Founder Transitions: 6 Things You Need to Know From a Founder

I recently coached a non-profit executive about two years away from an impending transition out of her non-profit organization.  After understanding structurally where the organization was at and how she envisioned her exit, there was a part of me that wanted to yell, “Are you f*&%ing crazy?  You can’t do that!”  However, being the refined coach that I am, ;) I was able to maneuver with grace and ease through the conversation and drop some knowledge on the matter.  I was surprised, actually, at how much knowledge I had acquired around transitions.  I decided to take off my coaching hat (which allows me to view the client as the expert of his or her own life) and drop some hardcore advice.  Really, I just wanted to see my client avoid the pitfalls and be as successful as she could be during the transition out of her organization.

Thinking more about our conversation inspired me to write this post.  Below are 6 things I think you REALLY need to know about Founder transitions.  I always tell my clients that transitions can either be well thought out and smooth with sufficient planning.  The opposite outcome is that the shit can hit the fan and force the transition.  And then there’s the happy medium of in between.  No matter what path you face on your transition, I hope these points can serve to help make it smoother and more productive for all involved. 

1.  Get Clear on Where YOU Stand First   

Remember that 80’s song by The Clash called ‘Should I Stay or Should I Go’?

Should I stay or should I go now?
Should I stay or should I go now?
If I go there will be trouble
An' if I stay it will be double
So come on and let me know…

This indecision's buggin' me (Indecisión me molesta)
If you don't want me, set me free (Si no me quieres, librame)
Exactly whom I'm supposed to be (Dime! ¿Qué tengo ser?)
Don't you know which clothes even fit me? (¿Sabes que ropa me quedar?)
Come on and let me know (Pero tienes que decir)
Should I cool it or should I blow? (¿Me debo ir o quedarme?)

If you find that those lyrics really resonate with you, you know what it feels like to be a Founder in transition.  Continue reading below, por favor.

When longtime Founders leave, there is no doubt that their absence affects the energy of the entire organization.  A big question to consider is what will happen to your business or organization when you leave.  Your options are to sell, merge, be acquired by a larger business or organization, hire a new leader or to close.  These are the options for all businesses.  Yet one of the most important things to do is to get clear first on what YOU want for yourself.

Once you are clear, you will be that much more effective in creating a plan and path forward.  If you aren’t clear, it will likely throw everyone else around you off, and for some personality types, the ambiguity can be extremely uncomfortable.  So, do your research and know what direction you want to take first – WHEN do you want to transition?  WHAT do you want your relationship to the organization or business to be, if anything?  HOW will this happen?  You’ll be surprised by how much having clarity for yourself will help move the process forward for everyone involved.

2.  Create a New Generation

Remember that old Pepsi brand motto:  “Pepsi, the Choice of a New Generation”? Well, replace “Pepsi” with your business or organization name and that’s what we’re going for here!

The biggest thing you can set up for your business or organization preceding your exit is a generation of leadership and followers of your organization’s brand for which YOU don’t matter.  What you’re going for is Casper the friendly ghost; you want to get to the point where you are just a shadow of a presence in all things related to the running of the ship.  It’s as if you can step away and you’re irrelevant to the cause because nobody really knew you in the first place.  In other words, relationships and getting business (or grants or whatever) are not solely dependent on you, Casper. 

After 10 years running my organization, I took a sabbatical for a few months.  When I got home, I looked around and there were new volunteers, some new donors that knew very little about me and there were new clients that had relationships with the rest of the staff irrespective of me.  Sometimes, Founders take sabbaticals precisely to force organizations to build capacity to operate more independently without them.  For me, going away was the best thing I did for the organization; it forced it to start operating dependent only on mission - a more social justice aligned way of operating - and less on individual, charismatic leadership, - a more capitalist, business-centric philosophy of leadership. However, it may be different for you, depending on whether you are in for-profit, are an entrepreneur, have investors, etc

A colleague of mine founded and left her non-profit organization to a successor.  About 2 years after her exit, her husband went to one of the organization’s events and introduced himself as the Founder’s husband.  Everyone mistook him for one of the current leader’s husband, because nobody knew who the Founder was.  It was the best feeling for him and my colleague to be totally anonymous, after years of putting everything into the organization.  See?  The Casper principal applies to spouses, too!

