Lee Cohn and I find our client base is populated by Founder run companies. And given that we were Founders as well, we bring an insider’s view and perspective. With that said, we have found that Founders reach an inflection point in their life and the life of their companies which triggers a series of actions labeled what do I do now.

In this White Board (thanks Neil Naroff for the name) we will address the dilemma that accompanies growth and often survival. Usually, a Founder rarely envisions a company as large as they have created. It just happens over time. As the company grows, the key people that are part of that growth were servers, cooks, dishwashers and the like. Each person often exceeds what their life vision as with the Founder. The result is an extremely loyal group who have weathered all the ups and downs of the business.

The Brand’s key people usually know the company very well, but their experience is limited to that company. Making the changes that must happen organizationally and have the ability to leverage purchasing, understanding marketing and the verdammte financial part of the equation is a hill that is hard climb. Remember, the lead financial person was a server who had a bookkeeping background.

The organization usually becomes one where Mary may have the responsibility but George along with Sally have helped her for years. Literally, collectively they do the job. All this makes Mary and team responsible but not accountable.

As the company grows, it’s demands exceeds the ability of the various folks in a “Mary” type position. BUT Mary has always been loyal and working at the company for 10 years. Here is the second of the dilemmas, loyalty versus performance.

The two, responsible but not accountable and loyalty versus performance are linked and somewhat inseparable. The only solution is change. What does one change and how and when does that change happen? This where the Founder must make decisions about what she/he wants to do going forward. Is she/he ready to make the difficult and often emotionally charged changes. Often, the change starts at the top, a new CEO. This works if the Founder can relinquish control and throne. This decision requires careful self-examination by the Founder of his/her skills and abilities. Whatever decision is made, the passion for the Brand must not diminish because passion is often the culture. The other smart first change is to bring in an experienced CFO. With that said, some of the loyal folks will need to go but not an upheaval. Replace and/or re-purpose are strong and good words when in the middle of the storm of change.

The storm rains down on the company when there is not a good and achievable strategic plan in place. A mentor gave me this phrase early in my career, words drive actions and actions produce results measured by numbers. As the Cheshire Cat said in Alice in Wonderland: “if you don’t know where you are going, any path will do”.

When the Founder has spent time considering the path and is unwilling to make the necessary changes then the options are limited. Wait and see Founder’s Dilemma Part 2.

What Lee Cohn and Wallace Hite do is to come alongside the Founder as she/he works through this dilemma. We are able to reconstruct the organization, its finances and mission.