Founder Codependency: Why Your Business Can’t Grow Beyond You

AUDIO Why Your Business Can't Grow Beyond You: Founder Co-Dependency

VIDEO Why Your Business Can't Grow Beyond You

0:00 Your Business May Depend on You More Than You Realize

What Happens When Your Business Can't Grow Beyond You?

When was the last time you played a game of strategy?

• Chess. 
• checkers. 
• tic-tac-toe. 
• Tetris on your smartphone. 
• Monopoly.

Have you ever played one of those games and you just didn't want to stop?

You lose, you want to try again.

You win, you want to play again.

Something about the game draws you back. There's a challenge, a bit of anticipation. There's the possibility that you'll do better the next time. And before you know, you're sitting there playing another game. And another and another.

Now, we're not talking about addiction here. We're talking about something much more ordinary. That feeling of being engaged with something, that feeling that you want to keep doing something. Most of us have some experience with something like this, but let me take this in a slightly different direction.

What role do you play in your life that you don't want to stop playing?

Think about that for a moment. Maybe you are a founder, a CEO, a team leader, a manager, an individual contributor. Maybe it's something completely outside of work. Maybe a parent, a coach, a volunteer. Maybe you have a hobby that you are really passionate about.

Think about the roles you play.

• Which ones are you good at? 
  
  
• Which ones do you really enjoy?
   
• Which ones give you energy? 

And here's the question I really want you to think about: Which role would be the hardest for you to give up because there is something interesting about roles. 

We start playing them and over time, sometimes we begin to become them.

• You don't just work in finance, you are a banker. 
  
  
• You don't just manage people, you are a manager.
   
• You don't just build a company, you are a founder.

At what point does something you do become something you are?

And what happens when the role you play becomes a part of your identity?

1:43 Founder Codependency Begins When Dependency Runs Both Ways

What If the Dependency Runs Both Ways?

We've talked quite a bit on this podcast about founder dependency, the idea that a business can become dependent on its founder.

This is the phenomenon where the founder becomes a person everybody goes to.

• The founder makes the important decisions.
  
  
• They solve the difficult problems. 
  
  
• They become the final escalation point. 

And when that happens, the founder becomes a bottleneck.

We talked about this in the last episode, but there's another dimension to that relationship that I want to explore today:

What happens when the dependency goes in the other direction?

What happens when the founder becomes dependent on the business?

And what happens when both of those things exist at the same time? 

The business depends on the founder and the founder depends on the business.

I've been calling this founder codependency.

When this codependency develops, the organization can become structurally constrained from scaling to its next level of growth structurally.

If you find yourself in a situation where you suspect that your business may have developed this kind of a codependency and it may be limiting the growth of your business, stick around because I have some good news for you.

In this episode: 

• We're going to look at this founder codependency: how it happens, why it develops, where it helps, and where it can create problems.
   
• We're going to look at what this means for you, especially if building an organization that can thrive beyond the people who built it is important to you. 
  
  
• We're also going to talk about an important shift in the way you relate to your business and how that shift can help you architect the organizational structure of your business.
   
• And I'm going to give you a simple action you can take today to begin shifting from founder codependency to a business that's structurally designed to last beyond the people who built it.

3:32 The Questions We Ask Shape How We Think

Who Asks the Better Questions?

This is The Business Philosopher Within You podcast. I'm your host, Bhavesh Naik.

A quick thank you to you, our listener. Hey, listen, this podcast isn't about me telling you what to think. It's about helping you become your own best business philosopher.

Great organizations aren't built by people who have all the answers. They're built by people who ask better questions.

So as you listen, Challenge these ideas, test them in your organization. Like, subscribe, and follow, but most important, ask and answer questions, because the business philosopher that we are talking about is already there within you.

4:09 Creating Distance Can Be the First Step Toward Change

Can You Leave for Twenty Minutes?

I promised you an action and I wan to go ahead and give it to you right away. So you don't need to watch the rest of the video if you like.

So here's what you do, Mr. Founder, Madam Founder.

I want you to physically remove yourself from the place of your work for about 20 minutes. Take a piece of paper and pen with you and find a place where you can sit for 20 minutes by yourself. If you work in a commercial building, find a place that's outside the building. If you work in a home office, find a place that's some distance away from it, a café maybe.

And I want you to do something very simple: pretend that you don't own that business anymore. 

Create whatever scenarios you need to create to actually get into it. Maybe you sold it, maybe you got acquired, maybe you handed it to someone else.

