A lot of business literature has been dedicated to visionary founders such as Bill Gates, Jeff Bezos or Richard Branson who have run their companies with great success. However, they represent a tiny fraction. A study collated by the universities Harvard, Duke and Vanderbilt have produced a startling result that most companies that continue to be run by their founders, fare much worse than those not. Business research finalized by the World Management Survey shows that founder-led companies perform 9.4% worse in terms of productivity. A professor at the USC Marshall School of Business, studied more than two-hundred start-ups from the last two decades to conclude that only half of those were still run their founders just three years on. The number reduced to a fourth by the time of their IPO. The reasons are quite straightforward. External investors do not want to fund companies still dependent on a single person, so insist on independent CEOs. Also, the skills necessary to start a new venture are not the same as running a larger firm. Many entrepreneurs chose the life in the first place to escape the complications of working at large firms, so are loath to follow conventional management principles. There is a “rich versus king” test, where the founders need to choose between making more money by following professional guidelines, or to retain control to the chagrin of profit-making. The first leadership transition in many ways makes or breaks a new firm. Source:https://work.qz.com/1125919/we-finally-have-proof-that-visionary-founders-make-the-worst-ceos/?utm_source=Quartzaw&kwp_0=602358&kwp_4=2125075&kwp_1=887702

Uploaded Date:13 December 2017