When Being A Visionary Founder Is Not Enough

When Being A Visionary Founder Is Not Enough

One of the hardest realizations for any founder is coming to conclusion that he has to make way if he wants to save his company. But making way does not mean leaving the company, but rather understanding that the sector has moved into a new era where competitive advantage has moved from just being a visionary, into having the capacity to execute, and run a business at scale.

Yes, you can be a visionary founder but that does not mean that you can be execution-oriented to compete when some of the elemental components that made you a star have diminished in your sector. As competition heats and sectors mature, gross margins drop. Most times, competitive advantage moves to having steely-hardened execution-oriented brilliant professional managers over fast-breaking visionary founders.

New research from a team of professors at the business schools of Duke, Vanderbilt, and Harvard universities finds that founder-run companies to be less productive and more poorly managed than those whose chief executives didn’t start the firm.

The researchers looked through data collected by the World Management Survey, a detailed review of more than 13,000 mid-to large-sized companies in 32 countries. Firms led by the people who founded them were 9.4% less productive, on average, and on average had consistently lower management scores—which typically rose once the founder-CEO was replaced.

“Founder CEOs were by far the worst type of CEO,” said Victor Bennett, an assistant professor of strategy at Duke’s Fuqua School of Business and a co-author of the paper.

The founder of Uber was a visionary founder but he was not a steely-hardened execution-oriented manager to manage a business in a maturing sector like e-hailing transportation. So, for Uber to thrive, where just breaking things fast was not the main advantage anymore, someone has to take over. We can say the same in Zenefits – a benefit management startup which grew under its founder until it hit a hard rock on growth execution.

When the visionary loses its scent, the founder should move to Executive Chairman position and hire a CEO with execution-oriented capabilities. Many founders do this when they realize that they perform better in the big picture phase over the daily rituals of running a business as a CEO. Jack Ma as Executive Chairman is shaping Alibaba Group even though he has handed over the operational keys to a CEO. In the last few years when Larry Ellison moved to the Chairman position, Oracle has transformed into a stronger innovating company, moving into cloud and blockchain at a faster pace.

In the next 5 years, the Nigerian fintech will enter that phase where just being a visionary founder may not help a startup. Yes, the competitiveness will come from having execution-oriented managers to steer the ship. Of course nothing stops one from being a visionary founder and a stellar manager at the same time: examples abound in the lives of Richard Branson (Virgin Atlantic), Aliko Dangote (Dangote Group) and Jeff Bezos (Amazon).


---Visit our Store for my books, cases, frameworks and more. Now, enjoy our consolidated subscription for all contents (past, present and future).
-- We offer Advisory Services (tech, strategy & Africa).

Share this post

Post Comment