You Outgrew Your Employee. Now What?

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Maybe you have an employee who has been with you for a long time. Maybe they have been a great performer over the years. Maybe you have built significant rapport and loyalty with this person.

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Unfortunately employees don’t always grow with entrepreneurial companies.  This is one of the hardest lessons to learn as an entrepreneur or new executive.

As companies grow, they tend to outgrow their employees. That’s not surprising: it’s hard for fast-growing organizations to provide enough time and development for employees to keep up with ever evolving needs of the organization.

Take, for example, a situation I had early on at 3Pillar. One of my earliest employees became my go-to person.  He was phenomenal when we were a five-person company. I completely trusted him and knew I could rely on him.  He assisted me and helped grow the business. He was exactly the right person for managing employees and being there to do the things that weren’t my strengths.

As we began to grow, a different reality set in.  Expanding into a company with 20, then 30, and then 40 employees requires a different skill set.  The company needed a different type of leader.  And when we became a global business grew even wider.  The employee who’s great with your 20-, 30-, or 40-employee company will not necessarily be the person to run and operate an international business with 600 employees.

Often, I think we can identify this in our gut, but because of the loyalty we’ve built up, we have a hard time determining and actually deciding to take action.  We let the issue fester.

I’ve learned to deal with these situations quickly.  I take the following three steps.

Address it head-on.

As soon as you notice the issue, or have a gut feeling that you might have one, address it with the employee.  Talk with them about how roles change rapidly in a growing company and ask them how they are feeling about how they are keeping up.

You may find the conversation alone heads off the issue.  Perhaps the person simply hasn’t realized that what is required of them has changed.  This will call it out to them.

Perhaps they are truly struggling and don’t know how to deal with the issue themselves.  This will open up the dialogue necessary to help them get past it.

Perhaps they believe they can make the jump.  This will give you the opportunity to discuss expectations and put them squarely on the table.

In most cases, employees who are struggling with this issue are more uncomfortable than you are.  Putting the possibility on the table (in the right way) communicates your respect for them as a person and gives them the opportunity to dispel the myth or be part of the solution.

Discuss alternatives.

After your initial conversation, your hunch should be either quickly dispelled or rapidly confirmed.  Once it is confirmed, it’s time to discuss alternatives.  If the individual recognizes the issue, discuss alternatives.

Perhaps the role has grown large enough that it should be split into two.  Perhaps there is a new role that is more aligned with their skill-set.

Because you have addressed the issue proactively, you do not have a performance issue.  Instead, you have an organizational optimization issue.  Work together to overcome it.

Part ways, respectfully.

Unfortunately, in many cases an employee is unable to recognize that the company has grown beyond their capabilities in a certain role.  Still others recognize it but are unwilling to embrace change.  They want to hold on to the role that they feel is rightfully theirs.

In both of these situations, it is important that you part ways, respectfully.

I have found over and over again that dragging this process out is painful and detrimental to both the individual and the employee.  It is most often a relief to both your organization and the employee if you take swift action.  When you do, remember, this was your go-to employee.  Take care of them.  Offer them a nice package and celebrate their success as they move on to their next challenge.

4 Comments Add yours

  1. John Estrada says:

    David, very well put. This is truly one of the most difficult parts of growing a successful company.

    1. David DeWolf says:

      Thanks John. It’s not only difficult, it’s gut wrenching, as you well know!

      I got an email about this post that asked: “what happens when a company outgrows the entrepreneur? How does an entrepreneur create an objective view of their business that includes their role in it? Can an entrepreneur be objective given the mentality require to forge company in the wild?”

      It’s a compelling question, one that I will likely try to tackle in an upcoming post. You probably have some interesting insights having seen both sides of this equation before. Any thoughts?

      1. John Estrada says:

        This is even harder. If the entrepreneur could objectively look at things they should in theory be able to make the same evaluation on themselves. But looking objectively at yourself and your company (your baby!) is nearly impossible to do.

        In a company that has a board of directors, this is really their responsibility and one or more members of the board should be able to sit down with the entrepreneur in the same way you’ve discussed above.

        If the company doesn’t have a formal board, the entrepreneur could try to setup a board of advisers. Ideally this will be with people whose opinion the entrepreneur can trust enough to have that same conversation.

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