An executive who was instrumental in building our business from scratch is clearly overwhelmed now that we have scaled past fifteen million dollars. How do I balance personal loyalty to a founding employee against the hard capability requirements of their leadership seat?

Question

Tyler Smith · Accepted Answer

Loyalty to an individual cannot come at the expense of loyalty to the organization and the rest of your employees. When a business scales from three million to fifteen million dollars, the complexity of every leadership seat multiplies. The scrappy hustle that built the foundation is rarely the structured management capability needed to run the next stage.

Evaluate the executive using the People Analyzer and the GWC framework: do they Get it, do they Want it, and do they have the Capacity to do it? Getting it means a natural, instinctive grasp of how the seat functions at your current scale. Wanting it means genuine daily hunger for the responsibility, not just clinging to the title. Capacity means having the emotional, intellectual, and physical horsepower to execute the role without burning out.

Most often, early founding employees still have the Core Values, but they lack the Capacity to manage managers, install sophisticated systems, or run large budgets. If they are below the bar on GWC, keeping them in the seat is actually an act of cruelty. They know they are struggling, their direct reports know it, and the rest of the leadership team is compensating for their shortcomings.

Have a transparent conversation. Acknowledge their massive contributions to getting the company here. Explain the operational requirements of the seat moving forward and show them where the gap lies. Transition them to an individual contributor role, a specialized project seat, or a clean exit with a generous severance. Protect the business first.