The Founder

 


The Pillar of the Family Business

By Robert Lafond, C.R.H.A., M.B.A., Pl. Fin.

The characteristics of a founding owner highlight the differences between small and large companies. In a word, the founder of a small company is an entrepreneur – an independent, action-oriented person.
 
According to several studies, founders have a tendency to do everything themselves, make all decisions, and focus more on day-to-day operations than long-term strategy. This short-term focus and tendency to control and dominate mean that the founder has neither the time nor ability to groom a successor. The founder’s personality doesn’t encourage independence, he has a great deal of difficulty delegating, and is more adept at doing than teaching.
 
Many practitioners have observed that the founder’s personal objectives are independence, income, power, social status, prestige and advancement for their children. There is a tendency to treat the company as a personal project. As a result, the company’s objectives often remain in line with the owner’s interests – but for the company to survive and grow, the opposite should be the case.
 
This close relationship between a person and their company gives us a better understanding of the founder’s reluctance to prepare for a changing of the guard; for him, the future means only death. He does not want to think of the day when he will have to leave the company, and in many cases will refuse to retire. This denial of the future will thwart the transfer of power to family members and, in many cases, prevent a transition to a growth phase.
 
In order to balance his desire for autonomy and independence, the founder should seek outside assistance. On the one hand, this could refocus his priorities on the company’s objectives, while on the other it could help him strike a balance between short- and long-term thinking. 
 

The Family

         
The family unit can be a major source of conflict for a family company. On the one hand, the successor for the top job is most likely to be a family member, while on the other hand family members’ interests and objectives can be divergent. 
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