Go beyond the intellect. Do whatever you need to do to get in the mind-frame and the sensory experience, the sights, the sounds, the feelings of it.

What would you see? What would you hear? Where would you be? What would your day look like? Really get into it.

And here's what you do next. Write down the exact feelings and the sensations that are coming up. And this doesn't have to be perfect. You don't have to write in a perfect prose or poetry. Just write down the words that come to mind that describe your feelings and sensations in that moment.

Maybe you feel relieved, maybe anxious, excited, empty, lost.

Maybe you feel free.

Maybe you feel all of those things at the same time.

Just write them down. When you're done, you can just sit there for a bit, soaking in the whole experience.

And then, when you go back to your office, I would like for you to do one small thing. Take one tiny action that would allow you to detach yourself in a very small way that would put some distance between you, the founder, and you, the person.

We're talking about something extremely small, not a dramatic change. Not taking 2 weeks off, not selling the company, not hiring a COO, just one tiny act of detachment.

Maybe you normally leave the office at 7:30 every night. Leave at 7:25.

Maybe you never take the time during the day to call someone who has nothing to do with your business. Set an alarm. When that goes off, make that call.

Maybe you always eat lunch at your desk. Eat that lunch in the conference room or the cafeteria.

Just come up with one physical action that allows you to step outside of the normal activities that you carry out during the day and pay attention to what happens.

So there you have it, the action I want you to take.

Now, maybe you are wondering, what does this have to do with creating a self-sustaining business that can outlast its creators. That's what we'll get into next.

6:48 We Can Become So Embedded in a Role That We Stop Seeing It

Are You Playing the Game… or Inside It?

Let's go back to the game.

When you're playing chess, you're outside the chessboard.

You're the player.

The board is over there.

The pieces are over there.

The rules are over there.

You can walk away. You can come back tomorrow. You can play someone else. The game continues to exist, but business is different.

When you're building a business, you're not simply playing the game.

You're helping create the game.

You may even be creating the rules of the game.

You're deciding who gets to make decisions, who gets rewarded, what the organization stands for.

You're building the structure, you're building the team, you're building the culture, and you're playing the game at the same time.

And that creates an interesting dynamic because the longer you play, the more invested you become.

Your money is in it, your time, your energy, your reputation is in it.

Your relationship may be affected by it and your identity can become invested in it.

That's where ownership becomes interesting. When you own something, you begin to experience it as an extension of yourself: your house, your profession, your family, your business.

And that's not necessarily a bad thing. In fact, that's part of what makes ownership so powerful. It creates commitment. It creates responsibility. It creates energy.

You care. You want to make it better. You want to protect it. You're willing to sacrifice for it.

Ownership is a strength of a founder, but there can be another side to that attachment.

Because if something becomes an extension of you, then what happens when something threatens it?

• A bad quarter can feel personal. 
• An employee leaving can feel personal.
• Someone challenging your decision can feel personal.
• And, eventually, stepping away from the business can feel personal. 

Because you are not simply stepping away from something you own.

You may feel like you stepping away from a part of yourself.

8:38 The Roles We Play Can Become Part of Our Identity

When Does a Role Become Who You Are?

Think about the roles you play in your life.

Founder, CEO, manager, leader, parent, coach, volunteer, whatever it might be. Some roles are simply things we do. Other roles become part of how we see ourselves.

And there's nothing inherently wrong with that. In fact, it's probably one of the things that allows us to commit deeply to something. When you identify with something, you care, you invest in it, you protect it. You want it to succeed.

That's a good thing.

But there's another side to identification: When something becomes part of who you are, what happens when you imagine losing it?

That's why the question I asked you earlier matters.

Imagine that you don't own the business anymore. You sold it, you exited, someone else owns it.

The business is still there. The employees are still there. The customers are still there. The organization continues, but you're no longer the owner.

What happens inside of you?

That's what I want you to notice, because your answer may tell you something about the relationship you have with your business.

9:36 A Business Can Give a Founder More Than a Paycheck

What Does the Business Give You?

And this brings us back to founder dependency.

We've spent a lot of time talking about one direction of dependency. The business depends on the founder. The founder becomes a person people go to, the person who makes the difficult decisions, the person who solves the difficult problems, the person who knows what to do, the person who ultimately makes the call.

That's founder dependency.

But what if the founder also depends on the business for identity, for purpose, for accomplishment, for status, for security, for a sense of being needed, for the feeling that comes from building something that matters?

Again, none of these things are necessarily bad. They may be exactly what helped the founder build the business in the first place. But now we have something different happening.

