If this is your reality right now, what do you do?

Written by Richard Sterling , Partner at AltoPartners Australia

In executive search, especially when it’s in the vibrant tech sector, many assignments revolve around replacing the Founder CEO. At times this is done with the co-operation of the Founder CEO and other times it’s done on a hush hush basis.

?Founder CEO doesn’t always translate into effective leadership. Some Founder CEOs will make the transition to becoming fantastic leaders and many will not.

?Researchers from Vanderbilt and Harvard universities examined data collected from 13,000 companies in 32 countries. The study revealed that Founder-run companies are less productive and more often poorly managed than those whose CEO didn’t start the firm. It also revealed that:

?Founder CEOs were less productive, on average and had consistently lower management scores - which typically rose once the founder-CEO was replaced.

?Investors typically didn’t want to invest in companies too heavily dependent on a single individual and often insisted on an external CEO as a condition of funding.

?The traits and talents necessary to conceive and launch a product or service are often very different to those that help a business to grow.

?Founders’ poor success rate as CEOs is a result of the kind of personality traits that’s compelled to start a company in the first place these include on the fly decision making, less transparent management practices and nepotistic hiring.

As the board of a company with a Founder CEO what do you do once you recognise that these research findings have become your reality?

?Is goodbye the only answer??

?What are the other options?

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