Tony’s business grew steadily after he developed a popular software solution for the restaurant industry. He’s added a couple of new apps and set his sights on expanding into the hotel sector. But despite his success, Tony began suffering from “Founder’s Syndrome” – a typical ailment of new entrepreneurs. Fortunately, it is curable.
The main symptom of Founder’s Syndrome is that you – the founder – make most of the decisions. But when you’re making all the strategic choices for your company, sooner or later you’ll hit a wall.
Tony, for example, hit that wall. He works 12-14 hours a day and most weekends because he’s trying to manage every aspect of the business himself. He insists on making all the decisions because that way, he stays in control. This one-person approach to running his business means he’s swamped with daily operation challenges and customer demands. Even though he’d hired staff to assist him, they all work under his direction and according to his vision for the company.
If Tony doesn’t take steps to change the way he runs his business as he moves forward, he’ll stay stuck as a one-product company until the competition puts him out of business.
Five Stages of Business Evolution
Is there hope for Tony? Yes, but first he needs to understand the five stages of evolution entrepreneurs go through. Right now, Tony is in start-up mode (the one-person band). This is when the business is struggling for existence with an attempt to gain customers and deliver products and services on time, while making a profit. Every entrepreneur must start here. But it’s not okay to stay here.
The evolution is as follows:
- Stage 1: The One-Person Band
- Stage 2: Early Success
- Stage 3: Growing Pains
- Stage 4: People Crunch
- Stage 5: Corporation
In stage one, entrepreneurs are like players on the team. They are hands-on experts who work hard to accomplish the tasks assigned to them. But founders must eventually let go of being a player and move towards being a coach. This means more than just delegating tasks; it means leading.
To get past stage one, Tony needs to develop his team members and hire for a different kind of companies. He needs employees ready to both execute and think independently. For example, having an account manager is not enough. He now needs a Financial Manager or CFO. In addition to sales persons, Tony also needs a sales manager. And he needs to bring IT support in house.
Once Tony is able to hand over responsibilities (including decision making) to these managers, his role will be to guide and support them through the next three stages of growth.
Adding Systems and Infrastructure
Until now, Tony’s been focused on sales and operations. But if the company is going to grow, he needs systems and administrative support to handle the “minutia” of running a business, day-by-day. Administrative support will free Tony up to do critical planning and strategy for his company. Over the long term, good systems and infrastructures will lead to higher profits.
The final element is the company’s personality. In stage one, that’s Tony. He’s the one who solves the problems, and he’s the one customers know and trust. As the company grows, Tony needs to start building its brand in a more professional and consistent manner. This means taking steps to develop its own goodwill separate from the owner or founder.
Is Tony Cured?
Will Tony’s company make it? I believe so. As long as he is willing to listen, share at least some of the decision-making, and invest in infrastructure, he’ll ultimately graduate from being a player to being a coach and leader. It won’t be an easy transition, but unlike many, if he keeps his eye on the stages of growth and understands both the challenges and opportunities in each phase he won’t get "stuck" along the way.
In other words, he’ll recover from Founders Syndrome and then watch his company grow and prosper!
For more practical advice for entrepreneurs, general managers, and CEOs on how to manage successfully through the stages of growth and build a profitable and prosperous company, check out my new book MAVERICK LEADERSHIP. Click here for a short video and a complimentary review of one chapter.