Had a conversation with a friend who owns his own company this week. He requested the meeting, the topic was how to communicate with a long-term employee who's done great work in the past but has fallen behind the grade of talent the company has hired recently.
It's called the Leapfrog effect. You hired him 8 years ago. He was instrumental at helping you get ramped up when you were a 4-person shop. You're at 50 team members now, and while the long-timer can still knock out the tasks you tell him to do, you really need him to be more proactive and strategic about his area of responsibility. Translation - you shouldn't have to tell him what to do, but you've trained him early to wait on instructions and can't break him of the habit.
There's only one thing you can do if you've coached, prodded and talked until you're blue in the face.
You have to throw the fastball at his head. Performance management 101. "Tim, we've been talking a lot about the extra things I need from you and how I need you to think differently. It's review time, and this one is going to feel different. Because of those conversations we've had and the fact that I'm not seeing a lot of change, I've giving you a rating that says you're not meeting the expectations in the role. We're gong to spend time today talking about what you can do to turn this around. I'm here to coach you, but I can't guide you every step of the way. Rather than waiting another year to really talk about this in a formal sense, we're going to come back in 60 days and really evaluate a) if you've tried to make a change, and b) if the changes you tried to make are of high enough quality and consistent enough to change my view of how you're performing."
"I want you to make it. But time's running out to make the changes we need."
The bottom line is this: You've got a long term employee whose performance doesn't fit what the company is and needs today. They were fine for the role yesterday, but today it doesn't work. There's too much going on, and simply knocking out tasks doesn't meet the need anymore. You need them to knock out the tasks and ask "what's next?" and answer their own question, then take action.
They like you and are used to you. You're a good person. But you've been too patient.
If you want change, you've got to draw the line in the sand. The ball's in your court.