In short, what you want to do is find ways to start stepping back while still keeping your vigilance, and allow people to enter the enterprise or organization without having to touch you, or know about you.  Start to spread your relationships out among staff, and if appropriate, the board.  Think about leaving a lasting philosophy rather than a permanent presence.  Create a new generation of supporters, customers and followers loyal to the BRAND and not to you. 

3.  Don’t Always be the PR Face 

As part of building a new generation, you will need to build others as the spokespeople for your business or organization.  For larger organizations with division heads, this may be easy to do.  However, if you have just one ship, chances are, things are funneling to you.

 As a Founder, you are always going to be a human interest story.  Don’t ask me why – the media loves Founder stories, especially if it’s the “was an underdog and found success” flavored narrative.  Enough!  Now, try to make your clients’ success the front of your PR.  This will help with the impending transition.

Identify other key staff people or board members whom you can point PR towards when being interviewed for the news or other publications.  If I could give you one piece of radical Founder advice it is this: if you are serious about leaving, don’t do ANY PR during your last year with the enterprise.  See how it feels, and see what other leadership and capacity emerges within the organization if you don’t do it. 

Note: the above advice doesn’t hold if you plan on transitioning into more of a branding role for the organization where you are positioned as a high level, critical thinker still affiliated with the organization.  This is also a model I have seen some Founders follow, as the business world thinks that sometimes the enterprise does better to have the Founder still affiliated with it.  If this is the case, you can be used very strategically to continue to forward the mission or business of the organization and remain the steward of some key relationships. 

4.  Make a Case for the Individual vs. Collective Good

This point especially applies to non-profit or social justice organizations.  One of the challenges these organizations face when they have a very corporate board is the lens with which the board views leadership.  Expect folks more attuned to a corporate model to view the CEO as the most important figurehead.  This is largely the model in start-up businesses where the board and investors sees themselves as essentially investing in the entrepreneur or Founder and, in some cases, the founding team.  While this is one model of leadership largely originating from market-based business models, it can be at odds with a non-profit that seeks a more collective culture and membership.  You can guide people through this friction, but it will take thoughtful narratives to carry people forward. 

You see, the problem arises when leadership fails to walk the board or team through understanding the nuances of different models of leadership, offering them a narrative of why leadership should start to become more collective vs. individualized for social impact organizations.  This may be hard for some folks to wrap their head around, as studies show that the brain is more prejudiced against things it cannot process or understand.  If the concept is a bit alien to your board members or team members, don’t expect them to have well-defined neural patterns to understand it.  They will always be prejudiced to their way.  So expect pushback.

I’ve seen non-profit executives especially pull their hair out struggling with a corporate board.  Sometimes, it is an issue of the executive not knowing how to craft a narrative that can bring the members along and reconcile conflicting value systems, or offer a logical framework as to why the organization is better off with such a value system.  Often, transitioning the board is about transitioning them to seeing your value system when it might be at odds with what they are used to.  If you want to be a skilled executive leader, you will need a narrative for this to guide the team forward without alienating the board. 

5.  Be Prepared for Founder’s Syndrome

It sounds like a disease, I know.  The good news is that it’s not, really.  If you have Founder’s Syndrome, you simply cannot see the organization or business functioning without you.  It may keep you from leaving or making healthy changes in services to your mission.  Another characteristic of Founder’s Syndrome is that you might want everything your way.  In other words, you cannot healthily detach. 

Don’t worry – not every founder suffers from this syndrome.  But be warned:  In some cases, be prepared for OTHERS to have Founder’s Syndrome – to think that things cannot possibly go on without you at the helm, even when you are confident they can, or to not want to listen to anyone else unless they are the Founder.  In such cases, you can do things to bring these people along, but also expect that they may drop off in the process or after you leave.  Inevitably, they are tied to your brand because of their emotional connection to YOU vs. the emotional connection to the brand, and it creates a slippery slope again for building a sustainable business or organization.    

