The Team That Brought You to This Point

How to deal with a “changing of the guard”

As a leader, you add value to your business by making decisions.  Unfortunately, owners are not immune to putting off tough decisions and rationalizing their delays.  In fact, let’s admit that no one wants to make a decision that might upset people in the company.  With all the difficulties in getting and keeping good people, we want to keep morale up!   We want to give John Doe a chance to learn his new job so he can be successful. 

It’s a bad time of year to address this – it’s the busy season or the holiday season or the off-season, etc.  Even if you know that the decision is overdue and you will likely improve company profitability by acting on some of those tough decisions that have been “on pause,” you may be avoiding the issue just like the rest of us do.  We will find ways to rationalize our position of avoidance (even subconsciously!) even if it is something we know we should be doing!   

One of the hardest decisions is when and how to deal with an employee who “grew up” in the company and helped the original company get started.  In those early days, owners need people who will jump in and do whatever is needed to keep things moving.  These original team members who gave it their “all” are part of the reason the business exists.   Most owners I talk to are thankful and want to reward these people for helping them get to this point.  

The problem is that the people who got you here may not be the people the company needs to get to the next place.  

That’s not always the case, but it happens often enough.  For example, there is that talented manager, salesperson, or designer that’s been with the company since day one but hasn’t been in the right position for a few years now.  It’s the elephant in the room.  Everyone knows it, but no one, especially the owner, wants to do anything about the situation.  

Failing to deal with the situation is the worst possible outcome for this employee, the company (the rest of the team members), the owner and maybe the clients!  Not addressing the issue will tend to create a negative atmosphere that could poison your culture.  As difficult as it may be, addressing the situation with the employee is the only way to move forward.  

Some people are happier when they are vitally important to a small organization.  When you had five employees, everyone was doing everything, and all had the owner’s personal attention.  Believe me, I’ve been there.  The camaraderie, communication and teamwork are energizing.  Some people never get over the company growing up around them and resent being made to fit into a newly structured organization.  I’ve seen businesses keep “loyal retainers” in jobs that they are ill-suited for (whether through lack of experience, qualifications, or attitude) to avoid having to deal with the tough truth.  So, what should the owner do? 

First, the owner must be involved in this process for these people.  While there may be another trusted person in the mix, if this is someone who helped grow the company for the owner, it’s best that he/she acknowledges that and participates in or leads the process.  Second, identify what the issue(s) are.  What does the employee want to do? What are they qualified to do?  Is this a good fit for what the company needs?  Here are some real-life examples I’ve been involved with: 

  1. Small company, undereducated bookkeeper.  (less than 8 employees), Very capable bookkeeper but as the company scaled and grew, began to feel undereducated for the job.  She was a very humble person, not ambitious, but knew she was hard-working and intelligent.  Gradually she was encouraged to become a manager, adding A/R and A/P and other team members.  She was a naturally talented manager, and her team was excellent.   As the company grew, it became clear that it would be best if she could continue her education and earn a CPA or CMA certification.  With the support and encouragement of her staff and her boss (the CEO), she did so.   She did all of this while working full-time.   She ended up being the Controller of the company and was extremely valuable.  She continued to grow with the company and stayed even after the CEO who had hired her originally sold his interest and the next owner came in. 
  2. Small company, loyal start-up employee but no job that fit his desired career path. Again, small company, (less than 10 employees).  The company hired recent college graduates and trained them to do benefits analyst work. This was a team of many young, smart employees who enjoyed working with each other and for their clients.   After three years, one of the better performers in the position in the job realized that this wasn’t a job he wanted to build his career from.  He didn’t really want to leave the job he had, but the owner was open to learning what he wanted to do.  Since there was not a sales role open for him there, the owner helped him locate an entry-level sales position at a company he knew where the sales training was known to be stellar.  This was a very tough decision since the loss of this person impacted the clients he served.  BUT imagine how much positive energy this created among the existing team.  You won’t be surprised to learn that he ended up working with the company five years later with great success. 
  3. Another small company, where the owner’s assistant role morphed into a different type of position.  This person was very bright, well-organized and an important part of the owner’s original team that got the company “off the ground”.  She worked tirelessly and very capably, solving problems, handled appointments, correspondence, contacts, office space, moving, etc.   Once the company grew to over 100 employees, the CEO’s role changed (of course) and so did her job.   Unfortunately, she did not like what her job entailed in a much larger company.  Both she and the owner didn’t want to address the issue, so frustration ensued.  Finally, the COO brought in a consultant to work with all the original team members on the issue of transforming roles from the original “founders’ team” to their ideal career.  The consultant worked to identify each person’s interests and career possibilities were based on their interests, qualifications, and future career goals.  The employer paid for individual consulting to assist him/her in determining their path forward.  In this case, the employee realized she was best suited to a more “all hands-on deck” bootstrap size company.  With help from a job placement company, found her next position and received a bonus from her original employer as well.  

It’s never easy to address difficult decisions, especially if they involve those dedicated team members that helped you get your company from an idea to reality stage.  In many cases, they worked long and hard for less pay to be part of your successful company.  In that case, perhaps a bonus or tuition or job placement can help them determine their “best fit” path going forward.  The best leaders will make these and other decisions rather than avoiding them.  It’s best for all involved. 

Have you been thinking about rewarding your best talent?  Need to work on your succession and/or exit plan?  Thinking of selling your business?  What might it be worth? If any of these or other topics around buying, selling, or adding value to your business before selling are on the top of your mind, please feel free to reach out for a confidential conversation.

For these and any other exit/sales/buying issues you can reach me via email: [email protected] or on my cell phone at: 224-688-8838.  

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Alison Hoffman

has more than 25 years of experience in strategy, operations, mergers and acquisitions and delivering business-to-business client solutions. Her areas of expertise include managing operations for profitable growth, organizational design and strategy activation. She brings a wealth of experience through her work in evaluating, valuing and purchasing over 30 companies, leading company-wide cultural and business integration projects and consolidating best practices among business processes and corresponding computing systems. Read Full Bio