One of the most difficult challenges in a growing business is recognizing that your team needs to grow, too. If you’re leading a company somewhere between $10M and $100M in revenue, your team is where growing pains tend to show up first.

I’m not referring to the team’s size, even though that will likely grow as well. I’m talking about the people themselves. Their ability to manage complexity, take on responsibility, communicate, and work with a wider range of people. It all requires growth—or at least adjustment.

If they won’t or can’t, they may put the future of the whole company at risk.

This is especially difficult when the people involved have been with you for years. Maybe they helped build the company. They may have demonstrated a real commitment to you and the team. They stayed during lean seasons. They went through growing pains. They know the customers, the systems, the history, and your preferences as a leader.

That kind of loyalty matters.

But while loyalty is valuable, it does not equal readiness for the next version of your business.

Let me give you an example, based on a real situation.

Imagine a loyal bookkeeper working with a small company doing just a few million in revenue. She’s been consistent and dependable for 15 years. During that time, the company didn’t grow much. It had a small team. The business was simple.

Then new leadership comes in and sees more potential. Over the next few years, the company grows to $15M in revenue.

At this point, the business needs become a little more sophisticated. Instead of just a bookkeeper, it probably needs a controller. The obvious decision is to promote the bookkeeper. She knows the business, and she is trusted.

But bookkeeping and controlling are two different jobs.

The business now needs better reporting. It needs forecasting and analysis. It needs a stronger structure and controls. It needs someone who can manage a small accounting team and help leadership understand what is really going on financially.

She struggles to set this up. She defaults to, “I don’t think that’s needed.” Or “The software can’t do that.” She clearly doesn’t enjoy managing people. It appears she’s trying to manage a midsize company with small company methods.

But because of her history and insider knowledge, these gaps are tolerated.

Then growth accelerates again. In a few years, the company catapults from $15M to $50M, then to over $100M.

From the outside, this looks amazing. The growth is dramatic. The company receives attention and recognition. When I congratulated the CEO, I expected him to be upbeat. But he couldn’t hide the stress and fatigue on his face.

By then, the bookkeeper had become the CFO.

But she wasn’t functioning as a CFO. She was still operating like a bookkeeper. The company needed a financial strategy, stronger internal analysis, risk management, compliance oversight, team leadership, cash planning, and the ability to advise leadership on complex decisions.

In this case, the company also had significant federal contracts, which increased the need for financial sophistication and compliance discipline.

She wasn’t equipped for any of this. In fact, she said she wasn’t interested in receiving more training to become equipped.

The Scaling Gap

The Scaling Gap occurs when a person remains close to the owner or executive team while the responsibilities beneath them grow faster than their ability or motivation.

Jim Collins famously talked about getting the right people in the right seats on the bus. In this case, the right person was in the right seat.

Then the seat changed.

That is what growth does. It changes the business. It changes the roles. It changes the weight those roles must carry.

This is where leaders often get it backward. They design the future organization around the people already in the company instead of designing it around the functions the future company will need.

That feels loyal, personal, and relational. But it creates fragile organizations. Knowledge stays trapped inside individuals. Job descriptions remain vague because the real job is “whatever this person has always done.” When that person leaves, the company struggles to fill the position because “they wore so many hats.”

It also limits growth. You have to build with the right material. Wood is a valuable and beautiful building material. But you can’t build a skyscraper with it.

A person can be valuable, trusted, and deeply appreciated at one stage of the company and still not be the right person to carry the next stage.

The leader’s job is to recognize this before failure makes it obvious.

That is hard. The leaders I work with feel loyal to their people. They are often ambitious, entrepreneurial people who are willing to learn whatever it takes to succeed. So they assume everyone else is wired the same way.

But not everyone has the same ambition, capacity, or tolerance for change. Not everyone wants to take on greater responsibility. Avoiding that reality doesn’t protect people.

What feels like a difficult conversation now will almost always become a more painful conversation later. Either you risk resenting someone because they no longer perform, or you eventually have to confront them after they fail in a role they shouldn’t have been given.

The better approach is straightforward, even if it isn’t easy.

First, clarify where the company is going.

Second, draw the future organization chart around the functions the business will need. Define the capabilities and responsibilities of those roles. Do not put names in the boxes yet.

Third, assess current employees honestly against those future roles. Some will be ready. Some can be developed. Some may not want to move. Some roles will need to be filled externally.

Being honest about where people can succeed is not disloyal. Done well, it is one of the more loyal things a leader can do. It gives people clarity before their gaps become humiliating, create conflict, or damage the company.

Fourth, build your plan for staffing the future org chart.

If you want a structured way to do this, download my Strategic Staffing Template. It walks you through the process of clarifying your future vision, drawing the future org chart, identifying the capabilities each role will require, assessing current employees against future needs, and creating development or hiring plans before the gap becomes painful.

Take good care,

Christian

If you are leading a 10M–100M company and recognize this dynamic in your team, download the Strategic Staffing Template. It will help you sort out who can grow with you and where you need to plan for change.