QUESTION: I have an employee who has been with me since the start. He has always reported to me. Although he is a good salesman, he’s not a sales manager. I know that the time will come when I need to bring in a sales manager over him, but I’m worried about that transition. How can I do this smoothly?
ANSWER: This is a difficult issue. It can be exacerbated if you have done what so many entrepreneurs do, which is to hire friends and family. If business owners go that route, we strongly suggest they do it with their eyes open. Recognize that at some point the person may have to be layered — placing someone above them — or, worse yet, replaced.
Any time you layer an employee, there is the risk of hard feelings. However, we’ve found that following these five tips will increase the probability of a smooth transition.
Don’t promote automatically
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The best widget maker is not necessarily the best manufacturing manager. Too often, entrepreneurs hire a widget maker (let’s say, Uncle Fred). When a second widget maker is needed, he or she naturally reports to Uncle Fred because Fred is an experienced widget maker. Before long, Uncle Fred is managing a staff of widget makers, so he has been automatically promoted. Unfortunately, if Uncle Fred doesn’t have the skill set to be a manager, you’ve got a problem. Make sure that promotions into management positions are explicit decisions, not unconscious progressions.
Assess employees’ skills early
Make a conscious decision regarding the ability of your first employees to grow into management positions within the organization. Make this assessment long before you need a manager. Don’t give people management responsibilities if they don’t have the skills to succeed. It seems as though you have done this. Good for you. Now, don’t make the mistake of having people report to your salesperson.
You may have an employee who you think could develop the skills to manage with some training. This is a process. It’s not something that happens in a single seminar. Begin investing long before you need the employee to accept management responsibility. Give him or her opportunities to practice the new skills before being promoted. For example, have the employee manage a task force or a special project, and provide feedback on performance. If you determine that your salesman could develop necessary management skills, then work with him on this immediately.
A major problem occurs when employees who lack the skills to succeed as managers are promoted and their compensation is increased to match the job. When such employees fail, the company is left with unattractive alternatives:
1. Let the failed manager continue to underperform (the worst possible choice for the enterprise, but one we see small businesses make too frequently).
2. Terminate the employee.
3. Demote the employee and reduce his or her compensation.
4. Demote the employee but allow him or her to keep the higher compensation.
There are no good choices here. Which one is the “least bad” will depend on the situation. If the employee is a friend or family member, the situation is even more difficult. Our advice is to not raise a new manager’s compensation until he or she is succeeding in the new role.
Set expectations in advance
Have candid conversations with employees about their aspirations and your perspective on their abilities. Don’t let employees develop false expectations. It will only result in a disgruntled employee at some point.
Layering employees is always difficult, and nothing you do will guarantee success, but following these tips will significantly improve your chances.
Doug and Polly White have a large ownership stake in Gather, a company that designs, builds and operates collaborative workspaces. Polly’s focus is on human resources, people management and human systems. Doug’s areas of expertise are business strategy, operations and finance.
