Founderitis Is A Thing, And It Can Kill A Business

Editor’s Note: Mark Debinski is part of the team at Chief Executive Coaching, a group of former CEOs who’ve led through growth, crisis and transformation. They know what it’s like to sit in your seat—and how to help you move forward. Learn More >

Earlier this summer, I sat in a meeting room at the Ritz Carlton in Naples, Florida, watching a company, in its 12th year and on a path to crest the $20 million revenue milestone in 2025, struggle. The room was stunning and came with a beautiful view, which one would expect at a Ritz property. Attendees at this executive leadership team (ELT) meeting included the founder and his wife (CEO and COO, respectively), the company’s CFO, their VP of sales, me and two other outside executives who comprise the board of advisors.

The overall economy was perfect for this business, and their primary service market in south Florida was booming—again! It should have been the best moment in the firm’s history. But as I listened to the founder-CEO hijack each of the ELT members’ prepared reports, I could see ample evidence of why the business had not reached its real potential and why it risks being derailed.

Simply put, it wasn’t the business. It was the CEO. And everyone in the room knew it—except him.

Watching each member of the ELT sit visibly annoyed as the founder stole their thunder and spotlight was downright cringeworthy. The outside advisors and I tried to bring the respective ELT members into the conversation by asking very specific questions. But the founder knew the answers and jumped in over and over again. His behavior solidified our concerns that rather than being on top of the details of the business, he was way too involved in them.

Our suspicions were not new, and each member of the ELT expressed concerns in smaller conversations, often citing specific examples. The result, everyone agreed privately, put the leadership, the advisors—and the company itself—in a precarious situation. In other words, this promising company had a terrible case of founderitis.

The Symptoms

Founderitis may sound amusing (especially to founders!), but for those who work with it (or around it), it is anything but. It describes a behavior pattern where the person who starts an organization struggles to relinquish control or adapt as it grows. They become the bottleneck to scaling further. The original term used to describe this ailment was “founder’s syndrome,” which has been discussed extensively for decades, including in a 2002 study by Stephen Block and Steven Rosenberg, who helped formalize the understanding of founder’s syndrome in nonprofit organizations. They defined founder’s syndrome as “the influential powers and privileges that the founder exercises and the resulting heavy-handed imbalance of control within the organization they created”.

As a consultant to many family businesses and closely-held firms over the past 16-plus years, and former ELT member of similar businesses for two decades prior, I can also tell you that founderitis is—sadly—all too common. It typically manifests when a founder struggles to transition from a startup or early-stage leadership style to one suited for a mature organization. Common symptoms include:

1. Micromanagement. Difficulty delegating tasks or trusting others with decision-making.
2. Resistance to Change. Reluctance to adopt new systems, processes or leadership structures.
3. Identity Fusion. The founder sees the organization as an extension of themselves, making objective decisions difficult.
4. Over-centralization. All decisions funnel through the founder, slowing down operations.
5. Poor Succession Planning. Avoidance of planning for leadership transitions or grooming successors.
6. Emotional Decision-Making. Decisions driven by personal attachment rather than strategic thinking.

Taken together, this creates risk all over the organization, including internal dysfunction, confused leadership structures, poor morale and financial instability.

A Founderitis Intervention

That was certainly the case for the firm in Florida. But addressing any type of blind spot is difficult for the person who has their blinders on, especially when the founder feels they are doing noble and virtuous work. They had the vision, took the risk, birthed the venture—often with many people saying no and expressing skepticism along the way.

Add to the above a taste of success—along with the confidence that often accompanies it when the business is profitable and begins to scale—and many founders develop what my colleagues and I refer to as The Paradigm of Invincibility, aka: “My s#!t don’t stink” syndrome.

None of this is intentional, of course. Most founders who find themselves with this malady are well-intended, good, hardworking people. They’re just human and so they fall into very human behavior. Knowing that doesn’t make it any easier to resolve the issue, however. Successfully addressing founderitis is, in my experience, nearly impossible for a board, CEO or their leadership team without experienced outside help.

In Naples, my intervention emphasized the “praise in public, criticize in private” approach. Putting our concerns on the table with everyone in that June meeting would have cornered the CEO and likely caused a negative spiral with thoughts of inadequacy, letting his team down and even possibly conspiracy theories or feeling the threat of mutiny. 

Rather than addressing it that evening after a long day and dinner wine flowing, I opted to ask him to meet for coffee an hour before we began our second day and asked his wife to join as well. Following a candor-with-respect approach, I kept the focus on the big picture, got them to list several wins and worked together to draft a back-of-napkin SWOT analysis about the company’s situation.

We were able to balance all the positive things he has accomplished, while also bringing to light the weaknesses and danger of founderitis. This all helped to balance the feedback and stay on the objective side of the issue as opposed to sliding into an area where he was feeling personally attacked. We allowed processing time, even delaying the start of our Day 2 meeting by an hour.

The result was outstanding, which is not uncommon when handled properly. Our CEO started off the Day 2 meeting explaining he had made some mistakes the prior day. He realized he had overshadowed the good works of the ELT. He then asked for a set of accountability coaches, one from the ELT and one of three outside advisors, and committed to meeting bi-weekly to discuss progress while openly inviting his accountability coaches to reach out to anyone in the organization to solicit 360-type feedback. He put the business first.

As with any behavioral change, he has experienced backsliding into symptoms of founderitis once or twice over the summer, but, vitally, he has been open to feedback and he’s course corrected quickly. We have also put many of the suggested strategies below in place, significantly lowering the risk to the business and its people. No, it is not perfect. But it is progress. And it is working.

Strategies for Beating Founderitis

What can you do in your organization if you have a case of founderitis? Some strategies I’ve deployed successfully over the years include:

1. Establish Clear Governance. Create a board of directors or advisory board with real authority. Define roles and responsibilities clearly.
2. Encourage Leadership Development. Invest in training and mentoring for emerging leaders. Promote a culture of shared leadership.
3. Implement Systems and Processes. Standardize operations to reduce reliance on the founder’s intuition. Use data-driven decision-making.
4. Facilitate Open Communication. Encourage feedback from staff and stakeholders. Create safe spaces for discussing organizational challenges.
5. Plan for Succession. Develop a transition plan for leadership. Consider interim leadership or co-leadership models.
6. Seek External Support. Engage consultants or coaches to help navigate transitions. Use peer networks for perspective and accountability.