Replacing Founders with Partners to Preserve a Company's Progressive Culture

Joost Minnaar
Written by Joost Minnaar June 10, 2023

One of the main challenges for today’s progressive companies is to stay progressive once the pioneering founders (or other progressive-thinking top leaders) leave and new leadership steps in. Too often, we have seen that when professional managers replace pioneering founders of progressive companies, it is a matter of time before the firms turn traditional. Only consider cases like Oticon, BSO Origin, FAVI, and, more recently, Southwest Airlines. Often, the company's progressive nature gets slowly diluted before it disappears altogether. In other words, when progressive top leaders leave, their progressive ideas tend to leave with them. How can we tackle this challenge? Let's turn to the Chinese firm Alibaba for inspiration.

In his book, the Tao of Alibaba, author Brian A. Wong describes how iconic Chinese entrepreneur and Alibaba founder Jack Ma designed and implemented a system to preserve the company's culture for the long run. He called it the “Alibaba Partnership.”

The Alibaba Partnership structure is designed so that a group of key people (partners) takes over the role of protecting the company's culture if a founder or other key employees leave. These four points explain how it works.

1. Elected partners

Each year, new partners are elected into the partnership. Currently, it has around 40 members from all different places in the organization. A prospective partner can only join the partnership when they get the approval of at least 75% of the existing partners.

2. Exemplary leaders

Partners deserve a place in the partnership based on their experience, leadership, and commitment to developing the company's culture. They must be regarded as exemplary leaders who are particularly strong in their understanding of the company culture.

Wong lists clear guidelines that partners must meet:

  • A high standard of personal character and integrity.

  • Continued service with the company, affiliates, and/or certain companies with which the company had significant relationships for at least five years.

  • A track record of contribution to the business of the company.

  • Being a "culture carrier" who shows a consistent commitment to, and traits and actions consistent with, the company's mission, vision, and values.

In other words, when progressive top leaders leave, their progressive ideas tend to leave with them. How can we tackle this challenge? Let's turn to the Chinese firm Alibaba for inspiration.
Click to tweet

3. Role of the partnership

The role of the partnership is to put in place a governance system that can ensure that the company protects its own culture by remaining focused on long-term objectives (i.e., purpose and values), not short-term metrics (i.e., shareholder value).

4. Authority of the partners

The partnership is not just a symbolic group with no authority—in fact, the partnership has far-reaching authority. For example, among other things, the partners have the exclusive right to nominate a majority of the company's board of directors, which can greatly influence decision-making at the highest level of the company.

Inspiration for myself and others

This system assumes that a group of partners who cherish and nurture the same progressive culture and ideals is likely the best option to stick to the company's progressive principles and ensures good decision-making for all people involved—in a long-term view.

It all makes a ton of sense to me. I really think this system of replacing founders with partners could be an inspiration for all progressive companies that struggle with governance issues or with leaders that will leave soon.

And that’s definitely something to think about.

Written by Joost Minnaar
Joost Minnaar
Co-founder Corporate Rebels. My daily focus is on research, writing, and anything else related to making work more fun.
Read more
Aug 06, 2023
TiER1: A Customer-Centric and Empowered Organization with Dynamically Distributed Authority (DDA)
Joost Minnaar Written by Joost Minnaar
In July, we had the opportunity to interview Greg Harmeyer for an Academy live event. Greg, the co-founder and CEO of TiER1, a US-based…
Read more
Jul 23, 2023
iYell: A Startup's Thorough Pursuit of Organizational Development
Yuji Yamada Written by Yuji Yamada
Today, I would like to introduce you to another progressive firm from Japan: iYell Inc., an IT company from Tokyo with about 350 employees…
Read more
Jun 25, 2023
Gaiax: A Japanese Start-up Studio That Puts the Free Will of the Individual First
Yuji Yamada Written by Yuji Yamada
Gaiax is a public company headquartered in Tokyo with around 150 employees. Its business is focused on internet services such as social…
Read more
Jan 21, 2023
Decentralization in the Workplace: How Distributed Management is Changing the Game
Yuji Yamada Written by Yuji Yamada
In October 2018, the Japanese IT company Yumemi launched a so-called “Agile Organization Declaration.” Over the years, this inspired them…
Read more
Jan 07, 2023
A New Year: New Opportunities And Fresh Starts
Joost Minnaar Written by Joost Minnaar
The first week of January is traditionally a time to make New Year resolutions - the time of the year when we look forward to the new year…
Read more
Dec 17, 2022
Let’s Fire All The Micromanagers
Joost Minnaar Written by Joost Minnaar
Micromanagers are by far the least popular managers. Nobody wants to report to one. Nobody wants to be one. The funny thing about…
Read more
Read all articles