Upgrading your leadership team can be one of the toughest decisions a CEO has to make—but the payoff can be transformational for the company’s future.
There comes a time in every company’s growth curve when the people who built the business to its current level are not the ones who can take it to the next stage. Recognizing when it’s time to upgrade your management team is crucial for scaling your business effectively.
Signs You’ve Outgrown Your Current Leadership Team
Some of the symptoms that indicate your leadership team may be holding back growth include:
- Frequent mistakes or missed deadlines
- Lack of bandwidth to manage new projects
- Reliance on outdated processes that no longer scale
- Overdependence on the CEO to solve operational challenges
In industries like manufacturing, operations teams may continue to run the same playbook they’ve used for decades. While those strategies may still function, they often keep the company stagnant instead of pushing it forward.
As CEO, replacing the people who are with you from day 1 is gut-wrenching. Even entertaining the thought of replacing them feels disloyal. However, your first loyalty as CEO is to the business itself and its shareholders.
Eliminating the Primary Point of Constraint
As I write in my book, Great CEOs Are Lazy, a CEO’s most important job is to eliminate the primary constraint, what I often call the “kink in the hose”—holding the business back.
One red flag is when you frequently find yourself stepping into operational roles you hired others to manage, such as:
- Closing the books at month-end
- Joining marketing or sales meetings
- Assisting in deal negotiations because your Head of Sales needs backup
When you regularly drop into “player mode,” it’s a clear sign that you don’t have the right leader in place. Your time and your business’s future are being constrained.
A constraint on the business often comes down to talent or process. And it’s tempting to first dig into your processes. However, a more thoughtful approach is first to ensure that you have the right talent in place. One of the best ways to identify high-performing “A players” is that they hate inefficiency and bad processes. So, what do they do? They will create new, highly efficient processes instead. Put another way, when you have the right people, they make the necessary processes. Think of it as gaining a two-for-one advantage.
How to Upgrade Your Management Team Successfully
When the time comes to upgrade your leadership team, you should prioritize hiring candidates who:
- Have led similar functions in businesses of your size or larger
- Bring a proven track record of success at the next stage of growth
- Can attract other high performers from their network
Hiring leaders with experience in larger organizations ensures they won’t be overwhelmed as your company continues to expand. Even better, seasoned leaders typically bring other top-tier talent with them, creating upgrade opportunities across departments.
Upgrading your management team also accelerates the growth of your younger employees. Experienced leaders offer mentorship, guidance, and training opportunities that less experienced managers simply cannot provide.
As one of my clients once put it: “Companies don’t grow; people do.”
If your team members aren’t growing, your company’s growth will eventually stall too.
A Real-World Example of Leadership Change Driving Growth
Consider the story of a founder of a mid-sized manufacturing business. After years of steady growth, he realized he and his loyal leadership team had become the company’s primary constraint.
Rather than resisting change, he courageously replaced himself as CEO and brought in a more experienced executive. Over the next 18 months, the new CEO built a completely new leadership team.
The results?
The company’s growth trajectory exploded to heights the founder had never imagined.
This example proves a powerful truth: upgrading your management team is the single most effective lever to unleash a company’s full growth potential—even when the decision feels painful in the short term.
Final Thoughts
The reality is: the people who get you to $5 million in revenue may not be the ones who get you to $50 million. As your business grows, your leadership team must grow along with it.
Recognizing when it’s time to upgrade your management team and acting on that realization could be the key to unlocking extraordinary success.
