Outgrowing some of your loyal employees? Stop hoping they will retire. Instead, use this 4-step solution.

You build a business. In every fight along the way–tears, laughter, late nights and Saturday mornings–you have a small crew who made it possible not only to survive, but thrive. Maybe it’s one person or a number, but as the owner of the business, you know in your heart that their efforts and commitments are a big reason why you are in business.

It’s that knowledge that causes you to deny for a long time what has become obvious to others: that the business has moved beyond that early team member. (Let’s call him “Bill.”)

There are all sorts of symptoms–a sense of entitlement, refusal to follow chain of command, stubbornness, resistance to change and new ideas or just not being able to produce at the level necessary to fulfill the role. But Bill has become the elephant issue in the room, as many people in your organization see him as “protected.” What you may not realize is that you are killing your growth culture and alienating your most promising newer people.

You can talk to Bill and try to get him to understand, but let’s be honest–you have tried that a dozen times already. You have considered firing him, and now you may be hoping that he will retire. Let me offer another path to consider, in four simple steps.

1. Re-hire him into a new job: Bill is not successful in his current role, but his unique institutional knowledge may be put to good use on a new challenge. Problem areas in the business, new initiatives or short-term projects are all good potential assignments.

2. Re-excite him with your confidence: One of the things that loyal employees bemoan is “the way things used to be when we were smaller.” They miss your connection as well as the sense that you rely on them. As you make the new assignment, re-establish that confidence and their value to you.

3. Re-focus him on attainable outcomes and impact: In a smaller company, outcomes are clear: an order out by tomorrow morning, a new store opened by the holiday season, invoices collected by the fifth of the month. This clarity helped your early players focus on their day-to-day impact. In this new assignment, you must give Bill the clarity that will bring out his highest performance.

4. Re-connect (without managing him yourself): Now that you have created the connection again, you have to maintain it without taking on the person as a direct report. This is critical: Not only does it let you keep your own objectivity, but it signals to the organization that the person does not outrank everyone else.

This approach is not a silver-bullet solution. You may very well have to take one of the other two paths: fire or retire. However, this path gives you and Bill a chance to honor your early efforts–and gives Bill another chance to be a contributor.

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