Scaling Without Becoming the Bottleneck with Rajesh Nagjee

Most founders don't realize they've become the biggest constraint on their company's growth until every decision, problem, and customer issue starts flowing back to them.

In this episode, we sit down with CEO mentor Rajesh Nagjee to unpack the founder bottleneck—the hidden leadership trap that slows growth, overwhelms teams, and makes scaling feel harder with every new hire. We explore why companies often "hire the founder back" into the role of chief problem solver and what leaders must do to build organizations that can grow without constant intervention.

Rajesh shares a powerful shift from ego-driven leadership to customer-centered decision-making, explaining why the customer's success should become the ultimate business metric. We also discuss the relationship between stress and performance, how pressure creates interference that reduces productivity, and why long-term thinking helps founders make better decisions with less panic.

The conversation then turns to one of the most misunderstood leadership skills: delegation. Rajesh explains why delegating tasks creates dependency while delegating outcomes creates ownership. You'll learn how to establish decision-making guardrails, define clear conditions of satisfaction, and develop team members who can think independently instead of constantly seeking approval.

We also dive into the difference between competence and capability, why growth naturally creates periods of temporary incompetence, and how pairing business goals with learning goals helps leaders and teams build the skills required for the next stage of growth.

In this episode, you'll learn:

• How to identify when you've become the bottleneck in your business
• Why pressure often reduces performance instead of improving it
• The difference between task delegation and outcome delegation
• How to build decision-making capability across your team
• Why growth creates temporary incompetence—and how to navigate it
• How learning goals accelerate business results
• What founder freedom actually looks like at scale

If you're a founder, CEO, or business leader who feels like everything still depends on you, this conversation provides a practical framework for building a company that scales through people, not around them.

Follow Scaling with People for weekly conversations on leadership, growth, culture, and building organizations that scale without breaking.

Transcript

Turning Chaos Into Compounding Growth

SPEAKER_01 0:02

Welcome to Scaling with People, your weekly playbook for turning chaos into compounding growth. Each week we go under the hood with battle test experts in all areas of business, from marketing to sales, operation financing people, plus product and leadership to unpack the plays, numbers, and systems that turn chaos into compounding growth. Learn straight from founders and experts who've done it and continue to do it successfully. There's zero fluff, just moves that you can still immediately. This podcast is brought to you by Guide to HR. Human expertise, AI-powered impact. Welcome everyone to today's Skilling with People podcast. I'm Guinevere Curry, your host and CEO and founder to Guide to HR. Now you didn't start a company to become its bottleneck, but somewhere along the way, the business you built started running new. On today's episode, we're joining with Rajet Nanji, who is a CEO mentor who's calling the real reason founders hit a wall. Your systems evolved, but your leadership operating systems didn't. We're diving into the velocity crisis, how to delegate ownership instead of task, and the decision frameworks that let you scale without everything running through you. If you're still driving your company like a sedan when it's built like a Ferrari, this one's going to hit.

Rajesh’s Journey And Two Hard Lessons

SPEAKER_01 1:17

Well, thank you, Rajesh, for joining us today. Before we get started, tell the audience a little bit more about you.

SPEAKER_00 1:24

Hey Gwen, thank you for inviting me on your amazing podcast. So I was a senior entrepreneur. I started out uh in my family business, which was established in 1880 by my grandfather. And uh, you know, we've been at it for so many years. I worked there for 12 years and then I decided to take a sabbatical, a very long sabbatical, to pursue music. And I trained to become a professional Indian classical musician. I played the siddha. Wow. And then I got inspired to build a hospital. Uh, and so I built and ran a hospital for another 12 years. It was during that period that I recognized and realized that I had this amazing talent to coach. So then I spent hours and hours, and I did the math, it's 80,000 hours, to master 14 different disciplines on how to apply physics to business. And, you know, having been an entrepreneur myself, done every mistake in the book, hit my head on the wall so many times, you know, almost went bankrupt so many times. You know, I know that part, and so I started working on how I can help business owners and founders to kind of accelerate their business. So that basically how you know I am here and got invited on this podcast.

