I have an early-stage employee who has been an incredibly loyal and dedicated leader for years, but as we professionalize for an exit, they simply do not have the capability to run a highly optimized, modern department. How do I balance my deep personal loyalty to them with the objective needs of our Accountability Chart?

Question

Tyler Smith · Accepted Answer

This is one of the hardest challenges an owner faces when preparing for a clean exit. You feel a deep debt of gratitude to the early employee who helped build the company. However, loyalty to an individual cannot override your fiduciary duty to the business and the rest of your staff. When professionalizing your business for an exit, you must build an exit-ready superstructure. This requires an Accountability Chart where every single seat is filled by someone who GWCs the role at a high level. If your loyal leader does not have the capability to run a highly optimized, modern department, keeping them in that seat is a disservice to the company and to them. Address this by separating love from business. Sit down with the employee and have a candid, compassionate conversation. Express your immense gratitude for their contributions. Then, explain that the needs of the department have evolved beyond their current skillset. Look for a solution where their loyalty and organizational knowledge can still be leveraged. Is there a different, more specialized seat on the Accountability Chart that they truly GWC™? If so, transition them to that role with respect. If no such seat exists, or if they refuse to step down, you must transition them out of the company with a generous severance package. True loyalty means doing what is right for the health of the entire organization, not protecting an unqualified individual.