Founder Fever - An Australian Perspective

It could be the original founder of the organisation or it could be the person who took over from the founder or could just be someone who has been there a very, very long time. How do they know when it is time to step up or leave? Is it Founder Fever?

Our expert opinion is from Steven Bowman the director of LifeMastery and the Conscious-Governance.com, an online resource based in Melbourne who discusses "Founder Fever" as strategic risk – with an Australian perspective – and some strategies to help move forward.

Bowman writes:

These people were at one stage a great gift to their organisation, but may have passed their use by date for that organisation. How do we recognize when this has occurred, and what can we do about it?

The term Founders Syndrome has been used extensively in the literature (mainly in the USA), however we have found it is not really a syndrome, but more like a fever that infects people all around the founder, as well as the founder themselves. Hence the term "Founder Fever".

Founder Fever occurs when the founder or someone in a similar position is oblivious to what is really happening around them, where they become protective and sensitive, and are unwilling to change their point of view on just about anything.

Often plans are not implemented unless they were devised by that person. Money keeps running out. The organisation lurches from one crisis to another. No one really seems to know what’s going on, and people become afraid of the founder. There is usually a toxic, stressful environment where Board and staff members quickly come and just as quickly go. Everyone has caught the Founder fever, and it is not particularly healthy or enjoyable.

I will relate two stories, each at opposite ends of the spectrum, that illustrate some of the issues related to Founder Fever.

The first story concerns the founding member of a major charitable institution established to honour the work of a family member.

This person, whilst not the chair of the Board, was seen by all as the true founder. He asked to spend time with me discussing an issue that was increasingly keeping him up at night with worry. He stated that he was very concerned that he might be suffering from Founder Fever, and how would he know if that was occurring. His greatest fear was that he would hold the organization back, and not even be aware of it. He was unsure what to do to ensure that the organization would be true to its original vision, and stated that only when the organisation truly "got" his vision , would he truly be willing to let go and step back. At the same time, he also recognised that he could be one of the greatest strategic risks of the organisation without even realizing it.

The second story concerns a CEO who discussed with us the various options available to assist the Founding Chairman of the CEO’s organisation to make different choices. The founding Chairman of this regional organisation had been honored at governmental and professional levels for the work she had done 15 years previously. She had, on numerous occasions, stated that she might be willing to eventually step down from the Chair position. Her actions, however, belied that statement. She would take every opportunity to shore up support from her community connections, which in a regional centre were very powerful. She would make a statement that indicated a transfer of position might occur, then construct a "crisis" that only she could handle and renege on any handover arrangements. You were either with her or against her (and that was never a pleasant experience). This had been going on for 5 years! The staff were demoralized, the Board were at their wits end, and the CEO got to the stage where it was either her or him (usually not a good career move). The founder was unable to even consider that she might be a major strategic risk to the organisation.

These two stories illustrate the extremes of Founder Fever. One where awareness is evident but a level of uncertainty about how to deal with the situation. The other where there was total unawareness and the systematic creation of a toxic environment within the organization.

(See the Footnotes for the outcomes from both these organizations.)

Here are some strategies that can be implemented, either from the inception of a new organisation (so Founder Fever doesn’t take hold and become pandemic) or to alleviate an existing bout of Founder Fever.

Look very closely at your situation, and choose a few strategies that will work for your organisation. It is a good idea to choose some strategies from each of the three categories listed below: Performance Management, Strategy and Risk Management, Structural Management, and Perception Management. Personally, I would choose all of them.

Performance management strategies
Develop high expectations from the beginning. The high expectations of the Board should be presented and discussed with every Board member and made clear to any potential Board member before they are appointed or elected. This can be done through a Board Charter, or Standards of Behaviour document. If the Board member is then not meeting these expectations, they are counseled and invited to change or resign. (Go to http://www.conscious-governance.com/boardcharter.html for Board Charter example>>>> and http://www.conscious-governance.com/support-files/modelstandardsdirectors.pdf for Standards of Behaviour example>>>>
Create a Governance committee. Develop a Governance (or CEO/Board Evaluation) committee of the Board. It is common for the Chair to be on this Committee, but it may not be appropriate for the Founder to Chair this committee. This committee is responsible for both the Board and CEO succession planning, performance management, and evaluation. These responsibilities should not be vested in the Chair alone. This is the forum for asking a Director to resign because of non-performance issues. (Go to http://www.conscious-governance.com/board-subcommitee.html for a Sample Charter for this committee of the Board
Annual Board evaluation. Conduct Board evaluations, where Directors rate themselves, the Board and their fellow Directors. This helps hugely in identifying non-performing Directors, and presents the opportunity to provide peer advice to that Director. You can also ask fellow Directors the question "Should this Director be encouraged to seek another term on the Board". These individual results can then be discussed with the concerned Director by the Chair or the Governance Committee. It is not unknown for non-performing Directors to resign rather than be subject to a Board evaluation process. (Go to http://www.conscious-governance.com/evaluations.html for an article on The Problem with Board Evaluations)
Personal Goal setting. Ask each Director to write down their two or three personal goals for the upcoming year, and how they will enhance the work of the Board. The Chair or the Governance Committee can then review these personal goals every six months with the Director concerned.

