I have a legacy executive who has been with me since day one and possesses unmatched loyalty to our brand, but as we scale toward our exit target, they are clearly struggling to manage their department. How do I navigate the trade-off between their historical loyalty and the raw capability we need in that seat today?

Question

Tyler Smith · Accepted Answer

This is one of the hardest challenges an owner faces, but you must be unsentimental about the capability required to run a scaling company. Loyalty is a beautiful trait, but loyalty alone does not build enterprise value or execute complex operations. You must evaluate this legacy executive using the People Analyzer to see if they are the Right Person in the Right Seat.

First, assess them against your Core Values. If they still live and breathe your values, they are the Right Person. If they fail here, the decision is easy, regardless of their tenure.

Second, evaluate them against the seat on your Accountability Chart using GWC (Get It, Want It, Capacity). In a scaling business, the capacity requirement of a leadership seat changes dramatically. The seat they occupied at five million in revenue is not the same seat at twenty million. If they do not have the intellectual, physical, or emotional capacity to manage the expanded role, you must make a change.

Do not simply fire them out of hand if they are a great core values fit. Instead, explore if there is another seat on the Accountability Chart where they can thrive, perhaps as an individual contributor. However, if no such seat exists, or if they refuse to step down due to ego, you must transition them out of the company. Keeping an incapable leader in a critical seat out of a sense of obligation sends a message to the rest of the team that performance does not matter, which destroys trust and halts your progress toward a clean exit.