Why Do Founder-led Companies Keep Outperforming?

David Vélez says founder-led companies continue to outperform for decades because, when a leader has to choose, the founder mode wins, especially in big technology shifts where the founder's assets show up more clearly than the advantages of a chief executive.

A founder and a chief executive are different functions that do not necessarily fit together. The founder is impatient, carries a huge sense of urgency, and wants to move extremely fast. The chief executive has to be more patient, more systematic about decisions, and bring systems thinking into scaling the organization. The two sides can conflict: impatient on one end, patient on the other. Chief executives tend to be better managers because they build systems and think from a system perspective. Founders tend not to be good managers. They lack patience for one-on-ones and coaching, want to run, and much of the time act more like individual contributors than managers.

The two titles can be redesigned so one person does both, with a little more patience when the moment needs it. The default is still to keep more of the founder than the chief executive.