Last week I was talking to a successful entrepreneur who was lamenting that she had this previously strong employee that had been with her for over two years. Unfortunately, this quality startup employee, who got along great with others and was a corporate culture fit, was no longer effective as the organization tripled in size. These are the toughest situations.
Here’s my advice when a previously strong employee is no longer effective:
- Read the Netflix Culture: Freedom and Responsibility slide deck
- Remember that as the organization grows, not everyone will grow with it
- What’s best for the individual and what’s best for the startup are two different things
- Jack Welch categorizes the four types of employees and would move this person into a different role
This situation needs to be handled thoughtfully and directly. Everyone knows when a team member is no longer effective but they also want to see the person treated fairly and professionally.
What else? What other items should be considered when a previously strong startup employee is no longer effective?
David Cummings on Startups 
This is pretty common and is usually the result of hiring too junior or lower paid people to start when the budgets are tight. The ideal scenario is to have early employees that can grown with the company versus being outgrown. This is a tough one.
This is a natural outcome when companies evolve from the entrepreneurial to the managerial. As companies scale and grow, the persona of employees start to take on deeper functional roles rather than the jack-of-all-trades role common is the early stage. The disconnect tends to be in the mind of the early stage employee who expects to be at a more senior level than what the company needs him/her to be.
We see this all the time with our portfolio companies.
I think it’s unfair to pin the disconnect on the junior-level early-stage employee. When the employee was recruited, they were likely promised the ability to make a big impact and grow rapidly with the company. That’s part of the startup allure.
In that case, the disconnect would be between what management sold the employee and what management delivered. Because the employee is not a seasoned entrepreneur or manager, it’s unreasonable to expect them to anticipate this dynamic.
None of this changes the end result, but it’s important to empathize with the early employee who helped make the growth happen.