When I announced my executive transition from the organization I ran for 11 years, there certainly was a degree of mental “drop off” from some members of the Board.  The thinking is, “if this leader is out, so am I”.  It’s not out of malicious intent, but rather a tricky phenomenon of organizational psychology – the imminent losing of faith that happens in an organization when a Founder decides to depart and there is no clear successor.

It was at that point I learned the hard truth about Founder transitions:  sometimes people are there to support YOU and not necessarily the organization.  There is a saying in Organizational Psychology: People leave people.  They don’t leave organizations.  It can feel like a stab in the heart when you’ve invested so much in an idea or a business, and you just want to see the work outlive you.

It is important to recognize what kind of board you have.  Who would still be committed without you there?  Who would leave?  Who would be neutral?  These are all important things to consider with a transition.

Understand that people will go through several phases of denial, then acceptance, (and maybe never accepting) and may very well decide to move on.  Change is never linear and can involve a process of accepting and rejecting, accepting and rejecting. Others can have Founder’s Syndrome no matter what state the organization may be in. 

A colleague of mine who founded a national non-profit had a successor already identified and sufficient capital in the bank to run the organization.  She still had board members say, “we might as well close” upon hearing her plans to exit, as they believed that the work could not go on.  Unfortunately, what is often missing in transitions is envisioning how an org can be BETTER after the Founder.  Everyone defaults to envisioning the worst, the crumbling and instability.  Almost 5 years later, this particular organization is stronger and thriving with its new leader, perhaps the real hero in terms of making impact.  Founder’s Syndrome is more a function of emotional connection and ties others have to you, the leader.

6.  DON’T Follow the Textbooks

Just like people, each organization and business has it’s own personality, rhythm and lifecycle.  Each one is unique.  There is a history and ecosystem as to how and why they do their work and how they historically achieved results.  Applying textbook ways of thinking about HOW a transition should ideally happen can be detrimental to your transition, especially when you might be facing time and resource constraints.

And here’s where a bit of brain science comes in.  Process thinkers (this thinking occurs in the left hemisphere of the brain) may often be fixated on a way of doing something to the point where they are so rigid, their behavior actually produces divisions in their following.  On the other end of the spectrum, you don’t necessarily want to fly by the seat of your pants and just feel your way forward, either.  Ideally, you want to be able to have some structure, but take into consideration the uniqueness of the organization or business, and honor the opinions and ideas team members have about how this transition could effectively happen.

If your vision for how a transition happens doesn’t fit the textbook version, it’s OK.  Perhaps there aren’t enough resources to invest in an outside consultant, or perhaps the resources should be better spent on coaching for you and your team to figure out the best transition plan for the organization.  Founding boards often aren’t independent enough to steward a transition without you, so it’s important to gauge where the organization is at, and to make the transition appropriate to where people are in the process.  Textbook thinking can overshadow the brilliance, knowledge, know-how and intuitive pulse you may have on what it is going to take to lead the organization or business to its next level, and the type of vigilance it needs in a new leader.

Your intuition is a result of using the most integrated right and left hemispheres of your brain.  Feel your intuition early, and feel it fast.  Be open to the intuition of others as well.  You may have experienced board members who have watched transitions occur in their own careers and have a gut sense of what needs to happen.  Just because you don’t have a drawn out process for it, doesn’t mean you lack the knowledge of what the best move forward is for your enterprise or organization. 

To sum it up, get clear on what YOU want to do first, and then start acting from the perspective of sustainability by instilling a collective philosophy vs. thinking of yourself as the leader.  Build the capacity of others, understand that change can mean two steps forward and one step back, and always trust your intuition - it can mean the difference between a healthy and smooth and timely transition vs. one wrought with challenges and difficulty.     

Thank you to Jane Leu, Award-Winning Serial Social Entrepreneur and Founder of Upwardly Global and Smarter Good, for her input for this post.