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Fighting Founder’s Syndrome

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Jeffrey Sonnenfeld, Senior Associate Dean of the Yale School of Management, did a great piece in the Washington Post this weekend on Facebook’s challenges with a Founder/CEO.  He points out that good governance practices often go out the window, and directors kow-tow to the mystical leader, when a founder is at the helm of a company. Public and private companies are not alone in having leadership challenges—or what I call “founder’s syndrome.”

Many nonprofits have also been created by visionary leaders, and have the same challenges Facebook may–like boards of directors who aren’t willing to stand up to the founder, or even at some point look for new leadership.

There are ways to avoid this dynamic.

A Diverse Board.  Facebook’s board is all-male.  Don’t make the same mistake. A diverse board, though, is not just gender or race diverse. It should be age-diverse and made up not only of donors, but of people from the communities the organization serves. It should also include several individuals from related institutions (perhaps in other states), who can lend relevant expertise.

Free-Thinking Leadership. Board leaders are often hand-picked by the Executive, so that they get along well together. This is great. But more important is leaders who can speak their mind to the Executive and be sure all ideas and options are on the table.

Financial Compliance. It’s not uncommon for nonprofits still being led by their founders to have some squishy numbers in the books. An Audit Committee—separate from the Finance Committee—should oversee an annual audit process that follows current accounting standards.  Independent Sector offers a checklist for accountability that includes these standards.

Mission-Driven Decisionmaking. At the end of the day, every board and leadership decision should meet this simple litmus test “Does this further our mission?”  It sounds easy, but sometimes Founder-led organizations can get sidetracked with pet projects of the founder, or conversely, projects the founder doesn’t find particularly interesting but need to be done to move the mission forward.

Succession Planning. Every business owner needs to do it. So do nonprofit organization founders. It’s a conversation that needs to be had with the board, with real plans and timelines drawn up on paper so everyone knows what role the founder will play and how the organization will continue to succeed after he or she retires.  Consider planning for an Interim Executive for 18 months after the founder leaves. No one can match the zeal and history of the founder, and a leader who is experienced in helping organizations make transitions can be just the right person to bridge to your next visionary.