Comments: The Founder Paradox

The issue is often clouded with the unique vision the founder has within a rare niche. Often people can take on the attributes required to advance specialized areas of focue in a quick manner wihtout a documented process that others can not follow or lead. The group or company built around these circumstances have a choice to make, isolate the brilliance inside a special area and grow around it in process that is more easily understood or wait until this unique event dies out as it tends to do. People are brilliant in unique and wonderful ways for short periods of time, if this brilliance grows with a flexible group it has a better chance to become adapted to process if not it dies with the founder. Founder's flounder, and flounders fry, we all have feet of clay even those that work in the shadows of brilliance. Drexel had an idiot savant that would be wheeled into board rooms not having the time to walk from one meeting to another, when this brilliant man's flaws caused his down fall it created a void in the high yield funding world for the next ten years and the collaspe of the savings and loans of the US. The same thing will happen when the flaws of risk based leverage are gamed in the near future and the brilliance applied to finance adopted from engineering will have run a cycle a very human cycle.

Posted by jimbo at March 30, 2007 08:48 PM

Are you sure it isn't a cash flow problem? Companies find it much easier to build competent staffs, and executives, when they have enough money....

The problem of founders' paradox sounds alot like small business burnout, wherein, almost all small businesses are so much work that it's not worth it, unless the entrepreneur really loves the work, intrinsically. That is probably less than half the time, and the percentage probably declines as the years go by. You get your fill of it, and the spirit yearns to move on to other things!

One of my key realizations the past several years is that I'm not exceptional at all, many people go thru very similar phases, lessons or stages... I think we go thru them at different times, in different order maybe. That gives us the illusion we are alone or some what unusual but we're really not.

I'm not aiming this at you, at all. Just reflecting on things, tonight.

Posted by Todd at March 31, 2007 03:49 AM

could consider analogous problem in Boyd's characterization of issues in corporate america stemming from training executives had gotten as young officers going into ww2.

the issue was that the country had to deploy an enormous number of inexperienced and relatively untrained personal. the solution was to create a rigid, top/down command & control structure ... attempting to leverage the few skilled individuals that were available.

later, as these young officers started to populate corporate america ... they brought along with them the rigid, top/down command & control structure paradigm ... based on original premise that it is necessary in order to deal with (possibly large numbers of) inexperienced and unskilled individuals.

some recent posts on the subject in another thread:
http://www.garlic.com/~lynn/2007e.html#45 time spent/day on a computer
http://www.garlic.com/~lynn/2007e.html#55 time spent/day on a computer
http://www.garlic.com/~lynn/2007f.html#41 time spent/day on a computer

one of boyd's observations was that the rigid, top/down, command & control structure required something like 12 percent officiers ... he contrasted this with the german army with only something like 3percent officers

misc. past posts mentioning boyd
http://www.garlic.com/~lynn/subboyd.html#boyd
and lots of URLs from around the web mentioning boyd
http://www.garlic.com/~lynn/subboyd.html#boyd2

Posted by Lynn Wheeler at March 31, 2007 09:06 AM

Hi Ian,

great posting. And I agree 100% ...

Posted by cyberacid at April 1, 2007 09:00 AM

WSJ writes:

"First Data was split off from American Express Co. in 1992 as an information-processing company that would handle billions of credit-card and other transactions for third parties. The company has struggled in recent years to organize its international, commercial and retail-processing units in a compelling way, amid turmoil in the CEO suite.

...

"Mr. Duques, 63 years old, ran the company for 10 years until he handed the reins to Charles Fote in 2002. Mr. Fote stepped down in 2005 after overseeing an aggressive strategy that alienated some customers and investors. Mr. Duques agreed to step back in for two years to reorganize the company's remaining businesses and cut operating costs. No successor has been named and Mr. Duques's two-year window closes later this year, and the lack of a new CEO has delayed a deal so far, people familiar with the matter say.

Posted by Not Only Small Companies... First Data and KKR at April 2, 2007 06:37 AM

You can see what Lynn refers to even today, when you compare German millitary to US millitary. And you see the same if you compare German workers to US workers (leave management out of scope for a moment):

In the US you typically have small workgroups consisting of a bunch of people doing the same job. Then you have one person responsible for handing the result over to the next group, without knowing what they are doing with the product. Basically this means the guy in charge is only controlling the work of HIS team and ignoring the world outside.

In Germany you see those dumb workers as well. But the guy in charge is not only controlling the work of his people, but he is also responsible for integrating this work into the workflow of the next group. In order to move the product forward properly, he has to know his work area + the work area of the next production step.

What does it mean?

The typical US worker is highly skilled in his particular work area. I would say he is doing a better job than the German worker (on a wuality ?????? perspective only). But he is unable to work even one step, either side of his assigned work. The German worker is typically trained at a "core work" plus surrounding areas, so he is able to understand a larger part of the process. This means he is not so good in his particular job, but due to his overall knowledge, his work fits better into the process.

Both approaches have their benefits. While the US approach definately comes from that WW2 process described by Lynn, the German approach comes from the post-WW2 need to be flexible enough to get something done with whatever was left over from WW2.

And what is the result in business terms?

In Germany you find many more medium-sized businesses, because of their flexibillity. In the US there are more large organisations because they need their building blocks.

Posted by Anon Guy Soon To Be Criminal Anon Guy if Germany Passes IP Tracking Law at April 3, 2007 01:27 PM

OK, so if the Americans and Germans are at peace on the question of how the worker-ant in both countries is trained ...

What do we do with it?

Say I walk into a company that is structured according to the post WWII American model ... "a rigid, top/down command & control structure ... attempting to leverage the few skilled individuals that were available" ... regardless of which country it is found in ... and:

I want to turn it into the alternative. How do I go about that?

Posted by Iang at April 3, 2007 01:31 PM
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