One might say that great founders build great organizations. One might also say, average individuals create “me too” companies. And incompetent individuals fail at business.
Background: The Great Founder Theory
In my view, the company is a reflection of the founder who created it. Great companies do not happen by accident—their founders created them, nurtured them and grew them. And we can learn a great deal about how to grow a business from those who have done it (Branson, 2000), (Isaacson, 2011), (Smith, 2012).
“I remember years ago sitting in the initial management class in a MBA program. Fortunately, the professor teaching this course was an engineer, one who founded a successful engineering services company. It was a joy hearing him describe how theory worked in the real world; and damn, he was a great storyteller.
One of things I’ve never forgot, even though that class occurred many years ago, was a theory that explained entrepreneurial success— one mostly forgotten in today’s textbooks on management. At that time, the theory was known as the “great man” theory. Today we are more likely to use the phrase “great person” or “great individual.” The assumption underlying the theory is a deceptively simple one: One might also say, average individuals create “me too” companies. And incompetent individuals fail at business.” — Murray Johannsen, personal story
“You grow an organization the way a tree grows—from the inner ring to the outer.” — M. Johannsen
This paradigm consists of a different way of thinking compared to what’s traditionally taught in the b-schools. It consists of these elements:
- The Three Rings of Greatness
- Four Tenets For Growth
- The Core Five Skill Sets
The three rings are a metaphor. One ring is the founder himself, the second ring is the group, and the third is the organization.
The Three Rings: The Individual Ring
Every business starts with an idea held by a founder. It’s starts with a dream, imagination turned into reality. Really smart entrepreneurs prepare themselves for the launch. These are what are commonly called opportunity entrepreneurs. However, this is not always possible.
Necessity founders are those who face a real “fiscal cliff” find the walls of the corporation or government impossible to scale, they strike out on their own into the world of business.
The Three Rings: The Group Ring
Until recently, b-schools did not place a great deal of emphasis on group dynamics and team building. Many expect teamwork but don’t provide the practical theory necessary to understand it or the practice needed to make it happen in the real world.
Groups are complicated. For example, a good textbook on group dynamics will easily run over 500 pages. For every book touting the wisdom of crowds (Surowiecki, 2004), you also have books documenting centuries of financial folly by the best and brightest in the world of finance (Reinhart and Rogoff, 2011).
Groups don’t automatically make better decisions than the lone individual . And it’s all too often the case that most “executive teams” aren’t teams at all. At their worst, they’re really a coven of angry old guys in perpetual conflict with each other trying to please a sociopathic authority figure.
Groups can be further broken down into teams (a small number of individuals between five and 10) and tribes. Tribal groups are not yet hierarchical. One person can still rule the nest. However, once one can draw an organization chart with more then two levels of management, you are in the organizational phase on the way to bureaucracy and bureaucratic leadership.
The Three Rings: The Organizational Ring
At some point, start-up groups give way to the imperatives of bureaucracy. HR wants job descriptions, accounting screams for controls, listening to lawyers becomes more important than listening for good ideas, and middle managers are needed to reduce the work load at the top, etc. At this point, one can use more of the theory taught in the business schools.
The Core Five
Within the ring of the founder we also see a number of key competencies that the individual must build. These break out into a Core Five Organizational Skill-Sets needed to play a work role. In no special order they are:
- Strategy and tactics,
- Entrepreneurial management,
- Transformational leadership,
- Technical skills, and
The Four Tenets For Growth
Finally, there are certain guiding principles an entrepreneur needs to keep in mind. These are:
- Know Thyself
- Strive For Self-Mastery
- Follow the Path of Heroes
- Seek to be Wise
Don’t Be Afraid to Think Different
“The key to success is to focus our conscious mind on things we desire not things we fear.” — Brian Tracy
Image by: Lumaxart
“A superior man thinks of what is right, A small man thinks of what is popular.
A superior man demands much from himself, A small man demands much of others.
A superior man does not accept his lot in life, A small man is full of complaints.”
Resources and References
Branson, Richard (2000). Losing My Virginity. Virgin Paperbacks
Collins, Jim (2001). Good To Great. HarperBusiness
Freeland, Chrystia (2012). Plutocrats: The Rise of the New Global Super-rich. The Penguin Press.
Isaacson, Walter (2011). Steve Jobs. Simon and Shuster.
Reinhart, Carmen and Rogoff, Kennith (2011). This Time is Different: Eight Centuries of Financial Folly, Princeton University Press.
Surowiecki, James (2004). The Wisdom of Crowds: Why the Many Are Smarter Than the Few. Anchor Publishing.