Dilemma of Developing vs. Replacing Key Personnel

Key Insight

Leaders frequently face the dilemma of whether to continue developing a person in a key seat who is performing well but not exceptionally, or to make a decisive move to replace them, potentially by reassigning them to a different role. Among highly effective leaders, there's a roughly 50/50 split between those who prioritize further development and those who opt for replacement. Historic examples include Anne Mulcahy of Xerox and Herb Kelleher of Southwest Airlines, who tilted towards development, versus Katharine Graham of The Washington Post and Andy Grove of Intel, who leaned towards replacement.

Most executives admit that they more frequently err by waiting too long to move someone out of a key seat (a 'Category 1' mistake) rather than acting too quickly (a 'Category 2' mistake). This tendency often stems from a deep concern for their people. To navigate this complex decision, a series of seven guiding questions can stimulate thinking. These are not prescriptive rules but tools for judgment, where even a single concern might trigger a replacement, or multiple concerns might lead to continued development.

Crucial questions include: 'Are you beginning to lose other people by keeping this person in the seat?', especially if mediocre performance or values-violating behavior is tolerated. 'Do you have a values problem, a will problem, or a skills problem?', noting that values conflicts usually necessitate replacement, while will and skills issues might allow for development if the person exhibits humility and relentless will to improve. Other questions explore the person's accountability (looking in the 'mirror' versus pointing out the 'window'), their perception of work as a responsibility rather than merely a job, the leader's confidence trajectory, whether it's a 'bus problem or a seat problem' (right person in the wrong seat), and 'How would you feel if the person quit?'. If replacement is deemed necessary, the approach should be rigorous in decision-making but compassionate in execution, balancing courage and respect.