Are founders the best stewards of the brands they created?
Opinion is divided and so are the results!
The Wilkinson family was recently criticised following the collapse of Wilko and the loss of 12,000 jobs. An external CEO had been appointed after a long gap, but one could argue that this was too late and there was a lot of churn at the top, leading to uncertainty and a lack of a consistent vision and direction. Was this caused by the family’s continuing to have too much say in how the business was run? And is this true of other companies where founders bring in experienced leadership but then tie their hands or meddle in decision making?
Anita Rodrick dreamed of have 10 shops and running the business from her kitchen table. Body Shop went on to float on the LSE and open 1600 stores around the world - owned and franchised. Although some professional management was hired, the Roddicks stayed heavily involved and Anita certainly had strong views on product development, marketing and campaigning. I think it’s fair to say the company never lived up to expectations as a public company and, having grown to over 2000 shops, was ultimately sold to L’Oreal in 2006 and then to Natura with 3000 stores in 2017 and it’s back on the block again 6 years later.
Julian Dunkerton initially had great success with the Superdry brand - worn by celebrities and coveted by the consumer. Again the lure of public markets - and the wealth opportunity- was too great to resist and an IPO took place in 2010. A formal board was constituted, which subsequently decided that Julian was not the best person to run a plc and one of the NEDs, Euan Sutherland, took over. A very public battle for control ensued, which Dunkerton won by a slim margin and for the last 4 years he has very much been back in charge, but performance has continued to deteriorate and the business now has well publicised liquidity issues.
Matt Moulding is another high profile founder/CEO who enjoyed the financial windfall of flotation, but not the scrutiny or accountability. He firmly believes he is the best person to run the company, despite a slump in revenues and profit and a relatively new, heavyweight Chair and Board failed to persuade him that buying City AM was at best non core and at worst a folly.
Other founders have decided early on what they are good at and what should be left to more experienced managers.
Chrissie Rucker is a classic example. As founder of the White Company she embodies the essence of the brand and collaborates with creative teams, getting involved in product development and the look and feel of shops, the website and catalogue and is certainly the face of the brand in marketing activity. But Chrissie modestly decided long ago to focus on areas where she can add real value and bring in professional leaders to drive the commercial agenda. Current CEO, Mary Homer, has now been in place for 6 years and has continued to deliver strong year on year increases in sales and profit.
“I concentrate on the product and ensure that it remains true to our brand values and then look for leaders who can fill my skill gaps and take the company to the next stage of growth. We’ve had different CEOs according to the needs of the time and they have developed brilliant teams and become friends and mentors.”
Peter Williams, former SID at Asos and ex Chair of both Boohoo and Superdry believes that founders do a fantastic job in ‘creating something from nothing’, but eventually ‘run out of road’ and lack the experience to establish a professional structure. “They should be praised for creating the brand, but ultimately need to hand over the reins to a different set of leaders to take it to the next stage.”
He credits Nick Robertson as a self aware founder who knows his strengths and weaknesses; “he was good at growing the business initially and realistic about his own tenure in the CEO role. He remains on the Board as a touch point and shareholder and is a very reasonable and supportive NED”.
Ben Francis MBE, founded Gymshark in 2012 and acted as CEO until 2015, when he brought in the highly experienced Steve Hewitt to run the business. Over the next 6 years Ben worked across all the key consumer facing functions including brand, marketing and product and in his own words was “free to fail without consequence” while he learnt to broaden his leadership skills. He then took the reins again in 2021, with Steve stepping back to a non executive role.
This humility and self awareness is part of what makes Ben such an inspirational leader and also incredibly successful entrepreneur.
Is he the exception that proves the rule? Founders rarely make effective long term CEOs and those who survive and thrive over the long term tend to focus on the creative side, working in harmony with strong commercial and financial leaders.
Chris Owens, tech entrepreneur and founder of Paddle recently said:
“This is my first actual job. I’ve learnt everything that I’ve learnt about running this business while running the business. What I do know is that I don’t enjoy risk compliance and governance meetings. I get that they’re important, but I don’t love them. I also don’t particularly enjoy the annual budget cycle.”
