We want to scale our business for an exit in three years, but I am realizing that some of our early-stage leaders do not have the capacity to manage a business twice our current size. How do we address this on the Accountability Chart without firing them?

Question

Tyler Smith · Accepted Answer

Preparing for an exit requires you to design an Accountability Chart for where the business needs to be in three years, not where it is today. When you look at that future chart, it is common to realize that a loyal manager who successfully ran a department of five people does not have the capacity to run a department of fifty.

To handle this transition without losing valuable talent, you must first separate the person from the seat. Be completely objective about whether your current leader passes the GWC™ test (Gets, Wants, and has the Capacity for) the future, scaled-up seat. If they do not, keeping them in that seat will bottleneck your growth and hurt your valuation.

Your next step is to find a right seat where they do pass the GWC™ test. Often, early-stage leaders are excellent individual contributors or specialized managers, but they lack the administrative and strategic skills required of a high-level executive. You can hire a seasoned leader for the top-level seat and move your loyal employee to a specialized seat reporting to them.

Frame this transition as a way to relieve their stress and allow them to focus on what they actually enjoy doing. By proactively aligning your people with seats they can realistically master, you protect your company culture while building a professional leadership tier that private equity buyers will trust to run the business after you exit.