may dictate new approaches;

  • Neglects to institute new systems, even though the board has formally requested them;

  • Seeks and accepts little input from others in making decisions;

  • Sees all challenges as hostile and drives away staff and board members perceived as disloyal; and

  • Refuses to delegate authority.

Sue Deuchler sits on a board of directors of a local nonprofit counseling center in Aurora, Illinois, that recently fired the group's founder and executive director. The founder couldn't relinquish day-to-day control of the organization, even when she was confined to a hospital bed for several weeks. "She insisted that her staff bring all the checks to her at the hospital, so she could continue to sign them herself," says Deuchler.

Many of us can recognize in this portrait a founder-led organization we've known. These workplaces are marked by a dynamic leader who has breathed life into a complex enterprise. Once this baby they have tended begins to grow, however, they find themselves unable to let it learn to walk on its own and choose its own path.

Cause
While not inevitable, founder's syndrome is in many cases the natural outgrowth of organizational growing pains. Deborah Linnell, in her article "Founders and Other Gods" in Nonprofit Quarterly (Spring 2004), cites Karl Mathiasen's classic description of the life cycles of nonprofit organizations in offering an explanation for this all-too-common affliction.

In his white paper "Passages: Changing Organizations and Boards," Mathiasen characterizes the first phase of nonprofit development by its intense focus on mission and informal organizational structure. "It is in this stage," notes Linnell, "that founders have flourished, and organizations have flourished because of them." The reason is that founders are passionate about a cause, committed to meeting challenges directly, and apt to thrive when surrounded by a small group of others motivated by a kindred passion and commitment. This core group is willing to work long hours, and the staff is loosely structured, with roles and responsibilities that sometimes overlap and are ambiguous.

As these young nonprofits meet with success, however, they begin to attract more resources and expand their staffs. Founders continue running their organizations like they did when the groups operated out of a person's basement, although the budget may have grown to more than a million dollars a year.

It is at this crossroads in organizational development, according to Mathiasen, that tension develops between the exclusive focus on mission and the need to pay more attention to internal systems and structures. New staff members are hired who previously worked at other large organizations, where more formal operational systems were in place. New board members are recruited, and they bring specific competencies that distinguish them, as well as specific suggestions for change.

Founders, because they are not detail-oriented and are driven by their exclusive devotion to mission, often disdain management tasks. At some point, staff members begin to complain to the CEO or perhaps even directly to the board, calling for more systems to be established. Founders, comments Linnell, may "see all such challenges as malicious or wrongheaded or an abysmal waste of time in the face of the real (mission) work of the organization. This can lead to all-out battles between the champions of mission and the champions of systems."

Family background also can play a role in predetermining whether a founder is susceptible to developing founderitis, because personal history can dictate founders' leadership styles, according to Susan Kenny Stevens of the Stevens Group, who is author of "Helping Founders Succeed" in the Grantmakers in the Arts Newsletter (Autumn 1999). In her view, "achievement-oriented founders" grew up in nurturing families that encouraged them to believe that nothing was beyond them. In many cases, the parents of "independence-oriented founders" were self-employed, providing an early role model of autonomy and responsibility. Then there are the "control-oriented founders" who "may have come from families filled with poverty and/or emotional insecurity…. They grow up believing in themselves and needing to stay in control, particularly when they are threatened or their environment gets hostile."

While these can-do traits of independence and dominance often are strengths that make founders good leaders, they also can lead to their downfall. For instance, too frequently, people who have the drive and ability to found an organization are saddled with an oversized ego. And when founders put their pride and their desire to control before the needs of their organization, everything begins to unravel.

This was exactly the case at one transportation nonprofit whose founder deliberately built a weak board consisting mostly of notable-name but honorary-in-practice members who rubberstamped his reports and ignored confidential complaints by staff about questionable and arbitrary management practices. Eventually, donors backed away as these problems worsened, and the organization's reputation — along with that of its founder — became almost irretrievably diminished.

Jim Collins, in his book Good to Great (HarperBusiness, 2001), identifies the dangers of ego. Leaders concerned more about their personal greatness than the organization's success, he notes, "often failed to set the company up for success in the next generation. After all, what better testament to your own personal greatness than that the place falls apart after you leave?"

On the other hand, Collins describes so-called "level-five leaders" who take their companies to new heights of greatness by blending a fierce inner intensity with personal humility. Although characterized by a passionate resolve to do whatever is needed to make the organization world-class, these good-to-great leaders "never wanted to become larger-than-life heroes. They never aspired to be put on a pedestal or become unreachable icons. They were seemingly ordinary people quietly producing extraordinary results."

Treatment
Unfortunately, no surgical procedure has yet emerged to trim excess ego, nor has a drug been developed to shrink swollen heads. While the cure for founder's syndrome sometimes requires removal of the leader — a process that can inflict lifelong psychological scars, as well as lasting damage to the nonprofit itself — it need not always be such a bitter pill.

