The I in Innovation

By Alden Zecha and Katherine Flowers

Growing an innovation from an idea to initial offering to scale is a unique journey along a path with many turns and forks along the way. Through my work with A-SL@B innovators, I have learned that one of the most difficult challenges for a founder lies in deciding what one’s role should be as the organization around the innovation shifts focus from development to scaling. Over time, a founder’s role gradually evolves from innovator to organizational leader who manages employees, finances, and external partnerships. At this stage, organizational founders may find themselves in a difficult position of deciding whether and how to continue their contributions to their organization as the innovation scales.

To better understand this process, I interviewed four founders of organizations within the Accelerating Saving Lives at Birth (A-SL@B) innovator portfolio. According to those four founders, no specific milestone marks this shift from innovator to organizational leader. It happens slowly over time, as the needs or the organization shift and grow. As they learned more and designed initial prototypes and pilots, all four innovators discovered that having a technical solution was necessary, but not sufficient, to have the health impact that they envisioned. To successfully deploy their solutions, they also needed to overcome larger system issues. Soon, driven by their passions to solve their initial problems, they were taking on new roles to help address these challenges and support taking their innovation to market. For example, one innovator moved from doing technical lab research to mainly writing grants and thinking about how to hire and deploy workers in the field. Others talked about having migrated to working on donor relations, government policy issues and overseeing finances.

For the most part, these founders did not begin their work intending to take on these additional tasks. Three of the four innovators I interviewed were originally focused on the first step of finding a technical solution to a specific health problem where they saw a need and were not initially seeking to found an enterprise. However, all four innovators eventually found themselves at a decision crossroads—should they stay with their organization, and if so, in what capacity? Some founders were excited about taking on new challenges, while others felt that though they might be well suited to lead an enterprise from founding through early growth stage, they were not the right person to lead the organization as it continued to scale.

Four Routes

Each innovator’s path is unique. My interviews with the four founders uncovered four potential paths that innovators might take. These four routes do not necessarily comprise an exhaustive set of options for innovators, nor are they completely mutually exclusive, but I have found that they represent the most common routes for founders within the A-SL@B portfolio.

1. Going all in – A founder fully dedicates themselves to the evolving organizational needs while remaining aligned to their original vision.
2. Refocusing – A founder significantly adapts their vision for the enterprise in response to the changed situation.
3. Handing off leadership– A founder remains involved with the organization in a different role and transfers primary day-to-day leadership to someone else.
4. Exiting completely – A founder steps completely away from the enterprise and moves on to other pursuits.

Going All In

When faced with the different and potentially growing issues of managing their enterprise, some founders embrace that larger set of challenges and “go all in” by fully dedicating themselves to leading the organization in solving new and bigger challenges while remaining aligned to their original vision. One innovator initially approached his work as an engineering project to be solved as a side gig while working for an engineering consultancy. When the organization’s needs grew, he gave up his original job and committed his career to leading his new organization. His decision required personal sacrifice, including turning aside more traditional career prospects which would have been more financially rewarding.

Based on my experience working with innovators, going all in is not the most common route for founders to take upon meeting this crossroad, though it does align with many people’s stereotypical entrepreneur profile of someone who increases their commitment to their vision when new issues arise. Going all in may be the right choice for a founder whose lifestyle goals and professional motivations remain aligned with the organization’s mission and vision, and who already has or is willing to develop the skills needed to lead the enterprise in moving forward. However, this route is only one of several options, and depending upon individual circumstances, another route may be a better choice for both founder and enterprise.

Refocusing

As an organization grows and develops, some founders come to realize that their original vision was poorly focused, or that the greatest health need of their target market is different from what they initially thought. As they better understand how they can best apply their skills and interests within the context they are working in, some founders recognize that refocusing their vision may be the most appropriate course. For example, one of the innovators interviewed began his enterprise with the vision of saving babies’ lives. Over time as he saw more pediatric health issues, his vision grew to be one of improving children’s overall well-being and health. This was not a business model or solution pivot, but a fundamental change in the organization’s vision, which resulted in a significant expansion of the products and services the company is providing now and into the future.

Refocusing is similar to going all in but differs due to the change of vision that happens along the journey. A refocusing also differs from a pivot in that it involves the overall vision for the enterprise, whereas a pivot entails a change in offering or business model, but not necessarily the overall vision or end goal.

Handing Off Leadership

A more distinctive route is handing off leadership of an organization to someone else to take the enterprise forward. A founder may choose this path if they feel they are no longer the right fit for their current role within the organization due to a misalignment in skill, interests, or lifestyle needs, but wants to remain deeply involved with the organization in a meaningful way.

