An entrepreneur can easily feel like a frog at the bottom of a well. Such insigt serves as a constant reminder and in doing so broaden the sky that we see.

Founder-run organizations in particular are very susceptible to ignoring this critical area, which is not surprising since the founder(s) themselves probably do not have professional management skills, and in the early stages everyone is hunkered down trying to do the work, avoid cash crises, etc.

You can’t afford poor performers even when you are at 20 employees or fewer, and maybe the product hasn’t even rolled out the door yet. And then when you ramp up your customer-facing activities with a small workforce, one bad hiring/firing decision can cripple the entire company.

If you set up an ongoing process of employee review and evaluation, as well as a regular feedback loop with your employees, from the very beginning, you can mitigate some of these bumps at the $3-6-9 million milestones. If you treat your employees as collaborators and assets / profit centers instead of headcount / cost centers, it makes a huge difference in growing a successful business.

When and if you do add middle managers, one of the key things you want to look at is their ability to enroll the workforce in constantly raising the level of performance and contributing to the growth of the organization. That’s how you keep superior employees and set standards that motivate the not-so-superior people to improve their game.