WHEN YOU ARE THINKING ABOUT BUILDING A COMPANY TO LAST

Dear Founder,

I’ve written about going from an idea to relevance and then to scale. However, a truly successful business—a lasting one—doesn’t stop there. Let’s talk about going from scale to legacy.

Before doing this, let me first start with a disclaimer: If you are still truly a startup, you shouldn’t be focused on legacy right now. Your focus must be on making your company relevant and then scaling. If you truly are already in scale-mode, then perhaps it is time to start thinking about how to create a company that will transcend generations—a company that will survive longer than your tenure. What does it take to create a company like GE or Ford or Apple—companies that last beyond their legendary founders and that impact generations of people?

Getting to scale is hard. Getting to legacy is almost impossible. The people who got your company off the ground, the people who scale it, and the people who help achieve legacy are rarely the same. Not only does it require a different skill set, the same people often will no longer be around.

We are seeing fewer and fewer companies span generations. Since 2000, more than half of the companies on the Fortune 500 list have disappeared as a result of mergers, acquisitions, or bankruptcies. Consider that in 1975 the life expectancy of one of those Fortune 500 companies was seventy-five years. Today, it’s just fifteen according to John Hagel III at Deloitte’s Center for the Edge.

Legacy is something I think about a lot these days, both in my personal career and when deciding which companies and founders to bet on. Yet this was not something I thought about early on in my career. And, in some ways, this was a mistake.

I think I got a taste of the power of legacy from IBM. The founder, Thomas J. Watson, was memorialized—and I read every one of his management letters. IBM had a very firm culture and values.

When I first started working, I considered myself a member of the family at IBM, and my focus was on doing a good job so that I could stay. I didn’t think about what I would do that would leave fingerprints on the company. As I moved up in my career, I felt that I was on a fast track through management roles, and I knew that I wouldn’t stay long in any one job. I was thus set on getting things fixed quickly and leaving everything in good shape.

My first senior IT leadership job was at Quantum. People enjoyed working with me, but I made a mistake—I made the job about me, not about the company. As a result, when I left, a lot of people left with me. I was flattered, but with the benefit of hindsight I know that was not a win. Success is not about the individual; it’s about the company. I took this lesson with me throughout the rest of my career. In my next posts at Bay Networks, eBay, and LiveOps, I was more interested in bettering the organization. As a result, when I left, people stayed at the company and worked toward making lasting contributions—contributions that would span long beyond any of our individual tenures. This is when I relearned that there’s much greater fulfillment and power in working to build a legacy than in working on one’s own career.

As a founder, you can’t worry about being legendary when you are starting out. However, you should always be aware of your own impact on your company. Meg Whitman said, “When you are a founder, your fingerprints never leave.” Indeed, HP is guided by Bill Hewlett and David Packard every day. This often happens in small and sometimes unexpected ways. Take Yahoo!’s legendary purple paint story. Jerry Yang sent Yahoo! co-founder David Filo out to buy gray paint and David mistakenly got purple instead. That set Yahoo!’s identity. To this day, they say, “We bleed purple.”

When you are thinking about leaving a legacy, you are not thinking about yourself. Here’s what you do have to think about:

• Have you codified the secret sauce that makes you special?

• Are your values inculcated firmly? Have you taught people how to modify them when needed?

• Do you have, at the ready, successors who can carry on the mission (and hopefully improve it)? The company should be able to continue on its merry way—and without any hiccups—without you.

• Embrace servant leadership. Put the cause ahead of your agenda and beliefs.

• Get out of the way, but be willing to insert yourself when legendary status is at risk. (Think Steve Jobs’s reinsertion into Apple.)

It is absolutely amazing and incredible to be part of a legacy company that’s reaching thousands to millions of people on a global scale. John Donahoe, the former CEO of eBay, used to talk about his humbling and inspiring opportunity to “steward” eBay for almost a decade of its journey. You always want to make a company better than it was when you joined. As you can see from the statistics about company life span, this is very hard work. However, the opportunity you have to create something that lasts makes it totally worth it!

All the best,

Maynard