Welcome back to the Mid Market Insider!

Today, we’re discussing one of the hardest lessons business owners learn: when loyalty starts to cloud judgment.

I share a personal example of ignoring my gut on a key leadership decision, why crisis competence doesn’t always equal long-term fit, and how waiting too long to act can quietly hold a business back.

One mistake I see myself and other business owners make over and over again is ignoring our gut when it comes to people.

I’ve been guilty of it.

At one of our plants, we had someone in a key role during a really tough period. The business was under pressure, and he helped stabilize things. For that, I felt a strong sense of loyalty.

And loyalty matters.

But deep down, I knew something wasn’t quite right.

The mistake I made was confusing crisis competence with long-term fit.

Just because someone can help you survive a rough stretch doesn’t mean they’re the right person to take the business from stable… to healthy… and then to truly scalable.

I waited too long to act. That was a mistake.

When we finally made the change, the impact was immediate. The new person stepped in and absolutely knocked it out of the park.

Looking back, it was obvious that the role had outgrown the individual, but at the time, loyalty and gratitude made it hard to see clearly.

I’ve seen the same dynamic play out in other portfolio companies as well.

In one case, we eventually uncovered some outright shady behavior. But before that came to light, this was someone everyone liked. He was polished, persuasive, and seemed indispensable.

After he was gone, something interesting happened.

The culture improved.

People who had been quiet, hesitant, or constrained started stepping up. New leaders emerged. It became clear that this individual wasn’t just a bad actor with some lapses in judgment… he was a drag on the organization.

That realization is uncomfortable. Especially when you’ve defended someone or delayed action longer than you should have.

The takeaway is a tough one: loyalty is important, but it can’t override reality.

Businesses evolve. Roles change. What worked at one stage can quietly become a bottleneck at the next.

If your gut is telling you something’s off—especially with leadership or key roles—it’s usually picking up on signals before your rational brain wants to admit it.

Waiting rarely makes it better.

In most cases, it just makes the eventual change harder… and more expensive.

If this resonates, you’re not alone. Most owners learn this lesson the hard way—including me.

That’s all for today’s newsletter! Thanks for reading!

In next week’s edition, I’ll share a real example of how inbound buyer interest can quickly turn into a distraction, and why responding to every request isn’t always in your best interest.

We’ll talk about how to spot bad offers early, protect your time, and why preparation is what gives owners real leverage when buyers come calling.

Keep building,
Nick