Again, I'm going to steer clear of naming names in this piece, but it'll probably be pretty clear who and what I'm referring to. Just so we're on the same page, influencing your financial decisions or anything of the sort is not my goal here. Consider this just some food for thought, alright?
It's not an absolute rule, but there's a statistical trend suggesting that when the founders of a company aren't serving as CEO, the company might not be performing at its best, especially in the long run. In the worst-case scenario, the company could be in a downward spiral, eventually disappearing into oblivion.
As someone deeply invested in the market, I'm not particularly bothered by CEOs offloading shares or similar actions. They are human, after all, and they have personal lives. However, a founder leaving the company raises a red flag for me. It makes me wonder why.
Especially when the founders in question are acknowledged as genuine geniuses. Many of these exceptional individuals are known for their obsessive-compulsive tendencies—I simply refer to them as OCDs—and they are not inclined to pass on their "baby" to another easily. If they decide to do so, it usually signals that they feel their mission is complete and they are prepared to tackle new challenges. It's rare for them to make a return to the same company. You might already be thinking of someone who's currently involved in various endeavors, right? Indeed, that's the exact scenario I'm alluding to.
People with obsessive-compulsive tendencies find it nearly impossible not to be deeply involved in their creations. They feel compelled to lead as CEO. It's only when they no longer view the company as their "baby" that they might step away. Or, in some cases, they might leave this world altogether. Different circumstances, but the outcome is much the same.
If you're not someone with obsessive-compulsive tendencies, you might find this hard to grasp. But, (and yes, I am), living with OCD is both a curse and a blessing. Every genius—(no, I'm not claiming to be one)—is inherently obsessive-compulsive. Think of Michelangelo, Leonardo, Edison, or any other genius, and you'll likely find they all shared this trait. Having a certain type of obsessive-compulsive behavior almost seems like a prerequisite for genius. There are various forms of OCD, but I'm specifically talking about the kind that's linked to productivity. This type of obsessive-compulsive individual can't stand inefficiency and tends to be among the most productive people you'll ever meet. Yes, I consider myself one of them. The idea of wasting even a second on something inefficient is unbearable to me.
Imagine Michelangelo dedicating years to painting the Sistine Chapel ceiling without being driven by obsessive-compulsive tendencies. It's virtually impossible to conceive. And honestly, I don't envy his level of genius. Knowing firsthand the torment of striving for perfection, I can only imagine how much more overwhelming it must have been for someone of his caliber. In a way, you could say he was cursed with a lifelong compulsion for excellence. If you've never witnessed the ceiling firsthand, it's hard to grasp the full extent of his accomplishment. The initial reaction is invariably a stunned "Wow, this seems beyond human capability." It stands as a profound tribute to the extraordinary potential of obsession.
Antonio Gaudí, the visionary architect of the Sagrada Familia, is another prime example. His quest for perfection was so consuming that he devoted his entire life to this single project. Aware that he wouldn't see its completion, his fixation on achieving the sublime didn't waver. He was motivated by the desire to create something timeless. The Sagrada Familia stands as a tribute to both his genius and his obsessive-compulsive dedication. He foresaw that future generations might presumptuously think they could improve upon his design, ingeniously setting his creations at heights that could not be surpassed. It's impossible to add even a single story to the Sagrada Familia without compromising its integrity. Gaudí was indeed an obsessive-compulsive genius, a figure so extraordinary he seems almost otherworldly.
If you're looking to understand the essence of obsessive-compulsive geniuses, these two examples are paramount. The first time I encountered their works, I was so moved I nearly cried. And believe me, that's no small feat. I'm not easily impressed. Over the years, I've seen a myriad of things, but the creations of these individuals stand out as truly extraordinary. No photograph or video can capture their essence fully. Being physically present to experience their magnificence is the only way to truly grasp their impact.
Now, picture a genuine genius, an obsessive-compulsive CEO or founder, walking away from a company they still view as their own creation. It's inconceivable unless there are significant problems, or they no longer feel that deep, paternal connection, suggesting the company has grown up and they're set to pursue new challenges. Would Michelangelo have left the Sistine Chapel incomplete? Would Gaudí have given up on the Sagrada Familia? Absolutely not. In Gaudí's situation, although he didn't live to see the Sagrada Familia completed, his dedication was so intense that he left exhaustive plans for its future completion. The intricacy of his designs is such that even modern 3D modeling software struggles to capture the full depth of his vision. Truly, one must witness his work in person to fully appreciate the scale of his brilliance. The Sagrada Familia is anticipated to reach completion in 2026, coinciding with the centennial of Gaudí's passing.
Are we seeing eye to eye here?
Even without its founders, a company can continue to perform well for some time, but it will never reach the heights it could have with them at the helm. This is a statistical observation, a rule of thumb if you will. Following this logic, you'd understand that founders leave their companies (barring their departure from this world) because they see these entities as fully grown. It may take time for signs of decline to appear in such established organizations. You can attribute this to momentum, inertia, or whatever you prefer. For a while, these companies will thrive on the path set by their founders. However, inevitably, they will reach a peak and then begin to decline. It's challenging to find exceptions to this pattern.
Broaden this perspective, and you'll realize that this rule applies beyond the corporate sphere; it's practically universal. Lose the obsessive-compulsive leaders in any domain, including nations, and decline is almost certain to follow. History shows us this pattern repeatedly.
Have I mentioned that object-orientation can essentially be seen as pattern recognition? Indeed, on a larger scale, it's all about recognizing patterns. By identifying common threads throughout human history, you can make predictions about the future. It's not about having a crystal ball but applying a statistical rule of thumb. Focusing on a specific area like the corporate sector doesn't significantly alter the observable patterns. Embrace this pattern, view it through polymorphic lenses, and you'll find the outcomes are quite similar.
There's a Korean proverb suggesting that no wealth lasts beyond three generations. With over five millennia of history, Korea has observed and distilled this notion into a widely acknowledged rule of thumb, illustrating a compelling pattern across countless historical narratives.
Generally, succeeding generations lack the same drive as their forebears. They tend not to work as hard, be as productive, efficient, innovative, passionate, disciplined, focused, or determined as the first generation. The implication is clear: overall productivity is expected to decline with each subsequent generation.
The corporate realm is no stranger to this pattern. Every company is likely to follow a similar trajectory.
When a company parts ways with its obsessive-compulsive founder or founders, it's often a harbinger of eventual decline.
It's worth noting, however, that the company's immediate fate is also tied to its environment. In a favorable market and industry, the company might still flourish for a considerable period. On the flip side, in a less receptive or outright hostile environment, the company's decline could be expedited.
The saying that a conqueror's sons rarely surpass their fathers encapsulates a universal truth. It's prudent not to expect deviations from this rule.