In the founding journey of any startup, a clear chain of command can mean the difference between soaring success and spiraling chaos. When two or more people join as co-founders, there are always chances of having differences of opinions between founders on who should be the leader. Sometimes, they may not decisively declare one of them as the leader. Usually this is because of the feeling that both are equally important. In certain cases we see more than two people as seen as equally powerful and they all can make critical decisions. By declaring one of them as leader, in some cases there is some kind of rivalry between founders.This gets amplified when one of them gets a disproportionate share of public lime light, because of the role. While collective leadership has its merits, there’s a compelling argument for the effectiveness of a single leader at the helm. Here’s why.
The Need for a Single Leader:
1. Clear Decision-making: With a singular leader, decisions can be made faster without the need for extended consultations or deliberations. This speed is essential for startups, which often have to adapt and pivot rapidly. This does not mean that there should not be consultation at all. Usually these consultations may result in more than one possible way to do things. With each approach, the outcome may be different. But only after we make the decision will we be able to see the outcome. And continued debate may lead to risk aversion and slow decision making. In most cases making even a wrong decision in time is critical, if such decisions can be reversed. One of the leaders should be given this authority to take the final decision even if there are uncertainties associated with that decision. It is always very hard to come to a conclusion collectively. Once this decision is made all the others must support the leader.
2. Consistent Vision: A single leader ensures that the company’s vision remains consistent and undiluted. Multiple leaders might interpret the company’s mission differently, leading to varied strategies and potential deviations from the intended path. Single leader should be driven by vision and purpose. All decisions must be supported by how that decision or choice is aligned to vision and purpose. So that conflicts can be avoided.
3. Direct Accountability: When there’s a single person at the top, there’s a clear line of accountability. This clarity can boost stakeholder confidence, knowing there’s one individual responsible for the company’s trajectory. By making multiple people accountable, there may be a tendency not to own anything. Direct accountability helps the individual to have clarity to move quickly.
The Pitfalls of Multiple Equal Leaders:
1. Potential for Conflict: With multiple leaders sharing power equally, disagreements are almost inevitable. These disputes can lead to delays, reduced morale, and even public relations challenges if they spill out into the public domain.
2. Incoherent Decision-making: Divergent opinions can lead to patchwork decisions that lack coherence. A product might be pulled in multiple directions, or marketing campaigns might have mixed messaging.
3. Mixed Signals to Stakeholders: Multiple power centers can confuse stakeholders, be it employees, investors, or partners. It raises questions like: Who do we approach for a final decision? Whose word is final? This ambiguity can erode confidence.
Sharing Power Without Diluting Leadership:
A single leader doesn’t equate to autocracy. It’s entirely possible (and advisable) for a primary leader to share decision-making power.
1. Focus on Purpose: By having a well-defined and communicated purpose, the leader can ensure that all decisions, regardless of where they originate, align with the startup’s core mission.
2. Establish Clear Domains: While there’s a single leader, other key figures can have clear domains or areas of expertise. For instance, while the founder might make the final call on company direction, the CTO might have autonomy on tech decisions.
3. Foster Candid Conversations: An open culture where team members can express their views candidly can lead to better decision-making. It ensures that the leader has all the necessary perspectives before making a call.
4. Wealth Creation is more critical than control : Control that does not aid wealth creation is not good for anyone. Wealth Creation also requires control. But that control should be given to the best person in the context to understand and decide which creates the highest long term value. Great Teams are a great team of leaders, in which following when required is also a leadership trait. Titles are irrelevant, but knowledge and competence is.
Clarifying Purpose to Manage Leadership Conflicts:
Conflicts often arise from ambiguity. When everyone understands the company’s purpose and their role in achieving it, many conflicts can be preemptively resolved.
1. Aligning Vision: Regularly communicating and reiterating the company’s vision ensures that everyone is on the same page, reducing potential disputes.
2. Providing a Reference Point: Whenever there’s a disagreement, referring back to the company’s mission can provide clarity. It offers an objective point of reference to resolve subjective disputes.
3. Building Trust: When everyone is aligned in purpose, it fosters mutual trust. Team members know that decisions are made with the company’s best interests in mind, reducing potential friction.
Having a Board which has oversight: Although legally it may not be required to have a board for a startup with external members. It is a good idea to have boards consisting of external board members early on. These board members should constitute experienced professionals, mentors who bring wisdom to the table. They can intervene to give feedback to these founder executives objectively. The accountability will be clearly scrutinized during these board meetings. It also provides an opportunity for the founders to get an unbiased evaluation of their actions and outcomes. Such a practice prepares them for later days when they may seek funding and support of external stakeholders.
Founders can either focus on Control obsessively or focus on wealth building. When the focus is on controlling, wealth building takes a back seat. This leads to ventures not reaching their full potential. All decisions should focus on wealth maximization by building a valuable organization.
In conclusion, while the collaborative spirit of a startup is invaluable, the clarity and coherence of a singular leadership structure offer undeniable benefits. By focusing on purpose and fostering open communication, a single leader can ensure that the power is shared without diluting responsibility. This approach not only streamlines decision-making but also ensures that the startup remains agile, cohesive, and primed for success.
A J Balasubramanian is a serial entrepreneur, with over three decades of startup experience in founding companies, mentoring / incubating startups and writes regularly on topics of interest to startups.
