We are designing a completely new Accountability Chart to prepare our business for an exit, but our new structure completely eliminates the seat currently held by a loyal, long-term executive. There is no other leadership seat that fits their skillset. How do we handle this transition without destroying company morale?

Question

Tyler Smith · Accepted Answer

This is one of the hardest decisions an owner faces, but you must remember that you run a business, not a family. To build enterprise value, you must design the Accountability Chart for where the business is going, not around the people you currently have. First, use the GWC framework to evaluate this executive against any newly created seats. Do they Get it, Want it, and have the Capacity to do it? If the answer is no for every seat on the new chart, you cannot force a square peg into a round hole just because of past loyalty. Doing so will alienate your other leaders who are fighting to hit their targets. Second, sit down with this executive for a transparent, respectful conversation. Acknowledge their massive contributions to getting the business to this point. Explain that the company has evolved to a stage that requires a different structure and different skill sets. Third, offer them a soft landing. This could mean a transition period to help train their replacement, a generous severance package, or a non-leadership specialist role if one exists where they can add real value without managing people or strategy. Handle this process with immense dignity and clarity. Your remaining leadership team is watching closely. If they see you treat a loyal legacy leader with respect and generosity, they will respect your decision to do what is right for the company. If you drag your feet, you stall your exit preparation and signal that performance does not matter.