Many, many early employees in startups have experienced this, but few people talk about it openly: After fast growth, they found themselves in a situation, in which their once highly appreciated skills are no longer needed. This can be a tough feeling of loss on multiple levels as the father of modern entrepreneurship, Steve Blank, recently described in his blog article (https://angel.co/blog/steve-blank-how-to-keep-your-job-as-your-startup-grows): Loss of status and identity, loss of autonomy, loss of community, loss of certainty, loss of fairness.
Even more important as a CEO to help the employee cope with this and find a solution that works for all - be it a new role or, as hard as it sounds, considering to go separate ways in the future. Below are some useful tips for CEOs how to confront the employee that a change is needed:
#1 First, check out employee's self-awareness level and perception.
Do not confront the employee with the "full package" saying something like 'Listen, we have seen your role has changed and you might not be the right fit for it anymore'. Rather, try to address your observation that the employee's role and role requirements have pretty much changed and ask him/her how s/he sees the situation. Try to keep in tough with the employee, have lunches, meetings, to slowly get an understanding of his/her views.
#2 Deal with emotions before you jump into solutions.
Change management studies have shown: one needs to have passed the denial and frustration stage in order to emotionally open up for new options and opportunities. As a CEO, the only way to speed up this process of emotional and rational acceptance is to listen to the employee to understand his/her fears without (!) proposing solutions. This initial stage is just about listening, listening, listening. No more.
#3 No victimization nor fraternization.
It is important to tell the employee that drastic role changes over time are happening in EVERY startup. However, be careful not to blame someone or something else, or play the best friends card, this only allows for a continuation of denial.
#4 Leave the employee in the driver's seat.
The feeling of loss is hard enough for the employee, so at least empower the employee to look for options and opportunities himself/herself. An external coach as a neutral person might help the employee to be back in the driver's seat.
#5 Be clear on what is not an option.
Even if it hurts: Do not let the employee believe there is still a chance to remain in the role IF you simply do not see any chance. Provide reasons why. Mid-term, clarity is less hurtful than pretending there is still a chance.