Replacing Founders with CEOs: A Discussion with Paul Doscher, CEO, Lucid Imagination (Part 6)

Sramana: The problem with young founders is that they do not know what they don’t know.

Paul Doscher: That is exactly right!

Sramana: I was in that category. When I was going through that process, there was a big limit to how much I knew.

Paul Doscher: When you face that situation, you can deal with it in two ways. One, you can be intimidated by it. You can be in complete denial and pretend that you know everything, but that leads to bad decisions because you are making decisions based on pretense of knowledge. The other way to address the scenario is to admit you don’t know much about a subject area and set out to find the most qualified person in that area you can find and use their skills to index that area. You then set out to work with that person. You had a bad experience when you tried to be mentored. I don’t think that will always be the case.

Sramana: I think if the person coming in had been a mature, capable, and confident person things would have worked. It turned out that he was an extremely insecure person, which we did not realize during the interview process.

Paul Doscher: I think objectivity about what you know and what you don’t know is the key element. If you are truly and sincerely interested in gaining experience and moving the company forward, then things will work. It is all about building the right set of skills so that the company can achieve its vision. Too often people let their egos get out in front, and they try to dominate a company.

Sramana: I was talking to a friend who is on a lot of boards. He was reading a book called “How We Think,” which he did not find well written and which was hard to read. I asked him what he was learning, and he persisted through reading it. It discussed the natural tendency of human beings to engage in power struggles. Somebody establishes power over the other soon or later. If that struggle exists in a founder/CEO relationship, it will be a problem. Both sides need to be aware of that reality. A framework needs to be put in place to help those transitions play out better.

Paul Doscher: I disagree to an extent. In order for a company to win, there can be only one leader. There is one ultimately decision maker, and that is why the CEO is in place. As long as the power struggle does not erode the office of the CEO, then I think it can ultimately work out. If in fact there is passive or active denial in that regard, you can have all the power struggles you want, but things will ultimately fail.

Sramana: I agree. There can be no illusions of sharing power.

Paul Doscher: In more cases than not, the board is the one that makes the move. Zuckerberg remained in control of the board.

Sramana: The Google guys did a more sophisticated and complicated deal. They did accept an outside CEO, but the power structure of that trio lay with Larry Page and Sergey Brin. Eric Schmidt acted in a mature way in that situation.

Paul Doscher: That would make sense. Google is an engineering driven company. With Eric being the outside CEO, he could accommodate things from the outside perspective. At the end of the day, at an engineering company like Google, the power is going to lie in the engineering decisions.

This segment is part 6 in the series : Replacing Founders with CEOs: A Discussion with Paul Doscher, CEO, Lucid Imagination
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