When companies grow up

Succession PlanningLeadership
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Claus Fischer
10月 11, 2021
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Succession PlanningLeadership
Executive Summary
Founders often care about their company as much as parents care about their child.
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When is the right time for founders to expand the management level - or even to leave it themselves? My thoughts on this based on some current examples.

Founders often care about their company as much as parents care about their child. Even before the birth, all thoughts revolve around the coming newborn. Once in the world, they know "their baby" and all its special characteristics best themselves. In the first months and years, parents and founders are united by the same goal: the healthy growth of their fosterlings.

The onset of their adolescence heralds the end of this phase and of parental influence.  Yesterday's little baby wants to stand on its own two feet and prove itself in the world of the grown-ups - even if not everything goes smoothly yet. As is the case with young people, this step also succeeds to varying degrees with companies. One of the key factors in determining how smoothly the transition goes is the course set in the first few years of life. 

Gorillas and N26 build sustainable structures with more top executives

A revealing example of this is the story of the fast-food delivery service Gorillas. Founded in the summer of 2020 by Kağan Sümer, Gorillas drivers now cycle through more than 50 major cities around the world - from Berlin, London and Paris to New York. But the rapid growth has downsides: Employees of the startup took to the streets in June 2021 in solidarity with a driver after he was fired, blocking a warehouse in Berlin-Mitte. The situation escalated to such an extent that even German Labor Minister Hubertus Heil (SPD) met with the Gorillas for talks.

Like other delivery services, Gorillas is also still in the red. The start-up needs more funds from investors. In an interview with Handelsblatt, Gorillas’ head of human resources, Deena Fox, now explained that she is currently looking for new employees for the management levels in the areas of technology, product, marketing, finance and human resources. This, she said, is intended to strike "a balance between the speed of our growth and long-term sustainability." Gorillas' perspective and strategy is thus shifting toward "a stronger focus on building a scalable business infrastructure," Fox said.

Neobank N26, founded in 2013 by Valentin Stalf and Maximilian Tayenthal, is also experiencing growing pains. According to industry experts, the startup had also long focused too much on growth and attracting new customers, neglecting to build solid structures and controls. An increasing number of suspected money laundering cases recently called the German financial regulator BaFin to the scene. In order to avert the threat of sanctions, N26 then announced that it would expand its management level to include a risk director.

Flaconi founders leave profitable company of their choice 

But not every adolescent immediately confronts their parents with such tangible difficulties. The example of Flaconi shows that things can work out differently. Björn Kolbmüller and Paul Schwarzenholz founded the startup after graduating from university - always with the goal of leaving the online perfumery one day. Six years later, the time had come: the perfume startup had been completely sold to the Munich-based media group ProSiebenSat.1, and two new managing directors had been found. For the founders, this was the ideal time to get out, as they revealed to businessinsider.de: At the time of their withdrawal, their "baby" was standing on its own two feet, was financially secure - and had recently even become profitable.

Growth sometimes requires experience and a fresh mind from the outside

Letting go of the next generation is not easy for parents or founders. However, some events, such as a gap year abroad, the first own child or the entry into a new market, offer the ideal time for this. For parents, it's reassuring to know that competent and experienced companions are on hand to help with this step. As part of the expansion of its European business, the US e-commerce home furnishings retailer Wayfair has decided to appoint Dr. Jens Uwe Intat as its European CEO. He brings 30 years of experience in building and managing leading e-commerce companies such as Amazon Germany or Electronic Arts - and gives the existing management team the good feeling of confidence with this experience. 

Founders and parents alike care about the success of their offspring. At a certain level of maturity, this requires new influences from outside and a step into the wider world. What a stay abroad without their parents might be for children, an IPO can be for companies. The founders of Autodoc, a Berlin-based online retailer of automotive spare parts and accessories, have made provisions for this step. Before turning the company into a stock corporation in September 2021, by the middle of this year they had brought two managers experienced with IPOs into the executive suite of their "baby," Christian Gisy as co-managing director and Bert Althaus as CFO. The founders now help steer Autodoc's fortunes from the supervisory board, among other positions.

The examples show: The love and sense of responsibility of parents and founders toward their children probably never ends in most cases. But instead of wanting to control everything themselves, it is often better to take a step back and act in the interests of their offspring. "When kids are little, give them roots. When they are big, give them wings," - this advice seems to be true for parents and founders alike.