One founder chose to step away from the day-to-day role leading his enterprise to go and found a new venture, while still remaining engaged as an active Board member in the original organization. Another of the innovators is a university professor who told us that he has “no desire to run a business.” After having developed a technical solution to a health need, he is actively seeking to hand off his current enterprise. He loves research and would prefer to stay in the academy while watching his innovation scale under another’s watch and acting as a technical advisor for the organization. Rather than going all in on one innovation, he wants to continue pursuing new solutions in an academic setting while others commercialize his innovations. This conviction dedicates each person to using their skills in the best way possible; and more importantly, recognizes that not everyone has the talents or desire to manage an organization.

Exiting Completely

Some founders may eventually realize that they are no longer willing to make the sacrifices required to stay with the organization. Founders may sacrifice money, stability, comfort, the chance to pursue other career paths, and, if they are living far from home, quality time with friends and family in pursuit of their organization’s vision. If an enterprise takes up too much of a founder’s time and energy, they may suffer from burnout. As Charles Lewis, founder of the nonprofit Center for Public Integrity, wrote, “at some point you don’t want to feel you’re doing the same thing every year…. there was a human stamina question – exhaustion and burnout….I had the sense that if I stayed at the center I would never leave” (Kaplan, 2005). A desire to make a major lifestyle change like getting married, starting a family, or moving to a new location may be another a reason why a founder chooses to leave their enterprise.

Considering What is Best for the Organization

From my work, I have learned that founders who decide to leave or are considering leaving their social enterprise may suffer from something I call “Social Founder’s Guilt,” a feeling that if one steps away from their organization they are a bad person, someone who is not fully committed, or worse yet, a person letting those in need suffer or even die because the founder was unwilling to make personal sacrifices. However, a founder deciding to leave may be best not only for them personally, but for the enterprise itself. No one wants to fall victim to Founder’s Syndrome–a “serious condition that arises when organization founders refuse to recognize their groups’ need for new leadership or new approaches….[which] can lead to internal conflicts that are destructive and even fatal to the afflicted organization” (Chalkley, 2002). Studies have found that founder-led start-ups are generally not as well managed as others, may perform worse, and that founder-led for-profits are less valued by investors (Bennett, Lawrence, & Sadun, 2017; Wasserman, 2017). The founder who chose to exit completely said that the transition away was a good decision for the innovation because “I personally was not operating at my highest level…if I had continued to [do that] it would have been detrimental to the organization”. Another founder said that by leaving he allowed others the opportunity to grow and the organization to move forward in a different and better direction. Knowing that leaving an enterprise may be better for the enterprise itself may make accepting the decision easier for all.

On the other hand, Lee, Kim, & Bae work in a 2016 SSRN article showed that founder-led enterprises may be more innovative. The interviewee who followed the going all in route demonstrates this by having led his organization to develop several award-winning solutions to difficult medical issues in the emerging markets. As he came to better under the multi-faceted nature of the problem his organization faced, he chose to adapt his own role within the organization to take on larger challenges. As his role evolved and grew, he was able to invent better and more comprehensive solutions to the health problem.

Each situation is different. A founder should consider how his or her own skills, interests and motivations align or conflict with their organization’s needs and whether they are the best person to bring their innovation to scale, or whether someone else, perhaps with more business or management experience, would be better suited to do so. Society applauds the founders who have grown their enterprises to scale and impact as we should. We should also recognize those founders who either hand off leadership or exit completely for their contributions and support those making difficult decisions.

Finding Your Route

The set of factors that influence a founder’s choice of paths is highly complex and specific to the organization and the founder. Each founder’s path is personal and unique, and there are no maps to offer precise directions. It is helpful to recognize that there are different routes from which to choose, but a founder must decide for themselves what is right for them. For some of the founders interviewed, the choice to leave, stay, or find a different role within their organization was easy. Others struggled with the decision, weighing their own needs and expectations and those of the organization. Through my interviews I uncovered various sources of assistance that founders have used as guidance in choosing their path.

Peers

Three interviewees cited peers as sources of information that helped them with their choices. Some actively engaged other founders in conversations about what choices they have made and why. Others observed other innovators to try to understand their route and how it might apply in their own circumstances. Innovators found peers through cohort-based programs such as incubators and accelerators, and from gatherings of funder portfolio organizations. One founder stressed the importance of talking to founders in different industries and in different demographic groups to learn of other possible ways of operating. Often the peers who were the most helpful were those further along the growth path than the founder doing the introspection.

