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The Biggest Challenge Facing Owner-Run Companies

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“What do you mean I’m off-brand? I’m the founder”. This was the provocative title of an article in AdAge recently. Bemoaning an “undercurrent of anxiety” at her digital marketing agency, founder Nina Hale shared how after 10 years of growing the company, she is running into daily interactions where she feels she is either no longer in control of the company she founded or she is being asked to do things by employees for “the brand” that seem at odds with her role or incongruent with the way she has grown the agency to date. In her own words: “Basically, I’m off-brand. How did this happen? I founded this agency; it’s named after me. I thought I was the brand.”

What Nina is discovering is what many founders experience when their companies reach a certain size.

The company has become bigger than any one individual.

It no longer exists to serve the needs of the founder alone nor can it grow if every decision needs to be made by the person with the name over the door. Founders who reach this stage are faced with making one of two possible decisions: Grow the company to the ceiling of the abilities of the founder or grow beyond the individual(s) to satisfy a greater need. The question becomes personality or purpose?

Aside from the usual exceptions to any rule, companies looking to scale dramatically need to become purpose-driven companies rather than personality-driven companies. Don’t all companies have a purpose? and aren’t all companies personality-driven?

It may seem this way, but there are clear differences between both types of enterprise. A purpose-driven company has made a decision to take a long-term view for the business, choosing to only pursue profit if it can benefit all stakeholders (employees, customers, community, planet) along the way. Purpose-driven companies have chosen to solve a particular societal need greater than any one individual’s needs. Decision making can happen at any level of the organization due to the clarity of the vision and purpose. Marketing related costs tend to be lower at purpose-driven companies, who instead favor grass-roots community building efforts that earn trust, loyalty and opportunities to connect meaningfully with stakeholders. Purpose-driven companies aren’t dependent on who occupies the CEO office to achieve their goals, instead employees move as a single unit towards the clear goals.

Personality-driven companies that reach a certain stage of growth depend on the individual founder for most of the decision making, often resulting in slower decisions. Executives and team members are often unclear what decisions to make themselves as they may be at odds with what the founder’s goals are. Personality-led companies may be successful, but often only as long as the founder remains committed to growth and development of the company.

This brings its own challenges.

A founder taking something as simple as a vacation may cause operations to come to a standstill or for deals to wait until (s)he returns. Personality-driven companies tend to have a more political environment than purpose-driven companies with employees angling to be “anointed” by the leader or in favor.

The question becomes what company you want to be part of? Are you comfortable with your company becoming bigger than you? If so, are you willing to allow decisions to be made in your absence as long as they are in line with the purpose of the company? If not, you may be more comfortable operating to the ceiling of your own personality. There is no right or wrong answer as it depends on the goals of the founder as to what type of company is being built. Whichever decision you make, can you answer the following question? What is the purpose of the company? Why does it really exist? Answer this and it will be easier to decide which type of company is the best fit for you.

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