In the latest instalment of the saga, Haji-Ioannou, who floated the company in 2000 and now owns 38 per cent, has issued the board with an ultimatum: they have one month to scrap plans to purchase more Airbus planes otherwise he will approach shareholders to force a change in direction. This hasn’t stopped the share price from falling 10 per cent in the past week.
The burning question that arises from this is whether entrepreneurs can ever actually cede control of their business, even after they are no longer the majority owner, as is the case with Haji-Ioannou.
“When you cash in your chips and sell part of your company you lose control, this is the total antithesis of how entrepreneurs work,” says Simon Dolan, serial entrepreneur and founder of SJD Accountancy. “I couldn’t stand that, which is why I couldn’t float any of my companies.”
Business psychologist Dr John Nicholson, chairman of Nicholson McBride, says that even after an entrepreneur sells their business they can still feel like the owners, which can be detrimental for the firm. “Once a company has been floated or sold then the owner should smile, wish the management team good luck and then clear off.”
But it’s not easy for some entrepreneurs to let go. Nicholson says they often have psychological attachments to their businesses, which is a bit like an extra umbilical cord they have to break when they leave.
However, mixing original owners with new management can be problematic, as easyJet shows. “Bishops never retire in their own diocese so they don’t start meddling with things,” says Nicholson.
It can be wise for the founder to show some grace if they do decide to stay on, says Nicholson: “You have to be incredibly big-hearted to make life easy for the new management team and keep schtum when you see other people managing the business that you found, especially if you think they are taking it in the wrong direction.”