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The one kind of people who aren't named in this article: investors. Ben Horowitz of A16Z explained why A16Z prefers to invest in founder-led companies. (...) The macro reason: that’s the way most of the great technology companies have been built (...) Professional CEOs are effective at maximizing, but not finding, product cycles. Conversely, founding CEOs are excellent at finding, but not maximizing, product cycles.…
"We investigate these issues using the World Management Survey (WMS), an international data set providing detailed information on the management practices for a large sample of medium and large MANUFACTURING [emphasis added] firms (Bloom et al. 2014; Bloom and Van Reenen 2007) in thirty- two countries."
Sure, it seems relatively believable that large and medium sized manufacturing firms are better run by professional managers than their original founders, given the dynamics of that particular industry. Medium and large manufacturing firms require relatively common knowledge, have repeatable processes, are high volume/low margin, use commoditized inputs and outputs, as well as many other factors that make it ripe for bean counting as opposed to risk taking and vision. This is a straw man if I ever saw one.
[Edited typo]
What if a product CEO first spent time learning to grow and scale businesses via consulting or working in a professional capacity, and then walking away from it to start something?
It seems likely greater number of future CEO's will come from the path of CTO'S who have learned to touch, support and grow all areas of the business.
Did nobody read the underlying research of the centerpiece study supporting this hypothesis? How did this headline and the article get written? "We investigate these issues using the World Management Survey (WMS), an international data set providing detailed information on the management practices for a large sample of medium and large MANUFACTURING [emphasis added] firms (Bloom et al. 2014; Bloom and Van Reenen 2007…
I have not read the entire underlying study behind the article but I feel the headline may be a bit misleading. From the article: "But founders’ poor success rate as CEOs also has to do with the kind of personality that’s compelled to start a company in the first place. People often start companies precisely because they want the freedom to run things as they wish—which sometimes includes poor managerial decisions."…
Reaching for large jar of salt