Mentors, Advisors, and Board Members

Mentors, advisors, and board members can also be helpful resources. As with peers, founders met mentors and advisors through incubators and accelerators as well as through referrals. One innovator mentioned hiring an executive coach to help identify his personal goals and how they were separate from the organization. He said that he could not have done this if he did not have someone to coach him. Board members from advisory or fiduciary boards can be especially valuable since they understand the enterprise’s context, the team, and the immediate situation. All these people may have more career experience than the founder and can draw upon that pool of knowledge to guide the innovator to make the best choice.

Psychologists and Therapists

Although not usually associated with business settings, psychologists and therapists can be helpful in aiding a founder to understand and articulate their own emotions and motivations and how those might or might not align with an organization’s vision and operations. One innovator received tools from her therapist that helped her determine what expectations and roles she was and was not willing to accept from herself and from her organization. In her interview, this innovator recommended that other founders find their own therapists to guide them through their decisions.

Personal Introspection

Making the decision of what route to take as a founder is a highly personal process. All the founders said that it was difficult and took time. They had to mentally and emotionally separate themselves from their organizations to think about it. More than one took time away from working at their organization to focus on answering this tough question. They needed time to reflect without being buried in the day-to-day running of their enterprises.

Key Takeaways

This work has produced several key takeaways which the reader should note.

For Innovators

• The founder’s role in an enterprise is not static but evolves over time. Founders must consider how their role will change in response to the enterprise’s evolving needs and context.
• There are many routes that founders may take including the four outlined here: going all in, refocusing, handing off leadership, or exiting completely.
• Founders must weigh their personal needs with what is best for the organization. On the organizational side, they may consider the changing needs of the organization, the evolving responsibilities of leadership, and their own interests, motivation, and skillset. On the personal side, they may consider finances, family, career goals, and the potential for burnout.
• In order to make their decision, the founders interviewed turned to peers, mentors, advisors, the boards of their organizations, and therapists. Some took time away from their work to think about their decision without distraction.
• This report may help to guide social enterprise founders who find themselves having to make similar decisions about their roles within their organizations.

For Intermediaries (Accelerators and Incubators)

• There is not a single path that all founders take. Each one takes a unique journey.
• Founders can benefit from the support of mentors and advisors to help them reach decisions on how they might fit best within an evolving enterprise.

For Funders/Investors/Donors

• Pushing a founder into a route that is not an appropriate fit for them, may hurt the organization.
• Supporting founders’ personal needs, motivations and situations can have a significant impact on not only their choices, but the organization’s long-term growth path.

Conclusion

As social enterprises grow, their founders decide what part they will play in their organizations’ futures. I outlined four routes founders might take on that journey: going all in, refocusing, handing off leadership, or exiting completely. Founders of social enterprises may face Social Founder’s Guilt when trying to choose the path that is best for them. Making this decision entirely on one’s own can be a daunting challenge. In determining which paths were best for them, founders consulted and observed peers; sought advice from mentors, advisors, and board members; sought psychotherapy; and engaged in personal introspection. Deciding which route is best is entirely personal and, as one founder put it, “there is no right or wrong, just different choices.”

 

References

Bennett, V. M., Lawrence, M., & Sadun, R. (2017). Are Founder CEOs Good Managers? In J. Haltiwanger, E. Huest, J. Miranda, & A. Schoar (Eds.), Measuring Entreprenuerial Businesses: Current Knowledge and Challenges (pp. 153–185). Retrieved from http://www.people.hbs.edu/rsadun/AreFounderCEOsGoodManagers.pdf

Chalkley, T. (2002, September). Strategies for Handling Charity Leaders Who Can’t Give Up Control. The Chronicle of Philanthropy. Retrieved from https://www.philanthropy.com/article/Strategies-for-Handling/183837

Kaplan, S. (2005). Knowing When to Let Go. Stanford Social Innovation Review. Retrieved from https://ssir.org/articles/entry/knowing_when_to_let_go

Lee, J. M., Kim, J., & Bae, J. (2016). Founder CEOs and Innovation: Evidence from S&P 500 Firms. SSRN. https://doi.org/http://dx.doi.org/10.2139/ssrn.2733456

Wasserman, N. (2017). The throne vs. the kingdom: Founder control and value creation in startups. Strategic Management Journal, 38(2), 255–277. https://doi.org/10.1002/smj.2478