The business depends on the founder and the founder depends on the business. That's founder codependency.

10:32 Founder Identity Often Develops Without Conscious Decision

Did You Ever Decide Any of This?

So how does this happen?

Usually it's not a conscious decision. You start the company, you make the decisions, you solve the problems, you hire people, you teach them how things work, you become the person they trust.

The company grows, more people join, more decisions need to be made. And because you've been successful, people naturally look to you. You know the history, you know the customers, you know the strategy, you know what has worked. You can make decisions quickly, so you step in and you solve the problem.

That feels good.

The problem gets solved, the team gets an answer, the business keeps moving, and something else happens at the same time. The business learns to depend on you and you learn to depend on being the person who solves the problem.

The cycle reinforces itself.

11:18 Founder Codependency Can Become Part of the Organization's Structure

Is Your Identity Running the Org Chart?

And this is where this idea gets really interesting because the relationship eventually shows up in the structure of the organization.

The way decisions gets made, the way authority is distributed, the way information flows.

It shows up in the way people solve problems, the way people think about responsibility, the way people think about ownership.

Your relationship with the business has a structural impact on the business. 

Think about that for a moment.

The way you identify yourself with your business can affect the way your business operates.

• If you see yourself as the person who has to make the important decisions, decisions will continue to flow towards you.
  
  
• If you see yourself as the person who has to solve the difficult problems, the problems will tend to flow towards you. 
  
  
• If you see yourself as a person who ultimately owns everything, ownership may never fully move into the organization.

So founder over-identification doesn't stay inside the founder. It can become part of the way the organization is built.

And that's why I don't think the answer is simply to change your identity.

And I don't think the answer is simply to change your structure either.

You need both.

At one level, you need to rethink your relationship with your business. You have to begin separating who you are from what you built. But as you do that, you also have to make structural changes in the organization.

You have to change where decisions are made, where authority sits, how responsibility is distributed, how people solve problems. Because otherwise the change in your identity may never make its way into the organization.

The reverse is also true.

You can redesign the structure, you can move decision-making, you can delegate authority, you can create all kinds of systems, but if you keep seeing yourself as the person who ultimately has to make every important decision, you may simply pull everything back towards yourself.

So the two have to work together.

As you untangle your identity from the business, you have to make structural changes that allow the new relationship to propagate through the organization.

That's the part I think is often missed. The identity affects the structure and the structure reinforces the identity. So if you want to change one, you have to pay attention to the other.

13:34 Systems Can Support an Organization Without Changing Its Identity

What Can a System Never Decide for You?

And this brings us directly back to our last episode, because if you've been listening to me talk about structure, you might be thinking, "Okay, so I just need to redesign the organization."

Not quite, because if the relationship between you and the business doesn't change, the structure can eventually pull back towards the old patterns.

This also brings us back to the idea of systems.

Systems are useful.

They create consistency, they create clarity, they reduce unnecessary variation, they can make a business much more efficient. 

However, 

• A system can't decide what your business means to you,
  
  
• A system can't tell you who you are without your business,
  
  
• A system can't change the relationship between a founder in an organization,
  
  
• And a system certainly can't stop a founder from stepping back into the center every time something feels uncertain.

That's why you can build more and more and more systems and still have a founder-dependent organization.

The system may be working, the relationship is still working against them.

14:35 Dependency Becomes Visible in the Distribution of Authority

Where Does Authority Actually Live?

And there's another side to this.

It's not just that the founder becomes accustomed to being needed, the organization also becomes accustomed to needing the founder.

• People learn where the authority really lives. 
  
  
• They learn whose opinion matters most.
   
• They learn where the final answer comes from.

And this happens even when nobody consciously decides that this is how the organization should work.

It emerges.

That's why founder dependency can be so difficult to unwind. You're not just simply changing a process. You're changing a pattern that people have learned.

And the founder is a part of that pattern too. The founder has learned it. The employees have learned it. The organization has learned it.

Everybody's participating in the same relationship.

That's codependency.

15:23 Founder Dependency Can Spread Throughout an Organization

Who Else Does Everyone Depend On?

And I want to broaden this beyond the founder for a moment, because if we are talking about a self-sustaining organization, this isn't something the founder creates for everybody else.

Everybody participates in the organization.

And dependency can happen at every level:

• A senior executive can become the person nobody can operate without.
   
• A manager can become the person everybody goes to. 
  
  
• An individual contributor can become the only person who knows how something works.

And people can become deeply identified with their jobs.

