In the early stages of a business, founder-centric operations are often a strength rather than a weakness. An industry experienced, or passionate, individual is behind the desk, ensuring the decisions that are finalised are clear and fast. There is little bureaucracy and a clear sense of direction.

However, all of this is internal and singular. The only one who knows the model is one person: the founder.

Why founder-centric operations slow growth beyond 10–30 staff

For many Malaysian SMEs, the breaking point appears somewhere between 10 and 30 employees. At this point, the business has grown to a level that does not allow for decision-making to lay on the crux of one person. However, it is not large enough yet to justify setting up an extensive layered management system. All-in-all, this results in slowed, self-induced growth, with the founder remaining the key connecting point of the system.

When everyone still reports to the founder

Founder-centric operations mean that the business revolves heavily around the founder’s presence, vision, and decision-making. 

However, as the company grows, both in terms of employee headcount and success, the amount of decisions to be made also increases proportionally. This creates a compounding inefficiency. Employees start playing a waiting game. Opportunities are missed because responses are delayed. Projects stall while teams wait for sign-off. Even capable managers find themselves reduced to messengers rather than leaders. 

Unfortunately, the takeaway many founders get from this is to become even more involved instead of delegating decisions and providing autonomy to middle management and other employees.

The absence of structure beneath the surface

One of the most common, but less obvious, consequences of founder-centric operations is the lack of structure. As every decision goes through one person, there is no real need to create a formalised system, even for repeatable tasks. Over time, this leads to an organisation that lacks predictability and routine in decision-making.

Without clear processes, outcomes depend heavily on who asked the question, when they asked it, and how busy the founder was at the time. Planning becomes difficult and consistency suffers.

As the team grows, this lack of structure becomes increasingly costly. Training new hires takes longer. Without a proper system, mistakes are repeated and rarely captured.The organisation remains dependent on personal memory rather than institutional knowledge.

Middle management without real authority

As businesses grow and more employees are hired, there is a greater need for middle-management. While traditionally, middle-management offloads tasks from the founder and acts as a sorting zone, only allowing for crucial tasks enquiries to reach the founder, in founder-centric operations, these titles are just lip service. Authority remains firmly with the founder.

When managers lack real decision-making power, their role becomes ambiguous. They are responsible for outcomes but not empowered to make the decisions required to achieve them. Their recommendations may be heard, but rarely acted upon without founder approval. This results in them struggling to lead, as employees do not truly know who has authority. Frustration is bound to be incited in both parties, but more specifically, the managers.

Worse still, this dynamic tends to drive away strong talent. Capable professionals who thrive on autonomy and accountability quickly realise that their impact is limited. Over time, they leave, reinforcing the founder’s belief that “no one but me can be trusted to run things properly”.

Cultural norms and the “us versus them” divide

Cultural norms play a significant role in reinforcing founder-centric operations. In many Malaysian, and generally, Asian, workplaces, hierarchy is respected and deference to senior leadership is common. This workplace culture breeds employees who are afraid to make decisions without explicit approval, even if they are trusted and encouraged to do so. One may even say they are looking for permission, rather than approval. 

However, when an organisation lacks structure and over-relies on one individual, these cultural tendencies are amplified. Even more so when it is the founder. This prevents a healthy organisational culture from being fostered.

Sometimes, this mindset takes form because many leaders see themselves as the company culture. However, that could not be further from the truth. For a company culture to be formed, judgement and decision-making cannot be centralised. This only leads to teams becoming disengaged, uninspired, and disconnected from the company’s broader goals and even the founder as a person. In extreme cases, this creates an “us versus them” mindset. Employees execute instructions rather than take ownership. 

Trust issues and decision paralysis

Trust is another critical factor. Many founders hold onto decisions because they do not fully trust others to make the right calls. This may stem from past experiences, fear of mistakes, or the pressure of feeling personally responsible for outcomes.

Ironically, this lack of trust often leads to decision paralysis. With only the founder authorised to make decisions, any period of overwhelm or unavailability results in delayed decisions. Teams wait and opportunities pass.

Family-run structures and silent dysfunction

In many Malaysian SMEs, family members occupy key positions regardless of qualifications. While this can strengthen loyalty with each other, this move is bound to be internally questioned by the wider team. Non-family employees may feel that their opinions carry less weight. This leads to “polite nodding”, where they show silence on critical issues and are reluctant to offer constructive criticism. 

Nepotism also affects talent retention. Skilled professionals who value autonomy and authority are unlikely to stay long in environments where advancement is constrained by family ties.

The real cost: stalled growth, burnout, and fragile businesses

The consequences of founder-centric operations are cumulative. Growth stalls as it requires the distribution of power, knowledge, and ownership. The business cannot scale beyond the founder’s personal capacity.

Burnout emerges on both sides. Founders exhaust themselves from all the tasks unloaded on them, many of which are not required of founders. Employees burn out from missed opportunities and the need to constantly adjust their work around the founder’s availability.

Most critically, the business becomes fragile. There is a lack of institutional knowledge as the process only exists in the founder’s head and not in documented, repeatable processes. This unfortunately also prevents the teams from operating independently. The founder also becomes the single point of failure where, should they step away or take leave, the entire system will collapse. 

What delegation looks like in practice for SMEs

When we think about delegation, the model used for MNCs is what people usually think of. However, that model is different from what is relevant for Malaysian SMEs. 

In practice, effective delegation starts with documenting simple, repeatable tasks through basic Standard Operating Procedures (SOPs). Documented referral, whether in video or written, allows others to learn and execute the task without supervision or approval. This simple action also simplifies training and onboarding. 

Rather than constant supervision, founders shift towards predictable control. Regular, scheduled check-ins ensure that founders are kept updated without having to micromanage or be personally involved in the process.

Delegation also requires an emotional shift. Founders must resist the instinct to take tasks back simply because they believe they can do them better. Self-regulation becomes a leadership skill, one that fosters trust and independence in the company.

Routine tasks can be offloaded to junior staff, shift workers, or temporary hires. Specialised areas such as IT, systems, and finance are time-consuming tasks for the common man, often better handled by professionals. These acts of delegations and offloading frees the founder to focus on strategy, growth, and long-term direction.

Letting the business grow beyond you

The success of a business, especially a Malaysian SME, does not depend on its demand or how busy the founder is. It depends on how well the business can function without them. If every decision requires their input, growth will eventually plateau. 

Until founders stop being the system themselves, their businesses will struggle to scale, no matter how strong the market opportunity may be. However, the sheer ambition and skills of Malaysians can prevent this, should they be provided the independence and space to do so.