In business, the founder bears ultimate responsibility for anything. No matter what happens, only he will be guilty of not having foreseen, not reacting immediately or, on the contrary, not restraining the emotional outburst. The only thing that balances the weight of this burden is the complete freedom to do anything. And if authority is a limited right, the founder’s authority in a private company is maximal. In this way power and responsibility are maximized but matched, making entrepreneurship one of the most fascinating social games. Wealth, recognition, and fame are certainly important, too, but they seem to be by-products of activities that reward some people in the process.
The founder does not think about the balance of power and responsibility, just as he does not think about the ratio of oxygen to carbon dioxide in the air–he simply breathes it. However, I have often seen entrepreneurs violate this parity when it comes to their employees. For example, with the help of an executive search agency, a promising CEO is brought into the company with ambitious goals: “Come on, we’re waiting for a miracle!”, and if successful, he is promised the proverbial million. The new CEO rolls up his sleeves and enthusiastically plunges into the work, but quickly notices that his hands and feet are tied. It turns out that, in his words, the founder has delegated authority to the CEO, but in reality he does not let him make a single step on his own. Despite the fatigue of the operating routine, the long thinking and the high costs of hiring a professional, the fear of losing control over “his baby” takes over. Employees instantly read this dissonance and rush with all questions to the one who has the real power. From this point on, the hired CEO is doomed.
If he is naive, he will try to fight the resistance, which will only make his inevitable outcome more painful and humiliating. If the CEO is smart, he will leave the company at the first sign of actual sabotage of his authority, even if the shareholder warmly assures him otherwise. A wise CEO will never agree to any generous salary and bonus unless the owner explicitly confirms the transfer of specific powers. Or if the CEO suspects that the owner is cheating himself.
Yours sincerely,
-Alexander
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