how should we demote an employee?

A reader writes:

My company is a young and growing start-up. We are in a period of rapid growth that is leaving all of us stretched to the brim. I am on the leadership team, and we have a situation with an employee, Adam, who we (maybe carelessly) promoted to a key position. He has been in the position for six months and it’s just not working out. It is absolutely our mistake. We put him in the position out of necessity rather than carefully considering who would be a good fit.

Now we are being forced to reckon with our mistake. It is just not working out, and it’s time to replace him. We would like to move Adam to another position where he has a greater chance of success.

The debate we are having is about how we should go about this. I am advocating that we tell him, hope he still wants to stay on with us, and allow both internal and external candidates to apply for the position. I want to allow our internal candidates the opportunity to move up.

My colleague is arguing to hire externally for the position and not tell Adam what is going on until we have found a suitable replacement. We are short-staffed and need to hire more people regardless.

Both of us are concerned about Adam quitting before we have found a replacement. It is a vital position to our organization, and not having someone there for any extended amount of time would place more work on our already overburdened team. I am very concerned about what it would do to trust and morale if we are not transparent in this situation. What would you recommend that we do in this situation?

I answer this question over at Inc. today, where I’m revisiting letters that have been buried in the archives here from years ago (and sometimes updating/expanding my answers to them). You can read it here.

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