Blackberry maker RIM - one of the latest victims of

Founder’s Syndrome: Corporations and Civilization



Civilizations are like corporations. At some point in their evolutionary rise as innovative and unique organizations, they fail to adapt to changing circumstances and drift into fatal vulnerability. History, of course, is crowded with the wreckage of civilizations that declined into oblivion after failing to rejuvenate themselves. Corporations follow the same route, as outlined in the ideas of Professor Noam Wasserman of the Harvard Business School and Christine Comaford, an expert on corporate structural dynamics (Globe & Mail, Jan. 28/12).

As Wasserman notes in his book, The Founder’s Dilemma, corporations that are rapidly successful because they have discovered new and unorthodox strategies or products often find that their “strengths early on tend to become pitfalls, [their] Achilles heel.” Comaford reiterates this observation with terms such as “Founder’s Syndrome”, “Founderitis”, and “severe reality distortion field”. All refer to a corporation’s inability to adapt to changing competitive circumstances because its old successful vision no longer fits evolving realities.

The corporate world is littered with vivid examples of Founder’s Syndrome. Despite selling 10 million cars by 1924, the Ford Motor Company almost collapsed in bankruptcy when its founder, Henry Ford, failed to embrace the fresh engineering that was remaking the auto. And when Walt Disney died, the stock value of Disney rose dramatically, apparently because his founding influence was blocking innovation. The latest victim of this dynamic is the maker of the Blackberry, Research in Motion, a corporation whose original ideas are being outdated by other electronic designs.

So, how is Founder’s Syndrome avoided? For Comaford, “the key is to establish a vibrant set of outsiders who ask tough questions.” For Wasserman, “you need people internally who push back and consider not just the best-case or expected scenarios, but worst-case situations, where you might have to adjust the vision radically.” The corporate trick for survival is constant evaluation and criticism — even of the founding principles that everyone holds sacred to the corporation’s identity.

Now transpose this corporate dynamic to our present civilization. Our modern
era is essentially founded on the principles of the Industrial Revolution. About 250 years ago, Europe underwent a dramatic change as human and animal energies were replaced by fossil fuels — first coal and then petroleum. Human effort was amplified enormously. (To test this notion, simply try pushing your car instead of moving it with the engine.) And the sophistication of the entire process was heightened by the marriage of industry with science, a partnership we call technology.

The consequences were incredible: massive production and distribution of consumer goods, huge utilization of natural resources, unimagined growth in food production, exponential generation of wealth, global travel and communication. But, like a corporation that has found an especially successful niche in the business world and risen with meteoric speed, our civilization is now showing cracks of vulnerability — the attributes of its success have now become its weaknesses.

Marvellous as this technological civilization is, serious indications are now
evident that the environmental impacts of this success cannot be absorbed by our planet’s ecosystems. The sustainability of unrestrained growth, powered by ever-rising quantities of fossil fuels, has become a legitimate concern. If this unfolding crisis of civilization were a corporate problem, Comaford would recommend, “a vibrant set of outsiders who ask tough questions.” Or for Wasserman, “you need people internally who push back and consider not just the best-case or expected scenarios, but worst- case situations, where you might have to adjust the vision radically.”

These “outsiders”, of course, are the environmentalists, climatologists, biologists, other scientists and critics who are asking “tough questions” and pushing for a radical change of “vision”. To those who are supporting and perpetuating the founding principles of the Industrial Revolution, together with its existing economic system, these “tough questions” are interpreted as subversive irritations that are undermining the success of a seemingly good idea. How can those who clearly benefit from such success, doubt the generous and lavish rewards that come from it?

The journey from a peak to a valley down a cliff  can be very sudden and very brief. Ask RIM. Ask Kodak. Or ask Yahoo that almost instantly lost over $20 billion in value because it refused to innovate in a changing communication world.

We live on a planet of rapidly deteriorating ecosystems. The disturbing environmental destabilization being unleashed by our civilization is pervasive, structural and profoundly serious. More than destabilizing, the results could escalate to fatal if they are not addressed immediately and dramatically. The critics who are trying to alert the system to these dangers are not enemies but merely perceptive “insiders”, fellow members of the corporate body who care profoundly about the well-being of humanity and the natural world that contains, sustains and enlivens everything we hold rich, dear and sacred.

As a civilization, indications are that we are facing Founder’s Syndrome, an outdated vision of success so fixated on past accomplishments that it fails to see their shortcomings. The warning signs are flashing for those astute enough to notice. If these alarms are disconcerting, so be it. Failed civilizations are far more tragic than failed corporations.