Thu, 07/15/2010 – 23:58 | by Jim Vollett
In the first article of this series, Helping Founder CEO’s Turn Over the Reins, I reported that in order to be successful, most early-stage tech companies need two very different types of innovation, and therefore two very different types of CEO’s–Technical/product innovation, supplied by the founder CEO, and Managerial/sales innovation, supplied by the builder CEO.
This transition is critical to the success of the company. Done well, it will lead on to powerful growth; done poorly it can severely set back the company. This transition requires a shift in identity of the founder, which is often a painful thing, but can be very rewarding.
In the second article of the series, Helping Builder CEO’s Pick up the Reins, I reported
• How the founder can hire the right builder,
• How the builder can select the right founder company to work for,
• The challenges for builder in coming from a larger company to a smaller one.
Creating the Relationship
However, hiring right is only the start. There is still a lot of work that needs doing to ensure that the relationship between the founder and the builder turns into empowerment rather than a power struggle. I have distinguished this into six key steps:
1. Confronting the challenge
2. Building the trust to reveal the conflict
3. Creating the conflict-free possibility
5. Spontaneous Committing
Confronting the Challenge—Bringing Together the Two Creative Processes
Most executives are unconscious competents. They are very good at what they do, but they do not have much idea of how they do it.
They have a sophisticated creative process–how they take in information, process it, and express it. But because they have been busy building their process, and not spent much time reflecting on their process, they are vulnerable to having the process be interrupted. When that happens, they stop producing results, and feel blindsided.
A founder’s creative process is focused on taking risks, trying new things, working with the unpredictable and the emergent. They are focused on creativity.
The builder’s creative process is focused on mitigating risk, implementing what has already been proven, and making the process more and more predictable. They are focused on discipline.
Integrating these radically different processes will dramatically improve the company. However, I guarantee you that, the first time they come together, there will be challenges (issues, problems, opportunities, breakdowns expressed as tension). Challenges produce upset—negative feelings, thoughts and body sensations.
There is no avoiding this—there is only working through it. Each person must be committed to learning from the other and the process.
Building Trust — To Reveal the Heart of the Conflict
The source of power struggle comes when one person thinks he is right, and the other person is wrong.
The trap the builder can fall into is to come into a company and see the fragile processes and lack of discipline, and conclude that the founder and his team are incompetent. They completely miss all the creative process that created the opportunity in the first place. In other words, they are not aware of the skill and effort required to generate a genuine entrepreneurial opportunity out of chaos. To the builder it just looks chaotic, it is wrong, and it is the builder’s job to “fix” it.
Needless to say the founder and his team have trouble with being “fixed”. But they can also miss the critical need to bring structure and order to the opportunity. They can often feel like the builder is taking all the fun away, and imposing senseless bureaucratic rules. Therefore, the builder is wrong, and should be resisted in creative ways.
So the way out of this is to commit to having it work for both parties, to validate the others perspective as well as your own. The founder and the builder both have a role, both roles are valid, and the only solution that will work is one that includes both perspectives.
This is harder than it sounds. Validating another’s perspective means you acknowledge that there is something valuable that they know that you don’t. This requires some vulnerability. It requires you to listen for their deeply held commitments i.e. their desires and their concerns.
The emotional reaction at the challenge stage actually points to these deeper commitments, if you can train yourself to hear them. For instance, when someone is angry they are really saying “there is something I want, and you are stopping me from getting it”. So rather than react negatively to another person’s anger simply ask:
• What is it that you want?
• What is your concern i.e. how do you think I am stopping you?
When both sides can feel safe enough to reveal their desires and concerns, you have the data to create a possibility to resolve the conflicts.
Creating the Conflict-Free Possibility
When you know the two core desires and the two core concerns, you are in a position to collaborate on a possibility that includes them all. Desires are satisfied with a forward-moving energy and concerns are satisfied with a holding-back energy.
Your desire cares only that you are moving in the right direction—it really does not care about pace. Concerns don’t care what direction you go in, as long as they don’t feel overwhelmed.
So, if you are going in the right direction at the right pace, then you are unstoppable.
One of the most common examples of this conflict is when the founder wants to pursue new product opportunities, and the builder wants to take the existing products and fully market them. And there are only enough resources to do one of these strategies—a seeming irreconcilable conflict.
