I overheard someone asking last week why so few start-ups have come out of certain very successful Canadian tech firms. Though I did not chime in at the time, I would suggest that the answer lies in the entrepreneurs who founded and in some instances continue to drive these businesses. Specifically, few tech sector entrepreneurs nurture future entrepreneurs or even strong leaders for that matter. I would even argue that small communities which are dominated by great entrepreneurs usually go entrepreneurially dry when those individuals leave the scene (notwithstanding Blackberry/RIM from which many entrepreneurs and new ventures emerged). Let me explain…

Successful entrepreneurs are that rare mishmash of vision, drive, determination, resilience and whatever else makes them special. Often idiosyncratic but with instincts that rarely fail them, these explorers travel places where few others have the courage to even imagine. And they lead from out front, not as benevolent travel guides, but as supreme leaders. It is their adrenaline-fed adventure, risks be dammed, and it is their glory, or death. Because of this, entrepreneurs tend to be surrounded by role players who execute tasks and take direction, individuals who do not need the spotlight, and even better, voluntarily redirect any light that wanders in their direction back to the entrepreneur who feeds off of it. This is not to suggest that entrepreneurs have no interest in driven, bright, charismatic, high performing leaders. The entrepreneur is often fascinated by these people and the specialized knowledge or skills they possess, the companies they have worked for, and the successes they have had. The entrepreneur wants what they have and what they know. In some instances, the entrepreneur craves the business maturity and progress which the addition of these executives promises…and so pursues them. And successful entrepreneurs tend to get what they want.

But when entrepreneurs hire high performing professional managers, two outcomes are most likely. In many instances the sponge-like entrepreneur quickly absorbs the specialized knowledge or wisdom of the newly hired executive. As this happens the infatuation fades and disillusionment creeps in. The true value of the now figured-out, suddenly all-too-human executive is questioned, as is the premium compensation that was paid to attract him or her. It is only a matter of time before the entrepreneur begins to resent the executive and they are discarded. The departing executive never really knows what hit him or her.

In the second scenario, the entrepreneur finds that the newly hired star executive has brought unwanted baggage. Perhaps they are independently minded; perhaps they are insufficiently deferential, occasionally questioning the entrepreneur; perhaps they view the entrepreneur’s ‘hands-on’ style as unnecessarily meddling; perhaps they push for change that cuts a little too close to the entrepreneur; or heaven forbid, perhaps they have an ego which craves credit or limelight. While it is likely that the career successes of many of these star performers were built on the strength of many of these very same attributes, they do not bode well when working for the entrepreneur. The other executives are also not amused by someone who asks questions and threatens change and they start to whisper to the entrepreneur that this person is not fitting in. It is only a matter of time before the entrepreneur eventually finds a way to get rid of the executive.

For better and worse, entrepreneurial leaders find themselves surrounded by a coterie of followers. These people execute, serve, tolerate and above all stay loyal to their entrepreneurial benefactor. But living in the shadows, tethered to an entrepreneurial life force is not the ideal incubator for the next generation of entrepreneurial leaders. Dependence does not breed independence, lifelong followership does not foster leadership, comfort does not beget the entrepreneurial itch. And even when these executives leave or are pushed out of the nest they tend to be entrepreneurial poseurs, handicapped by that part of them which served them so well under their previous master. Few thrive…
And so, next time you look around at the many highly successful Canadian tech firms and ask yourself why so few new or successful companies have been created from their loins you will know why….

About The Author

Robert Hebert, Ph.D., is the Managing Partner of Toronto-based StoneWood Group Inc, a leading executive search firm. He has spent the past 25 years assisting firms in the technology sector address their senior recruiting, assessment and leadership development requirements.
Dr. Hebert holds a Masters Degree in Industrial Relations as well as a Doctorate in Adult Education, both from the University of Toronto.