The Sad Story of a Founder Who Can't Let Go
As a young man, he pulled himself up by his bootstraps to become a hero in his industry and his community. His new wrinkles on an old product revitalized his industry and made him a very wealthy man. Revered and honored for his business acumen, his generosity and his leadership, he received every available accolade, award, and recognition.
But after nearly 30 years of leading the business he founded, things were no longer working so well. A major acquisition proved much more costly than expected. The old formula wasn't producing its traditional results any more and new products didn't achieve the market response that had characterized earlier offerings. The economy hit his industry particularly hard and his company's now publicly-traded stock took a beating.
Then his doctor said that open heart surgery was needed and warned of a long period of recovery. The founder recommended to his board that his handpicked successor be installed as CEO while he would retain the title of chairman.
After recovering from surgery, the founder looked around and began to notice things about his company that were not to his liking. Sales continued to be off. Some assets were sold, too cheaply the founder thought. Quality was slipping and he didn't agree with some personnel decisions.
The chairman expressed his concerns to his board of directors, many of whom were long-time associates and highly respected in their fields. They counseled the founder to give his successor more time.
Soon, however, the founder's patience wore thin. He didn't build his company and achieve his success by sitting around. He was a man of action. He clashed with the board.
Feeling that the company could have only one leader, the board removed the founder as chairman, ten years earlier than originally agreed. Folks who I thought were my friends stabbed me in the back, he told the local newspaper. He was removed based solely on the conclusion that having (the founder) continue to run the company was no longer in the best interests of the shareholders, the board replied.
Lawsuits, proxy fights and very public nastiness followed.
The founder, charging back from his heart problems, says none of this would have happened without the health issue.
The founder admits that his own mistakes could be the cause of the company's difficulties but wants the opportunity to repair the damage.
The founder refuses to heed the advice of his friends and his long-time business associates and sees their disagreement with his conclusions as the highest form of disloyalty.
The founder believes that he is the only one to save the enterprise that he so loved, to which he was so dedicated, and which he led so effectively.
The successor, considered perfect a few months earlier, now lacks experience and seasoning according to the founder.
Friends, associates, competitors and the business community seem to share a single response as they observe what has become a war between a man and the company he founded. They all shake their heads with sadness for what they see as a man who seemingly can't let go. They deeply understand what Peter Drucker meant when he said: The final test of greatness in a CEO is how well he chooses a successor and whether he can step aside and let his successor run the company.
Articles purchased or downloaded from Family Business Consulting Group® are designed to provide general information and are not intended to provide specific legal, accounting, tax or other professional advice. Since your individual situation may present special circumstances or complexities not addressed in this article and laws and regulations may change, you should consult your professional advisors for assistance with respect to any matter discussed in this article. Family Business Consulting Group®, its editors and contributors shall have no responsibility for any actions or inactions made in reliance upon information contained in this article. Articles are based on experience on real family businesses. However, names and other identifying characteristics may be changed to protect privacy.
The copyright on this article is held by Family Business Consulting Group®. All rights reserved.
Articles may be available for reprint with permission. To learn more about using articles for your publication, contact firstname.lastname@example.org.