The hardest part of high growth – navigating a strategic exit

As a business leader, the most expensive person in your organisation isn’t always the one with the highest salary. Often, it is the individual who has become a “cultural handbrake” – the toxic high-performer, the long-time stalwart of the team who can no longer scale, or the family member standing in the way of progress.

Making the decision to exit someone from the business is one of the toughest challenges for many leaders – but inaction is always costly.

In our work with scaling businesses, we’ve found that while removing an overtly toxic person is a clear-cut decision to minimise risk and protect culture, the harder is actually the borderline case. These are the loyal, often popular, employees who simply lack the capacity or skills for what the business needs now – and in the future.

Facing up to these exits isn’t just an HR task; it is a fundamental requirement for reaching your 2026 goals. But that doesn’t make it easy.

The true cost of inaction

“Wait-and-see” is a strategy with a high price tag. When you tolerate poor performance or toxic behaviour, the damage spreads far beyond a single department:

Star players leave: Your top performers are the first to leave when they see mediocrity or toxicity go unaddressed. They lose respect for a senior team that refuses to manage the situation.
Leadership drain: The emotional and practical energy required to “work around” a difficult person creates a massive drain on leadership time that should be spent on growth.
The “silent” culture: If leadership doesn’t act, it fosters a culture where people are afraid to speak up, believing that management will never actually deal with the core issues.
Cultural erosion: Tolerated behaviour becomes the new standard. If a toxic person is allowed to stay, their behaviour becomes the accepted blueprint for success.
Financial risk: Underperformance in growing businesses takes a disproportionate toll. In a larger business it might have less impact but in a smaller, growing business, every person’s contribution has a direct impact on the bottom line. The cultural ripple effect, the loss of key employees, and the reduction in performance and productivity have a direct impact on your commercial success.

Performance frameworks are your best friend

To move from an emotional decision to a commercial one, it’s absolutely critical to demonstrate clear reasons for an exit. We tend to use performance frameworks with clients so there is real clarity around expectation, development and performance. While the approach in each client will vary, using a matrix framework to categorise employee performance and potential helps map where each person sits, helping leaders identify whether you have a coaching opportunity or a necessary exit (as well as being an invaluable tool for succession planning).

Effective frameworks incorporate your company values as a measure of acceptable behaviour. These should never just be words on a wall – they should be the standards to which every person in the business is held accountable and the bar for recruitment and performance evaluation.

High performance / low values: The “toxic star.” Removing them often leads to an immediate spike in team productivity and morale – don’t be put off by their apparent brilliance. The detrimental effect of their negativity will nearly always outweigh their technical performance (though ultimately, that is a decision you need to make as a leader)
Low performance / high values: The “loyal underperformer.” These are the hardest to exit, often involving family or long-term friends. However, keeping them in a role they can’t fulfil is a disservice to the 50, 100, or 500 other people whose livelihoods depend on the company’s health. It is also a disservice to them; they could be far happier in a different role, so don’t kid yourself you’re being kind ignoring the problem, as it isn’t fair to the business or to the individual.

Family dynamic: nudges vs. bold moves

In family-run businesses, this issue can be particularly complex and the fear of “betrayal” often leads to paralysis. We usually see two approaches adopted:

The subtle nudge: Attempting to slowly move a family member into a better fit without a direct conversation. This rarely succeeds and often creates more friction.
The bold decision: Moving the individual to a different role – or out of the business altogether – with dignity. When handled with a “soft” approach focused on capability rather than blame, the impact on the wider business is almost always positive.

Navigating the exit with integrity

With the evolving UK employment regulations, you cannot afford to be “blindly led” by process alone. You need clear performance metrics and a framework that treats people as human beings, not just case files.

The future-fit test: Ask yourself: “Knowing what I know today, would I hire this person again?” If the answer is a hard no, coaching is likely just delaying the inevitable.
Treat people with dignity: Follow the process, but be considerate and clear. Treat others as you would hope to be treated in their position.
Use outside help: Using external expertise, such as a fractional People Director, allows the CEO to stay focused on the team’s future while a professional handles the “heavy lifting” of the exit. This keeps the decision commercial and the execution compliant.

Making the decision to exit someone from the business is rarely an easy one, but it is often necessary.

Reducing exits – proactive ways to avoid more difficult exits

The need to exit people will always stem from one of a few different root causes.

Growth – your business has grown and evolved and the skills you need now are not the ones you originally started out needing. This is really common and is a situation many business leaders find themselves in.
Recruiting the wrong people – this happens more often than you might think and businesses waste millions of pounds every year in the UK on the wrong hires. The more senior the hire, the more costly the mistake – once you factor in recruitment fees, onboarding, training and loss of productivity over the whole process, you’re often looking at double the annual salary in costs alone.
“Gesture” values – when values are just words on a wall rather than lived standards of behaviour, there will always be a higher risk of exits down the line. If you know who you are as a business and are strict about recruiting to those values, living them and holding others to account at the same level, then you are less likely to run into issues further down the road.
Unclear expectations – roles without clear responsibilities and accountabilities, unclear performance metrics, vague goals and objectives; these are all typical in many businesses and the impact on performance is stark. Invest in clarity and make sure everyone understands why they are at work, with clear ways to measure performance. It avoids a lot of messiness and unhappiness in the long run.
Protect your culture and walk the talk – your people look to leadership for the behavioural standards they should adopt themselves. If you aren’t modelling the right behaviours from the top – and that includes making tough decisions for the greater good of the business – then your culture will erode over time and the wrong people and behaviours will creep in.
Strong succession planning – businesses which remain connected to a vision and mission and have a strategic people plan to get them there are far more likely to avoid unexpected exits along the way. Proactive planning for your workforce is a really important part of leadership and you aren’t really investing in the future of your business without a great succession plan that you are using as a live, everyday blueprint for progress. Succession planning will sometimes result in the need for restructuring or exits too, but it will be a proactive, strategic move rather than a reactive one.

Tackling the root causes of these areas may not completely eradicate the need for difficult exits, but it should reduce them, and make your people planning more long-term, proactive and intentional.

The bottom line

An exit is almost always for the greater good of the business. Removing someone who doesn’t fit – for whatever reason – opens up an opportunity for an internal promotion or an external “A-player” to push the company forward, or a better external person to come in and drive progress.

Success in 2026 requires an agile team built on a foundation of respect and high performance. It’s time to stop managing the problem and start solving it.