We have several early employees on our leadership team who live our core values perfectly, but as we scale toward our exit target, they are struggling with the strategic demands of their seats. How do we resolve the constant tension between our deep personal loyalty to these people and the raw operational capability the business needs to hit its goals?

Question

Tyler Smith · Accepted Answer

This is one of the hardest issues an owner faces. You have loyal leaders who helped build the foundation of the business, but they lack the processing capacity to run a much larger, more complex organization. If you keep them in seats they do not GWC™ (get it, want it, have the capacity to do it), you risk stalling your growth and lowering your exit valuation. Cracks at the leadership level appear as canyons to the rest of the organization.

To resolve this, you must separate loyalty to the person from the requirements of the seat. Start by updating your Accountability Chart based on what the business needs to reach its three year target, completely ignoring the people you currently have. Once the seats are defined, evaluate your loyal leaders objectively. Do they truly GWC™ the seat at this new scale?

If they do not, you must have an honest conversation. Loyalty does not mean keeping someone in a seat where they are failing. That is actually disloyal to their well-being and to the rest of the company. Look for other seats in the organization where they can shine and add immense value without holding the leadership team back.

If there is no suitable seat, you must transition them out of the company with dignity and generous severance. Your job as the owner is to protect the health of the organization. A buyer will look at the capability of your leadership team, not just their tenure.