The growth stage brings many challenges to blended value businesses, and one of the most significant concerning mission preservation involves changes in leadership during scaling, especially to the role of the founder. It is common in early-stage businesses for the founder to guide all aspects of the organization.
When companies begin to grow, however, things start to change.
From this moment onward, the involvement of the founder with the company must evolve as much as the firm itself does. At this point, formal governance systems and processes must be created to take the place of the informal ones employed during the start-up phase.
The transfer of responsibility from the charismatic individual, the founder, to the governing board is one hallmark of a more substantial shift toward a more systemized, collaborative approach that needs to take place in all businesses as they grow (Clark, Emerson & Thornley, 2014). For social entrepreneurships, it can signal a dangerous moment for the social mission. Often the founder’s leadership—his or her passion and vision—is what establishes the clear connection between the business and mission in the first place.
As the leadership shifts from founder to governing board, new ways need to be found to embed mission in the systems that will provide direction for the business from this point on. Shifting leadership from founder to board can be a challenge for many types of organizations, but it may present a particular obstacle for social entrepreneurships.
The figure of the founder looms large in the social impact world encouraged by a high number of prizes and programs aimed at individual entrepreneurs. Partly as a result of such well-meaning support efforts, some founders have risen to personal prominence alongside their blended value companies, becoming public faces for their businesses, ambassadors for their brand with high media, and field level visibility. At the growth stage, such over-emphasis on founders can create the conditions under which so-called founder’s syndrome can arise.