A company that depends on its founder to function is not a sustainable company. We describe the concrete steps to build an organisation that can thrive regardless of who leads it.
The most uncomfortable question I ask an entrepreneur in our first meeting is: “What would happen to your company if tomorrow you could not come to work?” The answer I hear most often is a silence followed by: “Well… it would be complicated.”
That “complicated” hides a reality every entrepreneur should worry about: if the company cannot function without them, it is not worth what they think it is worth.
The first step is an honest assessment. Who closes important commercial deals? Who makes daily operational decisions? Who manages relationships with banks and key suppliers? Who really knows the numbers? Is anyone capable of making decisions in the founder’s absence?
Step 1: Document critical processes. What is in the founder’s head and nowhere else is knowledge at risk. A two-page document per process is sufficient.
Step 2: Delegate with method. Not letting go, but transferring responsibility gradually. The founder identifies a habitual decision, delegates it to a specific person with clear instructions, reviews the decisions for a month, then consolidates the delegation.
Step 3: Build a management team. At minimum, a middle-market company needs an operations director, a CFO, and a commercial director. Incorporating external managers requires time, patience, and humility from the founder.
Step 4: Formalise key relationships. Client, supplier, and banking relationships must become institutional, not personal. The client should know and trust the commercial director, not just the founder.
Step 5: Implement corporate governance. A functional board, monthly reporting, annual budget, and documented strategic plan — these tools allow any competent person to assume direction with sufficient information and adequate processes.
This preparation takes two to three years. It requires deep cultural changes in the founder, the team, and the organisation. These are the two most profitable years an entrepreneur can invest before selling or retiring. A prepared company is worth substantially more than a dependent one. And, more importantly, it can continue to exist regardless of what happens to its founder.
That is the best legacy any entrepreneur can leave.
Dirk Manuel Martens Jimenez Founder, Blue Mountain Capital
Founder of Blue Mountain
Over 15 years investing in Spanish companies with patient capital. Expert in business succession, corporate governance, and middle-market investment.
By Blue Mountain Capital
By Dirk Manuel Martens Jiménez
By Dirk Manuel Martens Jiménez
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