JOBS WILL ALWAYS OUTGROW PEOPLE – This may be the only guarantee in an entrepreneurial business
It is a guarantee that over time jobs will outgrow the people who do them, but you can also be certain this will always be one of the toughest issues a CEO has to deal with. Unless the business model dictates no growth (which of course has its own risks), as a company gets larger and more complex, the jobs evolve accordingly. Then over time, the individual who was totally capable and perhaps an “A” or “B” player is now a “C” – and struggles to keep up with requirements. This issue affects not only employees, but managers and yes, even executives. And the last group makes this probably the toughest issue any CEO has to deal with, in order to lead and grow a healthy organization.
LOYALTY: A GREAT TRAIT – BUT ALSO A HUGE DANGER
Who doesn’t want loyal managers and employees? It is part of building a stable, experienced team that can help take a company to the next level. The problem arises when this sense of loyalty clouds pure objectivity about an individual. As John Hamm said in his outstanding Harvard Business Review article, “Why Entrepreneurs Don’t Scale” the single largest reason why they don’t is a false and extended sense of loyalty towards people who helped the owner start and grow the business. John points out: “But when leaders fail to see and respond to a team member’s weaknesses, they place the company at risk.”
I was once on the Board of a service company, where the CEO was the founder and his Father was in charge of sales. The Father was struggling with attracting, managing and developing the sales organization and accountability was a real problem. After much Board discussion with the CEO, he fired his Father about six weeks before Thanksgiving. Can you imagine what that Thanksgiving dinner was like for the family? But the CEO had realized that putting the welfare of ANY individual above that of the entire company was irresponsible.
As the story above identifies, when jobs outgrow executives, the challenge often becomes even greater for three reasons:
- The executive was there at the beginning of the company and helped the Founder/CEO start and grow it, or
- The executive is a business partner who owns part of the business, or
- The executive is a relative.
As Jim Collins often asks when CEOs express reservations about an executive on their team: “Knowing what you know today, would you hire that executive tomorrow for the same job?” If the CEO can’t immediately and without hesitation say “yes”, then he probably already knows the answer. And admitting the answer means needing a plan to deal with the situation. It doesn’t mean putting the company at risk, firing the individual on the spot or being disrespectful, because the executive usually didn’t do anything wrong. They are just a victim of being mismatched with the current requirements of the job. As Collins would say, “They are in the wrong seat on the bus.”
A key job of any CEO is making sure that when a job has outgrown an executive, three things happen:
- That executive is told that they will not be successful in that job,
- That a career is too precious to waste doing something where you cannot be successful, and
- That you are so appreciative of their contributions that you want to help them find the right seat on the bus, even if it means another company’s bus.
CEOs need to always remember that jobs will outgrow people, including executives, and they must stay vigilant in watching for the signs (failing to meet goals, not handling multiple balls in the air, late and stressed out on assignments, a change in behavior toward employees and other executives, having to make excuses, etc.) and continuously challenging himself with the Collins question.
John Hamm’s HBR article “Why Entrepreneurs Don’t Scale”
IT ISN’T WHETHER A JOB WILL OUTGROW AN EXECUTIVE; IT IS WHEN IT WILL OCCUR.