Investor Graham Duncan says in an interview
that many organizational tensions are the result of not explicitly acknowledging who “the source” of the given company or initiative is.
For Duncan, the source is “the person who took the first risk on a new initiative.”
Even when there are multiple co-founders of a company, there is always a single source.
As Duncan puts it, the source maintains a unique relationship with the “gestalt of the original idea and has an intuitive knowledge of what the right next step for the initiative is.”
Others who join later to help with the execution of the idea lack this intuitive connection to the founder’s original insight.
And this can create tension.
Handing off the source role of a company or initiative to another person is possible, but difficult and usually mishandled.
Graham notes that one key to a successful transition is for the original source to “actually move on and allow the new leader room to move.”
As evidence, Graham cites one study of company stock performance following founder CEOs departing their businesses. In the study, subsequent positive stock performance was correlated with the founder completely leaving the board, rather than staying on to mentor the next CEO.
Graham suggests Microsoft may be an example of this phenomenon. Microsoft founder Bill Gates remained on the Microsoft board when Steve Ballmer took over as the company’s second CEO. Graham points out that this may have contributed to Microsoft’s lackluster stock performance throughout Ballmer’s tenure.
But when Ballmer stepped down from the CEO role, he also left the Microsoft board, allowing current Microsoft CEO Satya Nadella “to fully assert his own creative vision.”
For Graham, the lesson is best captured during a scene in the musical Hamilton, when George Washington declines Hamilton’s plea to run for a third term and sings, “We’re going to teach them how to say goodbye.”