So the founder:
• Desires to create new products and opportunities.
• Is concerned that his creativity in this area will be diminished.
• Desires to build the company’s actual revenues (as opposed to opportunities)
• Is concerned that if too many resources are spent on product there will not be enough to build the markets.
The solution may be to:
• Both realize that some products need to be maximized in their markets to produce money to fund new product development.
• Both also realize that as this money is produced, resources must be allocated to new product development, to keep providing new opportunities for the future.
The founder can support this by turning his/her creativity to selling major clients in the markets, as well as working on new products in a low resource skunk works environment. The builder can support this by looking for new product opportunities in the market place.
Feasibility–Driving it through the Teams
The relationship between founder and builder does not just exist between the two people. It also exists between their teams.
The founder has a team that is usually very loyal to him, and he to them. They took great risks up front, and believed in him. They may also be investors—they certainly have invested “sweat equity”. He may prize that loyalty, and return that loyalty even if they are not the right people for the roles that are emerging.
The builder also brings in his own team—that is one of the reasons you hired him. They are much more focused on getting the right skills sets in the right roles, and are usually blind to the “equity” carried by the original team. They are completely focused on performance now, not performance in the past. And they may resent people having accountabilities they cannot carry.
So the previous process needs to be repeated amongst the teams. Both teams must commit to grow their perspective/understanding of the creative side as well as the discipline side.
I am sorry to say that lots of time this bridge is not crossed, and long-term employees need to be let go. The best way to do so is to financially reward them for their sweat equity, and then empower them to go to a place where their start-up skills are better utilized.
However, new employees also may need to be let go, especially if they do not take time to learn the culture before they decide what needs to be fixed. Arrogance usually means someone is too lazy to learn another’s perspective. The magic of a start-up is often buried in its culture, invisible to the naked eye, but will burn you if you dig into it without care.
When the above steps are done well, when both cultures do learn from each other, they will significantly improve their own game. Founders that develop more discipline will create better opportunities. Builders that develop more creativity will produce processes that are more dynamic, flexible, and responsive.
More importantly, the two cultures will spontaneously become a highly effective creative team, without ever threatening each other’s area of mastery. They will have a high degree of respect for the other’s mastery, and they will come to depend on each other’s commitment—each using his strength to cover the other’s weakness and vice versa.
At this point you have created the foundation for the whole next level.
Because this alignment is spontaneous you will not notice it at first. However, it is critically important that you take time to notice it, because that it is where satisfaction occurs. Plus, when you do notice it, people realize what has worked, and they repeat it. This creates the foundation to move to a whole new level of challenge.
It is very easy to miss this step, because the next challenge will be looming. But you ignore it at your peril!
The Need for an Outside Translator
The challenge of building the relationship between founder and builder is inevitable. It will only be solved by growing—by looking for the truth, wisdom and validity in the other. This can be extremely difficult, and painful. It is best supported by an independent outsider, who has a foot in both the cultures, and can translate from one culture to the other.
Historically this has been a Board member or trusted advisor, like a lawyer or accountant. Today, this role is more and more filled by a skilled executive coach, trained in these transitions.
Two committed and able people may be able to out work this relationship over time, without any help. But they would take a lot less time and bandwidth, and be a lot less stressed with the help of trusted outside support. These resources can be used much more productively in running the organization and creating radical new opportunities.
• There is no avoiding the challenge of integrating the cultures of the builder and the founder. The key is to work through the breakdown and produce the breakthrough. Properly done this sets the company up for sustainable growth; poorly done this sets the company up for disaster
• Trust occurs when you validate the desire and concerns of the other as much as you validate your own.
• A conflict-free possibility encompasses their commitments and your commitments. This looks difficult in the beginning, but it is the only possible way.
• A solution is not feasible until it is driven down through the team.
• However, when all of this is worked through, both the founder and builder spontaneously improve their own game, and improve the game of the company.
• It is important to consciously acknowledge this success so it becomes a foundation for the next level.
• This is difficult to impossible for two people to do on their own. They need an outside guide with a foot in both realities.
By Jim Vollett, Vollett Executive Coaching. Jim can be contacted at here.