Why founders make brilliant brand leaders

I've been thinking about the power of a particular kind of brand leader: founders. Many of the companies I admire are still run by their founders, or the founders at least still play an active role.

I experienced this first-hand with consultancy Added Value. A key reason for me joining in 1993 and staying till the company was sold to WPP in 2001 was the inspiration and leadership of the founders Mark Sherrington and Peter Dart.

Often the founders have come back after the company ran into trouble, showing just how important a role they play: Shultz at Starbucks, Dell at Dell, Jobs at Apple, Chuck Schwab at Schwab.

To see just how influential founders can be on a company's fortunes, check out below the Starbuck's share price before and after Shultz came back in Jan 2008. The gap with the Dow Jones index of top companies carries on widening after he re-joins. But then narrows from 2009 on.

Here's the same thing for Apple before and after Steve Jobs came back in 1998 (he was fired from his own company in 1985). After lagging the Nasdaq tech company index in the 90's, the Apple share price catches up then goes zooming past. Post Jobs Apple's stock is up 2500%, vs. +40% for the Nasdaq.

 

Why are these founders such brilliant brand leaders of the companies they head up?

1. "My name is on the door": founders have a unique dedication to upholding the quality of a company's product or service as their name is figuratively or literally on them. And they have an intuitive sense of what is on or off brand. That's why Bill and David Jordan still approve every cereal recipe. Often when founders leave they look on with dismay as standards slip, and eventually come back to "re-raise the bar", as was the case with Chuck Shwabb re-joining the bank that bears his name.

2. Inspirational storytelling: the founder has the role of not only CEO, but also CST: "chief story-teller". He or she is on a journey and people join along the way. And only they can tell the story of this journey in the first person. "When I started the business... when I hired the first person". You are not just doing a job. You share the vision, values and beliefs embodied by the founder.

3. Bang for your brand buck: founders can be a marvelous bit of the marketing mix, generating millions of dollars or pounds of free PR by telling their story. The most famous example is still probably Richard Branson. But many others have followed the same path. One example is Howard Shultz's book, "Pour Your Heart into It". On a smaller scale you have the founder and public face of innocent Richard Reed, who has featured in many magazines and on TV telling the story of the brand

Founders also present an obvious and huge headache in that they are mortal. You see this is in the sharp drop in Apple's share price when Steve Jobs health problems were revealed a couple of years ago. Even though there are some very able senior leaders, they're just not Steve. Same goes for Richard Branson at Virgin.

Family-run companies have the best shot at propogating the power of the founder brand. This is shown by Rupert Murdoch of New Corp and his son, James. Another example is the subject of a future post, Jonathan Warburton of the famliy bakers of the same name.

In conclusion, founders make unique brand leaders. In some cases, you may be lucky enough to work for one. If not, we can try and emulate some of their magic by writing and telling the story of our brand, and sharing their fanatical dedication to quality and innovation.

Comments

[Football Gifts]

You make some very good points in this blog. Founders do often suceed because they do have the knowledge, the passion and can inspire. Unfortunately there comes a time, with most businesses, where new blood is needed to take a business forward

[Vinyl Banners]

What a difference it makes to have the founder leading you. I figured the statistics would look something like this, with the occasional company who takes off with new leadership. It is amazing to see the different level of investment and passion, when dealing with the person who began the company.