Vision Quest
Executive Forum
Line of Succession
A Time to Lead
Companies often grow up with their original founders, maturing and stabilizing as these people move from hungry, risk-taking entrepreneurs to corporate stalwarts. But what happens when companies built on their founder’s vision face the difficulty of continuing without them? How do businesses prepare themselves for this inevitable challenge?
The answer is not simple and certainly not easy to achieve, but whether you are a big brand like Apple, facing the prospect of a brand without Steve Jobs, or a smaller-scale brand facing the same predicament, the same rules and tactics apply. Below are some tips on how to ensure a seamless transition.
1. Focus on institutionalizing the qualities of the founder into the brand.
Even before the resignation of the visionary and founder of the company, businesses should be aware of the risks that come with this type of relationship. They should be focusing less on the owner and more on the franchise. In particular, they should be considering how to harness the power and energy of the founder and institutionalize this force using a range of systems: target behaviors, ideation processes, and strategic planning imperatives.
By definition, founder-originated startups start small and get bigger. The challenge, in general for these businesses is to mature and stabilize. At the beginning, the founder does everything—hiring, firing, buying the computers, negotiating the rent, designing the corporate logo, and winning those crucial early deals. Over time, systems and processes enter to manage the volume of decisions and activity within the business—ordering systems, teams of people, agencies machinery, an accountant.
Weaving the spirit of the founder throughout the business enables it to live on indefinitely. It is a matter of de-risking the organization and making sure that it is less dependent on a single, critical factor.
2. Look to leading brands for guidance.
Not sure how a founders’ spirit can be harnessed and institutionalized into the business? Take a cue from Virgin—the all-singing, all-dancing visual and verbal corollary of Richard Branson. While Branson’s adventurous spirit and schoolboy charm certainly dictated Virgin’s direction, the brand now has an irreverent and quirky voice, feel, and look all its own.
The same can be said of Zappos, a brand that is continually praised for its highly motivated and satisfied workforce, impeccable customer service, and unique work culture. Its founder, Tony Hsieh, has built the brand around his fundamental belief that “everyone’s a little weird somehow.” As a result, he’s allowed his employees' true personalities to shine in the workplace, building a culture around them—and this belief—rather than himself. Indeed, while the world may know about Zappos and its quirky culture, they might not be as familiar with the name of the man behind it.
Fashion brands succeed here too. Yves Saint Laurent died in 2008, but his hallmarks live on in the aesthetic principles enshrined in the brand that survives him.
3. Get professional help.
Creating a strong and stable brand like the ones above is possible, but it isn’t easy. Even the greatest poets struggle to put their finger on what makes a person a mover and a shaker. Is it their restlessness, their inventiveness, their impatience, or their sheer aggression that makes the difference? Identifying what underpins the founder’s power and codifying this effectively is a daunting challenge for any organization, which is why getting professional help is advised.
4. Make sure your key investors understand that your company is built around your founder’s personal value set—not your founder.
It is important to note that while achieving the feats of Virgin, Zappos, and Yves Saint Laurent is a challenge for any brand, it can be particularly difficult for smaller businesses. (After all, this is often why, in M&A deals, the founder is required to stay on as part of the deal.) That’s why it is so important to convince a few key investors that the company is built around the personal value set of the founder and is strong enough to exist without them. This means constant attention and focus to communicating progress on succession-planning approaches, the implementation of systems, and general diversification.
5. Pick a successor who “gets” the brand.
Unfortunately, even brands that appeared to have a crystal-clear mission statement have failed in the transition from founder to successor. Take, for example, Starbucks, which went astray after founder Howard Schultz left. Schultz’s return only a few years later to restore the company’s focus on great coffee and service, rather than expansion, reveals the risks that are inherent to brands of this type. As Starbucks demonstrates, it isn’t just critical to get the brand positioning right, but also critical to ensure that whoever is placed next in charge understands the positioning on a profound level. That may very well be why the brand’s that have had the best track record immediately after their founder’s absence—Disney, Ford, and Heinz, for example—have been taken over by the founder’s family members.
6. As a marketer, understand that de-risking a business of this type is always going to be an upward battle.
While vital to the long-term life of a business, not many successful and active founders want to take a back seat to stabilize their stock price. For these people, the allure of showing off their new products and big ideas is why they started in the first place. Who was going to tell Steve Jobs to get off the stage for the sake of the investors managing his pension? Expect to counter resistance in this area—and continue to look to professional aid and the support of investors to help you through it.
Conclusion: Overall, brands that rely heavily on their founders need to be aware of the huge risks that come with the territory and understand that their investors are likely aware of it too. That’s why it is so important for all businesses of this nature to make sure that the owner’s personal value set has been integrated into the brand ahead of time—and to pick a successor who will ensure that it lives on when that pivotal moment arrives.
Julian Dailly is Director of Brand Valuation at Interbrand London.
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