The people who got you here may need help getting you there.
Growth is exciting. More customers. More revenue. More employees. More opportunities.
It’s what almost every business owner says they want. But there’s a question we don’t ask often enough:
Is your leadership team growing as fast as your company?
I recently talked with the CEO of a growing company who was frustrated with his management team.
The company had grown significantly over the last several years. But now decisions were taking too long. Managers weren’t holding their people accountable. Too many issues were making their way back to the CEO.
His conclusion? “I don’t think I have the right people.”
Maybe.
But I asked him to tell me more about his team.
One manager had been with the company from almost the beginning. When she started, she supervised four people. Now she was responsible for more than 30.
Another had been an excellent salesperson, so naturally, he had been promoted to sales manager.
A third knew the operation better than almost anyone—but had never been taught how to lead people.
That’s when I asked a different question:
“What have you done to help them become the leaders your larger company now needs?”
Silence.
The Job Changed. Did the Person?
This happens all the time in growing businesses. When your company has $10 million in revenue, you need one kind of organizational structure. At $30 million, you need another. At $75 million, the complexity changes again.
Yet we often expect the same people to simply figure it out. Someone who was terrific managing five employees may struggle with 30. Your best salesperson doesn’t automatically know how to coach a sales team. And the employee who could keep everything in her head when the company was small may suddenly need systems, processes and people beneath her.
That doesn’t mean these are the wrong people. It may mean you’re asking them to do jobs they’ve never been taught to do.
Loyalty and Competency Aren’t the Same Thing
This is where the situation can become difficult for CEOs, especially founders.
The people who helped build the business matter to you. They worked nights and weekends. They wore five different hats. They stayed when things were uncertain. You want to reward that loyalty. You should. But there’s an important distinction:
Loyalty deserves recognition. Leadership requires competency.
Promoting someone isn’t always the best way to reward them.
I’ve seen companies put terrific employees into management positions because it seemed like the natural next step—only to discover that the person didn’t enjoy managing people and wasn’t particularly good at it.
That’s not good for the employee, the team, or the business.
Before You Replace Someone, Develop Them
When a leader isn’t performing at the level the company now requires, don’t immediately assume you need someone new.
First ask:
- Have I clearly defined what success looks like in this role?
- Have I given this person honest feedback?
- Have we identified the skills they’re missing?
- Have I provided coaching, training, mentoring, or outside education?
And perhaps most importantly:
Does this person actually want to grow into the leader we now need?
You can’t want it more than they do. But if they have the desire and capacity, investing in someone who already understands your customers, culture, and business can be incredibly powerful.
Sometimes You Do Need to Make a Change
Development isn’t always the answer. Sometimes the business has simply outgrown someone’s capabilities. That’s difficult to acknowledge, particularly when the person has been loyal for many years. But avoiding the decision doesn’t protect them. It usually creates frustration for everyone around them—and eventually for them, too.
The answer may be restructuring the role, finding a position better suited to their strengths, or bringing in a more experienced leader above them. The key is addressing the issue before it becomes a crisis.
Three Things to Remember
- Company growth and leadership growth have to happen together. Don’t wait until someone is overwhelmed before you start developing them.
- Don’t confuse tenure with readiness. Reward loyalty, but don’t use a promotion as the reward unless the person is capable of succeeding in the new role.
- Development has to be intentional. Leadership skills don’t magically appear with a new title.
Growing revenue is exciting. But revenue isn’t the only thing that has to scale.
- Your systems have to scale.
- Your processes have to scale.
- And most importantly, your people have to scale.
So as you look at your growth plans for the next three to five years, don’t just ask:
“How big could this company become?”
Ask the harder question:
“Who do my leaders need to become for us to get there?”
Because sometimes your biggest constraint to growth isn’t the market, your competition, or even sales.
It’s leadership capacity.
Onward and Upward,
Karen Caplan
Executive Coaching and Consulting for business CEOs, Owners and Presidents
