I'm looking for some advice on a tricky situation that has arisen in my company. I am the CEO of a very small software firm that is riding a strong growth surge.
Out of necessity, in past years we had a number of (primarily) technical employees reporting directly to me. In effect, most individual employees have been one-person departments, and this two-level structure worked OK when there were 6-7 people total in the company.
Now of course the management team is expanding and also the technical, sales and admin staffs are scaling up. Several of my former direct reports are not ready, willing or able to take on management roles and therefore I need to hand them off to a newly-formed layer of middle management. Secondly, they will also have new peers in similar roles whereas previously they were each unique within the organization.
At least one person is strongly resisting this, and has suddenly become disrespectful and unproductive with his new manager. (He was not a stellar performer as my direct, but certainly acceptable.) I was advised today by his manager that this employee has blatantly disregarded several critical deadlines and has been "goofing off" an inordinate amount. We also suspect his work hours are falling short.
Other than some correcting feedback ASAP, any advice on how to smoothly handle this type of transition? It is something I will need to deal with increasingly in coming months/years if the growth trend continues. Is it as simple as a psychological reaction to no longer reporting to a C-level exec or a more complex issue?
Any tips on dealing with these kinds of "growing pains" would be greatly appreciated!