Personal growth is the key therapy most often prescribed for founders in over their heads. Assuming that a founder does not want his or her association to fall apart after he or she leaves, in testament to their own personal greatness, the "patient" must learn to relinquish ownership. This is not, according to Stevens, something that can be lightly undertaken or easily accomplished. She identifies three "stages of separation" that pave the way for institutional sustainability:

  1. Delegation — when founders accept the fact that they can't do everything themselves and need to bring on people whose strengths complement their own. Even so, these helpers don't reach the status of joint decision makers. The founder still views them as someone merely to support the founder's leadership.

  2. Individuation — when founders achieve the "psychic separation of their personal identities and goals from their role as a founder." A critical juncture in organizational maturation, individuation occurs when the founder begins to accept that the organization's success no longer depends solely on the founder's creativity and decisions but instead requires the input of partners who are equally or perhaps more skilled than the founder.

  3. Institutionalization — when succession planning begins. Founders gradually shift the various functions they have previously filled to worthy successors who care about the organization, while defining a new role for themselves. Stevens notes that since the founder's values and aspirations for the organization are his or her most valuable legacy, the organization must recognize their critical importance at this stage and aggressively seed these elements throughout the organization to ensure they will continue beyond the founder's tenure.

By understanding that the conflicts they are experiencing are part of a natural and inevitable growth cycle, successful founders will take time to reflect and learn. They will adapt their leadership style, learn to share and facilitate, and examine the new opportunities opening up before them. If not, the boards have no choice but to fire them.

Board members play a critical role in supporting the founder through this process. Carter McNamara, a consultant and creator of the Leaders Circles Program at The Management Assistance Program for Nonprofits in St. Paul, Minnesota, recommends in his article "Founder's Syndrome: How Corporations Suffer — and Can Recover" a number of steps that a board can take to help a founding CEO. One is that board members take full responsibility for the role of the board in overseeing the competent management of the organization. Boards should thoroughly review and evaluate their own roles, perform yearly self-evaluations, conduct regular strategic planning that establishes clear goals and objectives, evaluate the founder accordingly, develop an active and involved finance committee to head off potential fiscal management problems, and ensure that key staff systems (e.g., clear job descriptions and personnel policies, performance reviews, and regular staff meetings) are in place.

McNamara also maintains that board members play an important role in building morale within the institution, particularly by supporting the founder with coaching and affirmation to ensure that he or she feels safe and valued and understands the reasons for needed changes. He suggests forming a personnel committee, drawn from the board, that includes at least one or two experienced organizational leaders to provide the founder with ongoing coaching.

Stevens likewise recommends a committee of mentors — ideally, retired CEOs who already have weathered transitions of their own. However, she suggests assembling a personal board of advisors that does not include board members. Because of their ultimate responsibility for the stability and management of the organization, the board of directors must ultimately make decisions that are in the organization's best interest. They must therefore hold the founder accountable for the effective discharge of his or her management position, says Stevens. She adds, "Offer the founder an emeritus position if he or she can't or chooses not to pull the full weight of his or her staff position."

Asking a founder to transition to a seat on the board of directors can pose problems, though, according to Lois Gibbs, executive director of the Center for Health, Environment and Justice, a group that offers leadership development assistance to grassroots environmental groups. Good intentions went awry at one organization where Gibbs had worked. The founder was moved to the board after hiring a new director, but the board continued to turn to the founder for approval of new directors, directions, and programs. Because the board was confident and comfortable with the founder's leadership, every decision was passed by that individual before being accepted by the board — a case of micromanagement at its worst. This made the new staff feel inadequate, second-guessed, and unable to move forward.

Jim Abernathy, founder and executive director of the Environment Support Center, which provides organizational development assistance to hundreds of nonprofits nationwide, contends that part of the reason founderitis develops in the first place is because "founders simply have nowhere else to go, so they hang on too long." By the time it becomes clear that a founder's inability to share leadership is driving the organization into the ground, founders often are not yet old enough to retire and yet can't contemplate starting over or taking a subordinate position elsewhere.

"It is the responsibility of board members to ensure that founderitis is not allowed to develop to that point in the first place, as much as it is the founder's responsibility to listen and change," states Abernathy.

In some cases, founders are able to grow in self-awareness and learn how to successfully navigate the leadership challenges before them. These founders grow with their organizations into a new stage in their life cycle. Others, who are unable to steer their organizations to the next level, choose (or are forced) to go their separate ways. Where might they end up? Despite potential problems, exiting founders still might find themselves in a seat on the board (either voting or nonvoting) to ensure the qualities that enabled the founder to create the organization are not lost to it forever. Some founders also have played other valuable volunteer leadership roles at the nonprofits they founded, serving as passionate spokespeople, visionary thinkers, editors, or whatever role best served their particular area of expertise.

The nonprofit sector can't afford to lose the energy, talents, and vision of the leaders who have founded successful organizations. But it is essential that we recognize the symptoms of founderitis in its early stages, meet this challenge head on, and turn potential crises into assured opportunities.

Author Link: Maryll Kleibrink, CFRE, is the director of development at the Center for Health, Environment, and Justice in Falls Church, Virginia. She can be reached at 703-237-2249.

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