Founding vs Inheriting by Balaji S: A review

Futurist Balaji S recently published an article where he highlights the difference between founding and inheriting an institution.

The primary argument in this insightful piece speaks to the difference in mindset that founders vs inheritors possess. Far from being just an opinion, there is empirical evidence that supports the thesis that first generation entrepreneurs and organization tend to have more energy and innovation baked into their DNA to adapt to a large external change in operating environment. The ability to adapt makes it easier for them to disrupt existing institutions and practices from slumber but can also help them survive.

As we look to the future this gets even more interesting, because the early advantages that tech enabled for founders — starting a new tech business at a relatively low cost that could lead to a disproportionate disruption is now permeating to other parts of society, namely governance, societal structure, communities and more.

This is where I find myself looking for an approach that is more nuanced in it’s recommedation of a founder’s mindset towards problem solving and institution building. Some insights can be found by looking at the exceptions to this trend. Inheritors that have managed to take a legacy businesses handed over and revolutionised it, for instance Mukesh Ambani with Reliance or Azim Premji with Wipro.

On the other end of the spectrum, to look at disruptors (read: founders) in the political arena like the present-day Indian PM Narendra Modi, who ‘inherited’ a flawed, yet largely functional government and allied institutions machinery. In the belief that the entire machinery required a reboot, the administration may have failed to overlook the scale and complexity of problems that a large, unorganised and diverse country such as India presents. This is evident in their inability to prepare, contain and/or recover from the Covid-19 spread in India.

I think in the longer time scale — centuries vs decades — there is some value to structures and institutions in maintaining the status quo. This has applications at an organisational scale as well as at the micro unit level with a family. Wisdom passed on from generation to generation, often through word of mouth (especially in India & South Asia) are scientifically less rigorous but lean towards survival and continuity instead of disruption. Interestingly, this is the same thinking aligns with one of Warren Buffet’s quotes on how avoiding stupidity is more valuable than seeking brilliance.

This would apply to problems of environment as well. Things that do not seem troublesome in the decades can exponentially increase over time to become a catastrophe in the nth decade. Instead of having a revolutionary technological breakthrough that solves for this in that nth decade, society may benefit from shifting the focus on the lessons of history and avoid the rise of afore mentioned catastrophe altogether.

Disruption is an unstoppable force. It arises from the basic instinct in humans to plan for their future and improve current systems to solve for future threats. The ‘founder’ mentality leverages this to great effect to move the needle. What we see with tech and business now will happen with governance and society in large in the coming decades. And as we grapple with this inevitable shift, we would do well to also learn from the wisdom of history and ‘inheritance’ so to speak to avoid the simple mistakes.

The solution to foster this balance may lie in looking at our incentive structures, ownership laws and a whole bunch of macro policies that encourage ‘founding’ mindset in new areas while preserve the ‘inheritance’ mindset when it comes to avoid repeating simple mistakes of the past. Further areas of explorations that come to mind are: what happens when these 2 forces come at loggerheads? Which one is worthy of siding with?

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store