They can become dependent on the organization for more than a paycheck: for identity, for belonging, for accomplishment, security, meaning. 

So the question of sustainability isn't just can the founder leave?

It's also:

• Can people contribute deeply without becoming indispensable? 
  
  
• Can they take ownership without becoming trapped by it?
   
• Can they be important without becoming the center?

That's part of what makes an organization sustainable.

16:24 Creating Space Changes What You Can See

How Can Awareness Bring You Greater Clarity?

So what do we do with all of this?

I think the first shift is simply to recognize the relationship. You may be dependent on your business, your business may be dependent on you, and those two things can reinforce each other.

Once you see that, you can begin to create some space, space between yourself and the business, space between identity and role, space between ownership and control, space between responsibility and being indispensable.

And when you create space, something else becomes possible.

Other people can think, other people can decide, other people can take responsibility.

The organization can develop its own identity, and you can begin to discover who you are when you're not required to be the person at the center of everything.

That's where organizational architecture becomes important.

You begin shifting authority, shifting decision-making, shifting knowledge, shifting ownership, shifting the way people relate to the organization and, over time, the structure begins to change.

17:29 The Action Creates Distance Between You and the Business

Why Would Twenty Minutes Change Anything?

And that brings us back to the action I was asking you to take.

Why does this work? Why would going away for 20 minutes, sitting somewhere that's not your normal place to work and pretending that you don't own the business anymore actually help?

It's not because 20 minutes away is going to fix your business.

It's not.

What it can do is create a little bit of distance between you and the business, between you the person and you the business, between your identity as a person and your identity as a founder.

And when you create that distance, something interesting happens.

You create a little gap.

And in that gap, you begin to see things that you couldn't see when you were completely immersed in the business.

• You may have a different idea. 
  
  
• You may see a different problem.
  
  
• You may see a different way of making a decision. 
  
  
• You may notice a role that you've been holding onto.
   
• You may notice a decision that doesn't actually need to come to you.
   
• You may see an area where someone else could have more authority.

That's the beginning.

The action itself doesn't restructure your business. It gives you the space and awareness to begin restructuring it.

And that's an important distinction because as you begin to separate yourself from some of the roles you become overly identified with, you can begin to change what those roles look like inside the organization.

You can create more empowerment, you can move decisions and authority, you can distribute responsibility, you can begin building structures that don't require you to remain at the center.

And then something else happens.

The structure starts reinforcing the change in you. You become less dependent on the business, the business becomes less dependent on you. Other people become more capable of making decisions. The organization develops more of its own capacity.

And that can become a reinforcing cycle.

You create some distance, that distance creates awareness, that awareness allows you to change the structure, the new structure creates more independence, and that independence creates even more space.

Over time, you begin to get something different.

You get a founder, you, who's less tied to the business, but you also get an organization that has become more capable of operating, thinking, and adapting without pulling the founder back into the center.

And that's where this starts becoming much bigger than a 20-minute exercise.

It becomes a different way of architecting an organization.

19:55 Ownership Can Become Another Form of Identification

Who Really Owns Your Business?

And this brings up another question I've been thinking about.

Who owns your business?

Now, legally, that's usually pretty straightforward. I'm not talking about legal ownership.

I'm talking about something deeper.

• Who feels ownership? 
  
  
• Who feels responsible?
   
• Who feels that the success of the organization is their success?
   
• Who feels that its problems are their problems?
  
  
• And who has made the organization part of who they are? 

Because ownership can be incredibly powerful.

It creates engagement, it creates responsibility, it creates commitment, but it also raises an interesting question.

Can you own something without allowing it to own you? 

I think there's a fascinating conversation there, and it's a question for founders, but it's also a question for everybody in the organization.

20:42 The Shift Begins With a Small Action

What Will You Change This Week?

So let me come back to where we started.

We talked about games, we talked about roles, we talked about identity, we talked about dependency, and we talked about the relationship between a founder and an organization.

The business depends on the founder, the founder can depend on the business, and when those two dependencies reinforce each other, something interesting can happen.

The relationship can become structural.

It can show up in the way the organization makes decision, the way authority works, the way people solve problems, the way people think, and that can constrain the organization's ability to grow beyond the people who built it.

So if building an organization that can thrive beyond its creators is important to you, start noticing the relationship.

Then create a little space, 20 minutes, one small action, and see what happens.

Because sometimes the first step towards changing an organization is changing the space between yourself and the organization.

This is the Business Philosopher Within You podcast, and I'll see you next time.