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The Importance Of The Founder-CEO Paradox Of Success

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This paradox of success, as Wasserman (2003; 2008) calls it, implies that there is a higher turnover rate for founder-CEOs who are successful in leading the company to key milestones. This paradox is confirmed by other studies ( ), and suggest that founder-CEOs are not only replaced due to bad performances, but also because they were able to lead the organization to success. Due to the results of these studies, founder-CEOs face a dreadful dilemma since performing below expectations can result in the replacement of their position, but also performing well may cause them to lose their position. Founder-CEOs who value control over wealth, may choose for gradual and less profitable growth, instead of fast growth, in order to learn and adjust and …show more content…
Hence, when the CEO lacks the needed capabilities and traits to make the right decisions, the firm’s performance will suffer (Dubocage & Galindo, 2014). Appendix 1 lists some of the key qualities of a successful founder-CEO, who is able to lead the organization through different stages of growth and who is able to attract financial funds needed to succeed.
If the founder-CEO lacks (some of) these traits and capabilities, it can become an antecedent for the replacement of his/her position as CEO. Lacking vision, a large network or commitment for example can imply that the founder-CEO will be replaced since he/she will not be able to lead the organization to success in the long run. Absence of one or more of these qualities can strengthen the motives mentioned earlier ( firm performance, growth rate, and loss of confidence), resulting in the replacement of the …show more content…
As mentioned before, founder-CEOs sometimes step aside voluntarily from the CEO position because they feel burned out. The continuous stress, the highly demanding workload and the fact that there are ample guarantees for success and financial stability are factors that force some founder-CEOs to step down from their position or even quit completely (Wasserman, 2012). In some cases, the founder does not want to step aside, but is being forced to step down by the board of directors of venture capitalist because they lost confidence in the founder’s ability to lead the organization due to their inability to cope with all the stress, workload or insecurity (Dubocage & Galindo, 2014). Loss of motivation by the (founder-)CEO is detrimentally to the firm’s performance, since it will cloud the CEO’s judgement in all their decision-making due to absenteeism, personal (physical health) problems and productivity (Becherer, et al.,

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