Speaking with a business owner recently, the topic was the pending termination of one of their first employees. It was a hard discussion, but a necessary one. The company had grown, and the employee wasn’t doing well with the new structures that were necessary to support this larger scale business. It was difficult for the owner due to the loyalty they had perceived from that employee, but it was also clear that the employee wasn’t quite as happy as they had been when the company was smaller. Something needed to change.
This is a typical situation for growing companies, and similar to the need to refocus the client base as well. As a company grows, they typically take on clients that don’t quite fit their target market because they need to pay the bills. As a company gets more successful, they realize they need to cull out the non-target-market clients over time in order to continue to grow profitably. Something similar frequently happens with employees.
When you initially start your company, you don’t have the resources that a large employer would have. Whether you are self-funding the business, borrowing funds, or are fortunate enough to have an investor, it’s rare that you feel you can afford the most qualified talent. If you are lucky, you are able to hire people that are good cultural fits for the company you wish to build, but it’s rare that those individuals also have all the experience you would ultimately prefer in the early days.
As your company grows and has more financial resources, it’s common for the jobs to outgrow the original staff. You want to ‘grow your team from within’, but inevitably some of the jobs you need done can’t be adequately filled by the team members you have. And in some cases, the roles even those team members are filling become more complex, requiring you to either stunt the growth of your company by leaving things as is, or make the difficult choice of replacing the team member in that role.
So, what is the best solution?
If possible, it’s always best to try to “re-purpose” the employee in a different role. If they are a good cultural fit in your organization, and they can be given a different purpose (translation: a different job), and it’s still beneficial to the organization as well, then that is what should happen. The challenge comes when there is no other role that you can move the person into, and yet they aren’t performing well in their current (expanded) role. This is where owners tend to hold on to the employee and let the problems linger for too long due to the loyalty factor. Loyalty is to be admired, but when it starts to damage the organization, thereby damaging the situation for other stakeholders (other employees, owners, etc), then it’s time to take action anyway. The individual needs to be moved within the organization, or helped out of the organization as the case may be. Allowing the company to limp along as is does damage long term. At best, growth is slowed, but at worst, the organization can start to crumble under its own weight. Actions must be taken.
I realize this is a cold post to write. However, if you as a business owner find yourself in this predicament, I can almost assure you that the employee in question is not happy in the role anymore anyway. You will be doing a good deed to address the issue and help both you and they move into a more satisfactory situation. The hardest part is usually the initial broaching of the subject.
If you would benefit from coaching in this area, please reach out to us on our Contact page.
Until next time, I wish you the best in your business.
Mark Goldman
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