Smedvig Capital
Published in

Smedvig Capital

Up-skill, Re-purpose, Demote or Replace — The founders dilemma

There are a so many different challenges that face the founder CEO of a growth stage business it’s difficult to pick the biggest or most important, but perhaps one of the most emotional (and complex) is senior talent management.

As any business grows from a start up to scale-up the demands on its top team multiply, but they also evolve. Suddenly as CEO you find yourself needing a raft of “heads of” or “Chiefs of”.

For departments that haven’t really existed before or are currently run by the CEO with little leadership beneath, this is a relatively simple task — you just have to find time to specify, source, interview, evaluate, incentivise and close a great candidate — OK not exactly easy and much has been written on this check out here or here.

However often there is someone in the business doing the role, and often they have been with the business a while and have done a good job up until now. They are a valued contributor, potentially a leader in the business and probably a culture bearer who has put in the blood sweat and tears to get the business to where it is today. They may even be a friend. But their current skillset has been outpaced by the growth of the business — which turns a relatively simple task into a perfectly complicated one.

Are you dragging your team or are they dragging you?

I mostly see four options considered:

1: Up-skill — Actively try and train the employee through courses and mentoring, potentially supplement key areas of weakness with external consultants.

Pros:

  • Emotionally less bruising
  • Feels like doing the right thing for the employee
  • Puts off the risk and time sink of hiring

Questions:

  • Will you get the step change in experience base you desire?
  • Are you just delaying the problem rather than solving it?
  • Is it actually the right answer for the employee who may end up further and further out of their comfort zone and destined to fail?

2: Re-purpose — Find an area of the business which needs fixing / developing where the employee can make a significant positive contribution in a different area, and then hire new head of into a clean structure.

Pros:

  • Keep great talent in the business
  • Get the exact hire you want as a head of

Questions:

  • Are you moving the problem to another part of the business for later on? — which might be fine
  • Are you making the employee a “Jack of all trades” which may not be the right thing for their career?
  • Will there be some emotional baggage left within the business if the employee is not properly bought in?
  • Are you overpaying them for their new role?

3: “Demote”- Bring in a new more senior lead and change the existing employees role to be a senior within the team.

Pros:

  • Keep great talent in the business
  • Get the exact hire you want as a head of
  • Might actual be the best thing for the existing employees career perversely (accelerate / learn and then move upwards elsewhere)

Questions:

  • Is there some emotional baggage / complex politics left within the department if the employee is not properly bought in?
  • Have you unintentionally created too many layers of management between CEO and do’ers?
  • Are you overpaying them for their new more junior role?

4: Replace — Follow “simple” steps above to hire new head of and then “exit” the old employee

Pros:

  • Get the exact hire you want as a head of
  • Very clean structure

Cons:

  • Emotionally most challenging on the founder
  • Highest risk of failure if hire goes wrong

Questions:

  • What is the damage to company culture?
  • Are you assuming the new hire is too much of a “silver bullet” who will solve every problem in the company? They rarely are.

Conclusion

I purposefully haven’t sought to provide guidance on which is the “best” route. It genuinely depends on the unique circumstances of the business and the individuals involved. My one guiding principal is that the head has to guide the heart here however key the individual has been to the creation of the company as it stands today. You have to be as objective as possible about what on the balance of probabilities will create the best environment for the future growth of the business.

My only caveat is the head does of course need to factor into the equation the impact on culture any decision has. Whilst culture is intangible it remains a key part to the eventual success of any business — removing one culture bearer may be OK, 2+ in quick succession may not. These issues are magnified when due to the people concerned you can’t discuss potential avenues with anyone else in the business.

Make sure you are leveraging your chair or investors as much as possible more than likely they have both been through this multiple times. Lean on your mentor / coach and make sure you’ve convinced yourself before trying to convince others.

Good luck!

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store