Strategy and Risk management strategies
Strategic Planning. Ensure that the organization develops a robust strategic plan, and then embed that into the work of the organization. Restructure the Board agenda so it reflects the key elements of the strategic plan. This keeps the Board focused on those key areas that the Board has responsibility for, and assists in strategic decision making. Recast all reports from CEO, staff and committees so they directly relate back to the strategic plan, identify the key strategic issues and discussion points, and make recommendations or provide ranges of options. Go to http://www.conscious-governance.com/productstoreebooks.html for some great resources on strategy and risk)
Risk Management scenarios. Develop risk management scenarios to explore what would happen if the founder suddenly left the organization. Who will/can quickly step in? What stakeholders must be contacted? Where are the files/records? Involve the founder in these scenario plans
Succession Planning. Create a succession plan that proactively deals with all the things the Founder (or the Board) is concerned might happen when the Founder and other key leaders leave. The whole point behind a succession plan is that you plan for succession, before it is required! The best time to develop a succession plan is when it is not needed! (Go to http://www.conscious-governance.com/conscious-ceo.html for articles on this subject)

Structural management
Term limits. Many organisations have specified term limits for Board Directors with the aim to diminish the concentration of power in a small number of individuals and to weed out inactive or difficult board members. These term limits are usually 2x2x2 (total of 6 years) or 3x3x3 (total of 9 years). Some have separate term limits for Officer positions (Chair, Treasurer etc) which effectively extends the possible terms. Be very clear, however, that term limits don’t automatically guarantee that Board members, including Founders, will get to serve each and every term possible under term limit rules. It’s not an entitlement. Therefore, if the Governance Committee doesn’t feel that someone who is coming up for re-appointment to a second or third term is the right "fit", they can recommend that the Board member be thanked for their service and be encouraged to not nominate for re-election. Some organisations include a clause that specifies time limits, with an extra sentence that states something like "or as otherwise decided by the Board", to allow high performing Board members to remain.
Constitution. Most constitutions have a clause that specifies the conditions under which a Director is deemed to have resigned or is required to resign.

These include provisions such as:
– Being absent from three Board meetings consecutively without the approval of the Board,
– Becoming of unsound mind,
– Failing to declare an interest in a contract with the company,
– Holding any other office of profit under the company (except that of managing director) without the consent of the company in general meeting,
– Being automatically disqualified from managing a corporation due to, for example, being convicted of an offence relating to the business or financial standing of the company;
– Being disqualified by the regulator or being disqualified via a court order ,
– Becoming bankrupt;
– Removal by resolution in a general meeting;
– or Death

In Australia, members can remove a director by resolution but the board or other directors cannot remove a director. In the USA, it is possible to have clauses that specify the conditions under which the Board can remove Directors. It is slightly different in each country, and you need to study the specific legislative details for this area.

In-camera session of Board meeting. Develop in-camera sessions of the Board, where the Board meet without any staff, and performance management of a particular Director, including the founder, can be discussed without staff present. These are often every two or three Board meetings, often at the end of the meeting.

Perception Management
Codify the vision and values. Founders often have a vision for the organization, which they are concerned will be lost if they are not around to "keep an eye on things". One of the most powerful strategic focusing tools that your organization can create is a formal Vision statement. A Vision statement is an expression of what your organization would like to see as a possibility and a future for the community and stakeholders you serve. Having created the Vision statement, then all decisions, projects and services can be filtered through the vision statement to assess whether they are truly "Vision-driven" and hence creating the future and the impact that your organization desires. This should provide some comfort to the Founder that the agreed vision for the organization is actually embedded into all functions of the organization, and will outlast the tenure of the Founder.
Board education on role of Board Conduct regular Board education sessions where the Board explores the contemporary role of the Board. Align this with the Board evaluation process. Encourage robust discussion on the role of the Founder. Use this article as a thought starter!
Create Advisory Committee/Council. (eg historian, policy advisory group) This possibility is offered to a Founder who has done a great job in the past, but no longer has the skills to provide what the organization needs today. They are still part of the loop of relevant information, and are treated as "special", because they are. The key here is that once they voluntarily step down from the Board, they are given a meaningful role.
Develop Patron position. This is often used to recognize a Founder, or someone who has been influential in the formation and direction of the organization, but who is no longer suitable for a Board position. Some organizations have created the position of "Life Ambassador" or similar title, in recognition of the outstanding contribution that person has made.
Skills analysis for re-election. This strategy is good practice whether you have a non-performing Board member or not. Identify the skills that the Board requires over the next three years, ask each Director coming up for election or re-election to provide a short summary of how they meet these skills, and provide these summaries to those who vote for the Director positions, with details on what skills the Board requires. Click here http://www.conscious-governance.com/governance.html for a sample skills analysis template>>>>
Celebrate the gifts and successes of the founder who is leaving. Honour "the legacy" whether so named or not. This is a vital part of caring for the founder and smoothing the way for transition.

Footnote
Story 1: The Founder has instigated a Board evaluation process and ongoing Board education, with the overt recognition that it is the Board’s responsibility to assess each Board member individually, and provide feedback to any nonperforming Board member. The expectation is that Board member would either step up, or leave.

Story 2: The Founding Chairman stepped down after the Board consolidated their position on whether she should stay or not. The Board chose a new Chairman (who was not cowed by the possibility of a social backlash), and offered the founder both recognition and honor for the work she had done. She accepted.

Steven Bowman is a director of LifeMastery and the Conscious-Governance.com online resources, based in Melbourne, Australia. He is sought after by Not for Profits globally as an expert adviser on conscious leadership, governance, strategic innovation, and awakening the power of strategic awareness within Not for Profit organisations. www.conscious-governance.com, steven@conscious-governance.com
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