A founder who had previously been a high-functioning leader—ambitious, engaged, and well-respected by partners and staff—began spiraling into alcoholism almost overnight after a period of intense organizational pressure. Funding challenges, team turnover, and relentless travel had created mounting stress with no relief. The shift was visible and destabilizing. The founder began missing meetings, showing up to work in visibly compromised states, and communicating erratically with stakeholders.
There was no formal crisis yet, but the risk was growing rapidly. Key deliverables were slipping. Team morale was plummeting. Several institutional stakeholders were preparing to exit. The situation was deeply personal, but the damage was becoming structural. The founder acknowledged the drinking and admitted to feeling overwhelmed, but expressed ambivalence about continuing in the same role. No one knew whether to push for immediate removal, offer support and hope for recovery, or prepare for the business to collapse entirely.
Pholus was brought in quietly by stakeholders with a mandate to assess the situation and advise on a path forward that wouldn't trigger public fallout, destabilize the venture further, or destroy what had been built. The founder was struggling, but the organization still had value worth protecting. We needed to manage the transition without creating scandal, litigation, or unnecessary harm to either the founder or the enterprise.
This case study is relevant if you're facing:
Founders or executives whose personal struggles are creating organizational risk. A key leader in your organization is dealing with addiction, mental health crisis, or personal circumstances that are affecting their judgment, availability, and ability to lead effectively. Their struggles are visible to staff and stakeholders, and you're uncertain whether to offer support and hope for recovery, initiate formal intervention, or begin planning for their departure before the situation deteriorates further.
Organizations where removing a founder would create immediate operational crisis but keeping them is unsustainable. The founder built the organization, maintains critical relationships, and possesses institutional knowledge that would be difficult to replace. But their current state makes continued leadership untenable, and you need to balance the short-term disruption of transition against the long-term damage of allowing the situation to continue without intervention or structure.
Boards and investors watching a leadership situation deteriorate without clear authority or process to intervene. You have concerns about a founder's fitness to lead, but you lack formal governance mechanisms to force change, fear that confrontation will trigger resignation or retaliation, or worry that public acknowledgment of the problem will damage stakeholder confidence, client relationships, or funding commitments. You need a path that protects both the organization and the individual's dignity.
Situations where personal loyalty conflicts with organizational responsibility. The founder has contributed enormously to building the organization, and many stakeholders feel personal loyalty or gratitude that makes decisive action feel like betrayal. But allowing sentiment to delay necessary decisions is putting operations, staff livelihoods, and mission delivery at risk. You need external perspective that can separate personal feelings from organizational necessity.
Teams experiencing declining morale as they watch leadership struggle without visible support or action from governance. Staff members see what's happening and are losing confidence in the organization's stability, questioning whether leadership cares about protecting them, and considering departure if they perceive the situation as unmanaged or deteriorating. The silence around the founder's struggles is as damaging as the struggles themselves, and you need to demonstrate that governance is engaged without violating privacy or creating unnecessary drama.
We diagnosed the situation without judgment, giving the founder space to acknowledge reality and explore options beyond immediate removal. When we engaged directly with the founder, we didn't approach them as a liability to be removed but as a person under pressure who needed honest conversation. They acknowledged the drinking, admitted to feeling overwhelmed, and expressed uncertainty about whether they could or should continue. Rather than demand immediate exit, we reframed the conversation: what would this organization look like if you weren't in charge of everything but still remained part of what you built? This opened the possibility of role transition rather than total severance, making the path forward feel less like failure and more like strategic evolution.
We co-designed a role transition that reduced operational responsibility while preserving some connection to the organization. Working with the founder and key stakeholders, we created a new structure where the founder stepped back from CEO responsibilities while an interim executive framework was introduced with increased board oversight. The founder retained a defined role that was less operational and less stressful, leveraging their historical knowledge without requiring daily decision-making or crisis management. This allowed the organization to continue functioning while reducing exposure to erratic behavior, and gave the founder breathing room to stabilize personally without the weight of full executive accountability.
We coordinated stakeholder communication that emphasized continuity and governance strengthening rather than crisis or personality failure. Rather than announce a leadership crisis or air internal struggles publicly, we worked with stakeholders to frame the transition as part of strategic operational evolution. Communications emphasized governance improvements, continuity of mission and programs, and strengthened oversight structures. We avoided language that suggested instability or personal conflict, protecting both the organization's reputation and the founder's dignity while being transparent enough to maintain stakeholder confidence during a sensitive period.
We advised the board on legal and financial protections to insulate investment from further deterioration, then managed the eventual formal exit. Over time, it became clear the founder was unable to stabilize their personal life despite the reduced role and structured support. Performance continued to degrade, and the interim measures that had bought time could not be sustained indefinitely. We helped stakeholders exercise their governance rights to formally remove the founder from the organization. Thanks to groundwork laid months earlier including documentation, role transition, stakeholder alignment, and legal preparation the removal was orderly. There was no public scandal, no lawsuit, no abrupt collapse. Just a calm board decision followed by structured communication. The organization continued operating for several more years with new leadership and preserved stakeholder confidence.
The full case study details the founder engagement methodology that created space for honest assessment without triggering defensive withdrawal, the role transition design that reduced responsibility while preserving dignity, the stakeholder communication framework that maintained confidence during sensitive leadership changes, and the governance protection strategy that enabled eventual removal without crisis.
If your founder or key executive is struggling with personal crises that create organizational risk, your board lacks clear authority or process to intervene in deteriorating leadership situations, or personal loyalty is conflicting with organizational responsibility, Pholus provides crisis assessment, transition design, and governance guidance that protects what's viable even when founders can't recover.
This expertise also applies when you need to balance immediate operational continuity with necessary leadership change, when staff morale is declining due to visible struggles without visible action, or when you must navigate sensitive exits that preserve dignity while protecting organizational interests and stakeholder investment.