I have a leadership team member who gets and wants their seat, but they simply do not have the capacity to manage the larger team we will have in two years. Do we replace them now to prepare for our exit, or do we wait until they actually fail?

Question

Tyler Smith · Accepted Answer

Waiting for a leader to fail is a costly mistake. If you know today that a leadership team member lacks the capacity to scale to the level your business requires in two years, you must address it now. Allowing them to remain in the seat will slow your growth, create operational bottlenecks, and ultimately damage your EBITDA and multiple when you prepare for an exit.

Start by evaluating the seat requirements on your Accountability Chart for your future-state organization. If the complexity, headcount, or technical requirements of that seat in two years will exceed their current capability, they do not GWC™ the future seat.

Have a proactive, honest conversation with the leader. Explain the future trajectory of the company and the evolving requirements of the role. You have two viable paths: you can invest in targeted training and coaching now to see if they can build the necessary capacity, or you can begin planning a graceful transition.

Transitioning them early allows you to bring in an enterprise-grade leader who can build the necessary systems, perhaps leveraging AI-powered workflows, to prepare the business for exit. It also allows you to retain the loyal leader in a modified or specialized seat where they can continue to add value without being overwhelmed. Proactive leadership decisions protect both your culture and your business valuation.