It has long been understood that businesses often outgrow their founders. To start a business from scratch requires a unique combination of passion, commitment, self-belief and an appetite for – or ignorance of – the risks associated with a new enterprise.
These are typical characteristics of an entrepreneur. Another typical characteristic is the ability to quickly adapt to changing circumstances by adopting, modifying and discarding strategies and tactics as the situation requires.
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These characteristics combine to provide the raw talent that brings a business into existence, and make it successful.
The more successful the business becomes, the more likely the founder will want to continue in the role of leader.
But eventually young bones stop growing, and gradually ossify.
Business owners, like politicians, often fail to realise when they are past their use-by date.
Sometimes this is because of a lack of self-awareness. Sometimes it’s because they identify themselves so closely with their business that they are incapable of comprehending a meaningful existence without it. And sometimes it’s because they are unable to develop or accept an exit plan that removes them from daily operational control.
Whatever their reason for staying, the business can suffer as a result.
This translates to a failure to evolve, the loss of talent as team members realise that their career prospects are limited, and a stagnation of business growth.
As they lose their dynamism, founders become entrenched in their habits and attitudes, and progressively lose their interest and desire to explore alternative ideas.
Instead, they become increasingly convinced of their own infallibility.
As leaders, they cease to learn and evolve. They are no longer dynamic, and become wed to the ways of the past, or only see a future populated with ideas they have generated themselves, not from the input of others.
In itself, becoming staid is not enough to turn a dynamic entrepreneur into a capricious tyrant.
The final step of the journey occurs when the leader becomes insecure about their position in the organisation, and lashes out at anyone who challenges it.
When this occurs, the leader will not tolerate any real or perceived challenge to their authority, and is incapable of giving consistent reasoning to justify their position on any issue, other than they have spoken and their word is law.
Consequently standards may not be uniformly applied across a network, or incidents where franchisees who challenge the status quo are singled-out for unfavourable treatment.
Capricious tyrants get away with their behaviour because the majority of those affected by it refuse to believe that their dynamic leader could have changed so radically, and instead believe that the fault lies with intermediaries, such as senior managers or advisers. The true believers continue to believe right up until the point where the tyrant turns on them as well, and then it’s too late to save themselves.
If this sounds like some Orwellian conspiracy theory on steroids, then think again.
Any business owner can be outgrown by their business, regardless of whether they are a franchisee or franchisor.
Knowing when to exit the business or leadership role (or both) is just as important for the long-term growth of the business as the entrepreneurial flair which started it in the first place.
Business leaders must have an exit plan in place to avoid the negative consequences of holding on too long and becoming a capricious tyrant instead of a dynamic leader.
Recognising their own use-by date is a rare but valuable characteristic of business leaders, and one which demonstrates their true commitment to their business.
After all, who wants to be remembered as a capricious tyrant?
Jason Gehrke is the director of the Franchise Advisory Centre and has been involved in franchising for 20 years at franchisee, franchisor and advisor level.