One of the main areas of focus in my client work is getting clients to realize that their business isn’t a plaything.
Working with entrepreneurs for many years I’ve seen too many of them stagnate their growth or slowly disintegrate the company all because their egos were inextricable from daily operations. To put it bluntly, they treated their businesses like it was a toy.
One day they want to play with it one way and then the next day they want to play with it another. It makes them feel good temporarily, but as with all cheap and transient pleasures it comes with lots of negative effects.
Growth stagnates. The entrepreneur has to work overtime every week. Employee turnover is high. Any systems in the company are barely functional and need constant effort from the entrepreneur to keep the company going.
This is called The Founder’s Trap.
The trap isn’t exclusive to founders. It occurs in people who buy businesses, too, but rarely. The person who buys a business who gets trapped tends to do so because of the fear of loss of their investment. With the founder(s) the fear is loss of identity.
What I’ve witnessed through working with and talking with hundreds of entrepreneurs is that they like the idea of having a smoothly running company, but they panic when they realize they are getting closer and closer to not being needed by their company any longer. My clients hire me to help them fix their company so they can get more time, income and freedom. To give them these things they must subtract themselves from each job they perform in the company. But the more they subtract themselves and the closer they get to the freedom they desire, a crisis of identity occurs.
To understand this identity crisis, we need to understand the genesis of their identity as an entrepreneur.
The entrepreneur, specifically the founder, took an idea and manifested it into reality. This is a crazy, heady experience. Fireworks go off in your soul when that first sale comes in. The founder just gave life to a thought. The harder the struggle to breathe life into an idea the more the founding of it becomes tied to the entrepreneur’s identity.
“This company wouldn’t exist if it wasn’t for me,” thinks the entrepreneur.
No matter how true that thought is, it becomes a destructive force if the entrepreneur refuses to grow up as the company grows. Unfortunately, most entrepreneurs don’t grow up. They think since they created the company and own the company that they can do anything they want with it and if someone doesn’t like it they can just leave. This mentality can be a good thing in the early stages because startups need a driven, sometimes egomaniacal, founder to get it to sustainability. However, at some point a company needs professional management to get to its next stage of growth. If the founder is still thinking, “me, me, me; mine, mine, mine” then the company and the people in it can’t grow to their potential.
The founder becomes trapped by his own identity as the “creator” and his childish possessiveness.
An example of this can be seen when the founder steps over his own managers to assign tasks to “his” employees.
The founder has a presentation to give and he knows that Steve, the company’s designer, can do really cool slide decks. So, the founder sends Steve a message saying he needs the presentation done by Friday — it’s Tuesday afternoon. Steve is now in a panic. He has to complete the final revisions on the designs for a new product by Friday, too.
Steve the designer is in a no-win situation. If he does what the founder wants, he won’t get the designs done that his boss, the project manager, assigned to him. He can’t say no to either one or he risks getting a poor performance review. So Steve the designer works on into the evening the rest of week to accomplish both assignments. This causes Steve to miss his daughter’s dance recital, which he promised his daughter he would be at.
This isn’t the first time this has happened to Steve and he is pissed and resentful. Steve spends the weekend updating his LinkedIn profile and sending out his resume.
The founder thinks that all employees in the company are his employees. He believes they all work for him. He feels they must serve his wants.
In a professionally managed company, the founder would go to Steve’s manager and see about getting the presentation assigned to Steve. The founder would have learned that Steve had more important work that had to get done that week. The manager could choose to assign the presentation to another employee or help the founder outsource the presentation to a contractor.
The professionally managed company continues to grow — all projects get done according to their priority, employee turnover is low because they feel respected and aren’t overworked, and the founder still feels like an important part of the company. When the entrepreneur escapes the Founder’s Trap and steps into the role of executive, he knows that he and all the people in the company work for the business and they are there to serve the needs of the company.
Switching from founder to executive (and eventually owner) is a big transition. The entrepreneur must give up the “creator identity” and the “driving force identity.” He must assume the more mature identity of executive where the employees and customers are the driving force for the growth of the company. As executive he provides a vision of where the company is growing and going instead of living in the past as the creator of the business.
Are you still treating your business as your personal plaything or are you maturing into executive and leader your company needs?