Founder-successor overlap: what it is and what it means

The founder-successor overlap is the phase in which founder and successor work together with responsibilities progressively transferred. The mechanism operates on three levels: as input, an initial distribution of power still concentrated in the founder; as transformation, an explicit schedule for transferring responsibilities; as output, leadership actually exercised by the successor, with the founder in a supporting position. An adequate length (roughly 3-5 years for mid-sized, well-structured companies) correlates with better post-handover performance. Too short, and the successor inherits the company without internal and external legitimacy; too long, and the successor cannot actually exercise leadership and the organization perceives confused leadership.

Distinctive: responsibilities progressively transferred
Distinctive: explicit schedule for transferring
Essential: work together
Essential: leadership actually exercised by the successor
Constant: 3-5 years
Constant: supporting position

Glossary

Founder-successor overlap

A multi-year phase in which founder and successor work together while responsibilities are progressively transferred.