‘Founders rarely make effective chief executives’

The Wilkinson family was recently criticised following the collapse of Wilko and the loss of 12,000 jobs.

An external chief executive had been appointed after a long gap, but one could argue 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 continuing to have too much say in how the business was run? And is it true of other companies where founders bring in experienced leadership but then tie their hands or meddle in decision making?

“Chrissie Rucker embodies the essence of The White Company but decided to focus on areas where she can add value and bring in other leaders to drive the commercial agenda”

Anita Roddick dreamed of having 10 shops and running the business from her kitchen table. The Body Shop went on to float and open 1,600 stores around the world – owned and franchised. Although some professional management was hired, I think it’s fair to say the company never lived up to expectations as a public company and, having grown to over 2,000 shops, was ultimately sold to L’Oreal in 2006 and then to Natura with 3,000 stores in 2017 and it’s back on the block again six 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 he was not the best person to run a Plc and one of the non-execs, Euan Sutherland, took over. A very public battle for control ensued, which Dunkerton won by a slim margin, and for the last four years he has been back in charge – but performance has continued to deteriorate and the business now has liquidity issues.

Matt Moulding is another high-profile founder/chief executive 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. 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.

Fill the skill gap

Other founders have decided early on what they are good at and what should be left to more experienced managers.

Chrissie Rucker, as founder of The White Company, embodies the essence of the brand, collaborates with creative teams and is certainly the face of the brand in marketing activity.

But she decided long ago to focus on areas where she can add value and bring in other leaders to drive the commercial agenda. Chief executive Mary Homer has been in place for six years and has continued to deliver strong year-on-year increases in sales and profit.

“I concentrate on the product and ensure 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,” says Drucker.

Peter Williams, former senior independent director at Asos and ex-chair of both Boohoo and Superdry, believes 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 says.

“Founders who survive and thrive over the long term tend to focus on the creative side, working in harmony with strong commercial and financial leaders”

Ben Francis founded Gymshark in 2012 and acted as chief executive until 2015. Over the next six years, he worked across all the key consumer-facing functions including brand, marketing and product. In his own words, he was “free to fail without consequence” while he learned to broaden his leadership skills. He then took the reins again in 2021.

That humility and self-awareness are part of what makes him such an inspirational leader as well as an incredibly successful entrepreneur – a rare combination.

Is he the exception that proves the rule?

Christian Owens, founder of fintech firm Paddle, stepped down as chief executive to become executive chair earlier this year. He 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.”

Founders rarely make effective chief executives 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.