THE PATTERN OF OUSTING ENTREPRENEURIAL FOUNDERS
In business circles, it is well known that the person who had the initial inspiration for an entrepreneurial startup often doesn’t last longer than a few years after the company has begun to achieve success. For example, the story of Steve Jobs’ ouster from Apple in 1985 was widely followed (as well as his return to Apple in 1997). The reasons for Jobs’ firing are basically the same as those of Jerry Yang at Yahoo, Jack Dorsey at Twitter, Mike Lazaridis at RIM and numerous others. That is, startups require one set of management skills and techniques while the running of a maturing company requires a different management skill complement. Entrepreneurial arrangements often rely on a small number of highly talented individuals who might keep very long and unorthodox hours in the pursuit of exciting breakthroughs in products and services. As the company becomes more successful and hires more staff, there is a “bureaucratization” that becomes necessary. (And, often, the bureaucratic practice engulfs the entrepreneurial activity.) This was the challenge of Apple when they got rid of Jobs – as well as the reason why they hired him back. In 1985 Apple was trying to bureaucratize for growth; in 1997, they realized the need for infusion of greater entrepreneurship into the company. Jobs has said that getting fired was the best thing that could have happened, explaining that the heaviness of success was replaced by the lightness of being a beginner again and allowed him to enter one of his most creative periods.
Companies frequently lose sight of the need to have both creativeness/ entrepreneurship as well an organizational framework (bureaucracy) present in the organization. In my book ALL THE MOVING PARTS: ORGANIZATIONAL CHANGE MANAGEMENT, I discuss this complexity as well as processes for acquiring.
Entrepreneurship is a constant need for companies, at any stage of their growth. Join in this discussion at the FORUM: All The Moving Parts: “CEOs AND ENTREPRENEURSHIP”