Part 1 of Many:

One of the most challenging and important phases in the life-cycle of a founder-led business occurs when the organization has matured sufficiently to require the addition of new talent and the evolution of its operating approaches. 

There is a sizable body of literature on the challenges that  founders and their entrepreneurial team-members face in recognizing, accepting and facilitating the needed changes.  Many otherwise great organizations with brilliant ideas and founders do not navigate these waters successfully.  Some crash spectacularly, some wander aimlessly and a few succeed to evolve from start-up to significant. 

In my experience, one of the key differences between those that fail and those that succeed is visible in the founder’s willingness to embrace a more formalized strategy development process.  More formalized that is, than whatever is on the founder’s mind at the moment.

In defense of founders everywhere, the word "strategy" and the phrase "strategy process" conjure images of endless meetings, big consulting fees and painful powerpoint presentations supported by spiral bound documents destined to become shelf-ware.  A founder wants to grow a business and see their ideas turned into products and services that fulfill needs and make money.  The notion of taking their over-stretched associates out of the game for days at a time to debate "strategy" is counter-intuitive.  One brilliant founder of a small manufacturing firm remarked to me that, " the strategy is simple–we are going to double in size this year."  I love his optimism and the goal sounds fine, but respectfully, growth is not a strategy.

The addition of a formal strategy process to a founder-led organization is about helping the growing team to learn to think, talk and begin to plot direction for the future of the business.  This "strategy" dialog does not naturally occur in many entrepreneurial organizations, yet as the firm matures it is important to begin talking about next steps.  Too many great start-ups plateau after a few years and then enter a phase of stasis or decline because they have not figured out what to do for an encore after the original idea runs its course.   This risk is mitigated if the founder’s  top managers are comfortable and accountable for these types of discussions.   

The rigor of a Fortune 500 strategy process is not the appropriate prescription for the founder-led organization, but there are some universal questions that every team should ask itself as it evaluates options for the future.  (I will highlight these questions in detail in an upcoming posting.)  The willingness of the founder to engage his or her team in this type of discussion and to sustain the discussion, generate actions and begin to move forward, has a tremendous impact on the working environment.  Alternatively, the failure of the founder to pursue this path results in a team that is highly tactical and overly dependent upon the founder for direction. 

Some important caveats to the notion to this idea of instilling a strategy process in the founder-led organization.  While the process may feel to the founder like "letting go" or "losing control," it’s not–it’s about helping the management team develop.  Also, the founder does not cede the ownership of the vision and mission of the firm to the tyranny of a management team.  Vision and mission and ultimately the key decisions around direction and funding and risk remain squarely on the shoulders of the founder.

Next–The Universal Questions Every Business Should Ask Itself.