There’s been a lot of chatter recently about the best way to run a company: “founder mode” versus “manager mode.” These terms represent two distinct approaches to leading an organization for entrepreneurs and business leaders. Understanding these modes is crucial for entrepreneurs and managers alike, as each has unique strengths and challenges.
Founder mode can be defined as staying deeply integrated in decision-making at every company level. Founders are often driven by a vision for the future and choose to immerse themselves in every aspect of the business. While daily tasks are delegated, managers aren’t usually empowered to make decisions independently.
Manager mode functions more like a traditional hierarchical model, with decision-making power dispersed throughout the organization and only the top strategic decisions bubbling up to the CEO. Executives who lead in a “manager mode” emphasize efficiency and structure and are focused on building strong teams to foster collaboration.
The current debate suggests founder mode is necessary to ensure the founder’s vision for the company is carried out at all levels. The idea is that in a hierarchy, there’s an incentive for midlevel managers to present a brighter picture to a CEO than exists. Because the CEO is far removed from many decisions, there is a risk of getting off track until it’s too late to correct course. Critics of this methodology have a simpler term for it: micromanaging.
Our take is focused on practicalities for business owners and CEOs: “Founder mode” often makes sense for tech companies where the business focuses on continuously developing new features and products. However, for labor-intensive industries like landscaping, where the focus is on execution, founder mode just isn’t realistic. Landscaping companies have crews operating over very distributed geographies, with the need for a supervisor to be able to make immediate decisions on-site. It isn’t feasible for a CEO to hold centralized decision-making power unless the company remains very small.
When landscaping companies want to scale, the CEO should focus on bigger-picture, strategic tasks, such as business development, customer relationship management and allocating the right resources to the right jobs. Another important task is choosing the right jobs to take on to ensure alignment with financial and strategic goals. A higher number of jobs isn’t always better; other factors like job costs, margins or resource allocation in relation to other business needs should be considered.
While landscaping CEOs need to set clear parameters for what kinds of jobs are aligned with the business's goals, they don’t need to spend their time reviewing every single quote. This is an example of operating in manager mode. Establishing clear parameters and empowering business development resources to make the calls on which jobs to accept allows the organization to respond to customers more quickly. It frees the CEO to focus on more strategic decisions to help the company scale.
Another area of focus for owners (and, in our opinion, the most important) is hiring the right people to put in those managerial or supervisory positions. This is a crucial tenet of manager mode: Hire the right people and let them do their jobs. Proponents of founder mode claim that this hands-off approach leaves too much risk for managers to make decisions incompatible with the organization’s broader strategy. This can be avoided by ensuring you hire managers who understand the business's goals.
One example in the landscaping industry is providing supervisors in the field with real-time job-costing and margin target metrics. When supervisors understand the regular and overtime hours as they are executing jobs, they can make real-time decisions to change execution tactics, manage margins and ultimately deliver better service to customers.
Part of the issue with the traditional manager mode is that the “hire the right people” point is stressed so much without much direction as to how to know who the right people are. We are proponents of a longer recruitment process, and we believe hiring the right people must go deeper than hard skills. Take time to get to know candidates well enough to feel comfortable that they understand your vision for the company and are a good cultural fit. Only then can you have the trust needed to operate in manager mode successfully.
With an objective framework in place and the right people in position to implement it, managers are empowered to make decisions as required by the needs of the business. Owners and CEOs continue to have a bird's-eye view of these decisions and the data that both led to and resulted from them. Because data is widely and quickly available at all levels, if there ever is an issue at a jobsite or in a particular function, this will be visible to an owner early on to step in if needed before things get too far off track.
Founder mode lessons
While running operations and decision-making from founder mode isn’t recommended, we think there are some excellent lessons a company of any type, including a landscaping company, can implement. These lessons center around the energy and people-focus of many who operate in founder mode. Things like holding skip-levels, knowing crew members personally and visiting jobsites are all part of a healthy, people-first culture and help all company members connect to the owner’s vision.
The founder versus manager mode debate will likely continue across the business world. Still, landscaping business owners that largely ignore the noise and focus on two key areas (data-driven decision-making and hiring the right people) will succeed as they seek to scale. By empowering managers, owners can concentrate on the most essential things: setting the company’s vision and strategy, keeping their managers accountable and consciously shaping their company’s culture.
Editor's Note: This article was cowritten by Chris Testa, president of United Right-of-Way, and Cole Jackson, senior vice president of Montage Partners.
