mabinda.com Business, Education, Technology Commentary.

Do you know why family businesses collapse with the death of the founder? It is because the founders did literally everything. They performed HR roles, operation roles, production roles, strategizing roles in essence the whole business depended on them. But think of companies. They are able to outlive their founders and still be thriving and profitable. It’s about building systems and structures. For instance, Ford is a 120 year old company yet the founder’s family plays a very minimal role in the running of the company. They are just there to receive dividends and nothing else. Even recent companies have systems in place. For instance, Bill Gates is not involved in the day to day operations of Microsoft any longer, yet he is the largest shareholder of the company. He was the chief software architect and the CEO during the company’s heydey and oversaw many of the company’s operations.

But then it reached a time when he had to hand over the company to his Harvard classmate Steve Ballmer and a few years later, to a longtime employee, Satya Nadella, one of the Indian Origin CEOs that are making a mark in corporate America. Delegating is about building systems as it is about a succession strategy. You want long after you are gone for your company to continue generating revenues for your children and grandchildren, although not many American workers seem to want to transfer wealth to their kids preferring instead to transfer it to charity. For instance, Bill Gates has said he will leave a wealth of no more than $100 million to each of his children and shift the rest to his charity, The Gates foundation. Just shows you how American billionaires have been impacted by generosity and how they want to transfer their wealth when they are still alive, as an act of love and not as an act of vanity.

Then think of how Google set up systems. From the onset, as soon as they secured enough VC funding, the founders Larry Page and Sergey Brin were shoved aside and an experienced telecoms guy Eric Schmidt brought on board as the CEO. Even when Schmidt left, Larry Page only briefly ran the company before delegating the CEO role to Sundar Pichai, another Indian Origin CEO that is making a mark in corporate America. Building Systems in place is the only way to ensure a company has the stress and tenacity to survive. In engineering, a material is often subjected to stress tests to ensure that it can survive for instance, conditions on the road when it’s used to make a car. Likewise for a company, building systems is some kind of stress test for a company in the event the founder is no more. It insures the company against the winds of uncertainty that every business is bound to undergo. When the founder makes everything about themselves, they end up crippling the longevity of the business and that’s not in good stead.