How to get out of Founder's trap

©Ichak Adizes, Ph.D. 1971-2012

RFirst clientYoung girl



Kongo Gumi Construction/Osaka, Japan

Founded: 578 40th generation


Flexibility in selecting leaders Health, responsibility, talent for the job. Not always a son. Sons-in-law taking the family name

Masakazu Kongo

2007


Hoshi Ryokan

Innkeeping/Komatsu, Japan

Founded: 718

46th generation

Hotel for 450 people in 100 rooms.

Zengoro Hoshi is the current patriarch.


Fabbrica D' Armi Pietro Beretta S.p.A.

Firearms, 1526Brescia Italy


Kombinat im. Stepana Razina - 1795

Kamenskaja Paper-Board

Mill - 1799


DEVELOPING AGING

HIGH

LOW PRIME

FLEXIBILITY CONTROLLABILITY



Go-goFounder Trap

growing aging


Go-go Phase ProblemsNormal Problems

See endless opportunities A messy organization chart. Organized around people, not functions. Flexible direction Centralized leadership delegating tasks but not responsibility Lots of drive Too many priorities Equate more sales with success

8 companies


Go-go Phase Problems

Abnormal Problems

Arrogance No responsibilities assigned No reaction to change in direction No decision-making outside the leader or core group Decisions are reversed by the leader


Mergers and acquisitions

Courtship

Infancy

Go-go

Adolescence

Prime

Stable

Aristocracy

Early Bureaucracy

Bureaucracy

Death

growing aging


Ideal IS Ideal executive director

"Where did I find this loser?" "He is good, but for a son-in-law."

"He is good, but to take him fishing, to put a worm on a fishing hook."

“Everyone wants to be Cary Grant. Even I want to be Cary Grant”

Cary Grant.

Their solutions


They slowly adapt to sudden changes of organizational structure

I throw away to them, they cannot even see not to mention to catch

When I wake up at 2am I do not have anybody to call

What they say


This is not just your toy, 1000 families depend on it and earn their living in it

I do not talk on profit but to stay normal, otherwise I do not nee profit

What they get


Strategy

Structure

Style

Staffing

Plans & Goals

Rewards


StrategyFrom market share to profitability

Focus on core capabilities

Identify what not to do

State values

Opportunity drivenGo-go

Founder’sTrap


StructureBuild accountability

Create borders between the founder and the company

Structure around assignments and not people

Teach to play positions

Build a Board with outsiders

Avoid small companies

Build profit centers

Go-goFounder’sTrap


Short run

SalesMarketing

R&DProduction

FinanceAccounting

PersonalHRD

Strategicplanning

Short run Short run Long run Short run Short run


Personal

General manager

Sales

Marketing

Production

R&D Finance HRDPC Director

Short run Short run

Long run

Accounting

AdministrationAn organization should be structured by a genius, so that any idiot can run it.

Rather then strcutred by an idiot – so just a genius can run it.


Style

Mutual trust and respect by example

Build a complimentary team of P&A

Avoid the trap of “I am the Company”

Differentiate between personal and corporation

Delegation without abdication Go-goFounder’sTrap


Staffing

Promote from within

Build A’s

Identify a COO

Professionalize the processes of management



Planning & Goals

Market share with minimum levels of profitability

Develop policies, procedures, standards



Rewards

Fixed, variable



Objects 1

XYZ

Marketing

HRD

(Development)

Finance

Purchasing Objects

Objects 2

Obects 3

Workshop 2

Sales

(Inventory)

(Planing)

(Montage)

Trade

(Sales)

(Inventory)

(Sales)

(Inventory)

Preparation

Projecting

(Sales)

(Inventory)

Servis & mainteinanceProjects Support

Accounting

IT

Quality assurance

Administration

Warehouse

Transport

Workshop 1


MISSION STRUCTUREPROFIT TRACKING SYSTEM

REWARDS

ACCOUNTABILITY


RewardGoalCan

CanGoalReward

CanGoal

Reward


How not to getting old?

(P A E i)

(P A E i)

(P A E i)


P P P P P P P P P P P P P P P P P P P

A A A A A A A A A A A A A A

A A A A A A A A A A

A A A E E E

E E

Decentralization


ORGANIZATIONAL FAMILY

President of the Group

Infancy Aristocracy Prime Adolescence Go-go

Uniformity will lead to Bureaucracy

Business

How to get out of Founder's trap