Jul 03, 2013

When to Share Your Baby

Sometimes you have to let go, but it sure hurts when it’s your own company.

At social-games maker Zynga, which has been under pressure from Wall Street over its poor performance, founder and CEO Mark Pincus will step down as CEO. Replacing him will be Don Mattrick, who comes from Microsoft’s Xbox business. Pincus will remain as chairman and chief product officer.

Jena McGregor at the Washington Post wonders if Pincus will be able to give up the controls. “Founders—as we’ve been reminded repeatedly lately—are opinionated about the strategies their babies should take, risk getting their egos bruised because of how closely they identify personally with the organization, and generally have a hard time letting go,” she writes, noting that Pincus has been named one of the five worst CEOs of 2012 by Dartmouth’s Sydney Finkelstein. She says that Pincus also has a reputation for micromanagement and foiling outside reformers.

Perhaps such criticism is warranted. But Peter Drucker would say that Pincus, so far, has at least done the right thing in stepping aside. “As a new venture develops and grows, the rules and relationships of the original entrepreneurs inexorably change,” he wrote in Innovation and Entrepreneurship. “If the founders refuse to accept this, they will stunt the business and may even destroy it.”

Image credit: Aaron Gilson

Image credit: Aaron Gilson

The tricky part is that “even among the founders who can accept that they themselves need to do something, few know how to tackle changing their own roles and relationships,” Drucker added. “They tend to begin by asking: ‘What do I like to do?’ Or at best, ‘Where do I fit in?’ The right question to start with is: ‘What will the venture need objectively by way of management from here on out?’”

Successful examples of leaders stepping into smaller roles included Edwin Land of Polaroid. As we’ve noted, Land gave himself a research post rather than the title role. “The company itself, in its day-to-day operations, he left to others to run,” Drucker pointed out.

A big issue is timing—and it’s here that Pincus may have fallen short. “The question, ‘Where do I belong?’ needs to be faced up to and thought through by the founder-entrepreneur as soon as the venture shows the first signs of success,” Drucker wrote. “Indeed, it might be best thought through before the new venture is even started.”

How can a founder know when it’s time to take a different role?

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