SPEAKER_01 2:50

A lot of lessons learned there, and my audience knows I love to put my founders and business owners on the hot seat. So, would you mind sharing a lesson learned? I mean, you talked about bankruptcy and all these things. Where, like if you could go back in time and tell your younger self, don't do this or do this instead or pivot here. Could you share one of those stories with us today?

SPEAKER_00 3:10

I'll try a very simple frame. And the frame is that every single business I started, and I've been a senior entrepreneur and I've done many businesses, I've always thought of how this business can make me rich, make me famous, and make me very, very important and powerful. So it was all about me, and uh everything you know went up very well, it was short-lived and it would crash. Somewhere along the line, I started realizing that there's an entity, a stakeholder called the customer. And if I'm not gonna serve the customer, I'm not gonna get where I want to go. So the law is very simple. If you can help the people that you serve get what they want, then they will help you get what you want. So the whole flip that happened was instead of looking at how can I profit, I started looking at how can my customers profit. And then I stopped looking for profitable customers and started looking for profiting customers, and that was the whole shift. And uh, you know, work then started becoming very, very easy. So that is the first frame, the shift that happened for me. Became absolutely customer focused. The second thing is I found that pressure and productivity don't work well together. So Tim Galway has done a lot of work on the inner game of uh sports and golf and tennis and business, and he's got this beautiful equation that performance is equal to potential minus interference. So I started looking at what's the interference that used to bother me and bothers everybody. And one of the biggest is stress, sleepless nights, and all the rest of it. So, where does it all come from? And what is it that is the one common phenomena for every single business owner? And that happens to be the goals that we set. And the goals that we set then become, you know, the pressure points, which then creates so much of stress. Of course, there are bills to be paid, of course, we've got to meet up a cost, but between that and our ambition, that big gap, you know, big, hairy, audacious goals that people set, I mean, are they living in reality? Do you have the, you know, the processes, the people, the structures, the capacity? And then there is a you know a loading mismatch between capacity and and the goals and the load that you take on, then there's going to be all kinds of issues. And then the stress and the interference starts fear, doubt, anxiety. So once that starts loading, the potential starts going down and the performance starts going down. So I've done a lot of experiments in goal setting, and what I really find very, very useful, very simple, is to set goals which are three years out, not one year out. When you set goals which are three years out, you have 12 quarters to play with. So even one quarter you don't perform, it doesn't create as much stress as if you set an annual goal and one month you miss, or one quarter you miss, the stress just goes through the roof. That makes a lot of sense. If you're at the end of every year, if you reset to another three years, you always have 12 quarters that comes down to eight quarters and then again tops up to twelve quarters. Because you know, at the end of the day, a business is not meant for just a year, it's meant to last for a decade, two decades, three decades, and so on. So these are the little little things, you know, once people start thinking about them uh instead of just following the same route. And then do you really need to set a goal? When I asked that question, everybody says, What do you mean if I don't set goals, I won't perform? I said, just think about it. And uh so I I operate for the last I don't know how many years, I don't set goals.

SPEAKER_01 7:34

I I love both those. One, the first one really to me hit ego, right? Our egos, especially as founders, entrepreneurs, you know, we're building something that's like ours, it's our baby, this we're so proud of it, but there's a lot of ego tied to it. And I've actually been on this journey myself where the last like eight or so months I've been asking myself, am I making this decision for the business, or because it will fill my ego and like stroke my ego? And man, that mind frame has really set how I've been answering those questions and what I've been doing for the business so drastically. And I never thought I'm I don't feel like I'm a pretty ego, like I don't feel like I have a high ego or like that's my I don't not a monster of mine, but I did realize I was making some business decisions around will this make me look good or will this help like build my own like you know name and brand out there instead of the guide to HR brand. So I appreciate that vulnerability and I still connect with it a lot. So and the second one is so interesting because the goals, yeah, you're right. I've been taught and as an HR professional, I implement goals, you know, objectives, okay ours into an organization. And then when I first built this business, I set a goal for myself to get so many clients by the end of the year. And I met the goal. The problem was is I forced a round hole in the square pay. And man, I really wish looking back, I did not accept that last client. There were plenty of red flags for me to not accept that last client, but because I had this goal, I was like, I gotta get that client, I'm gonna find that client. And then the first quarter of the next year, I was in just kind of HDLL because I should never have accepted that client. And so sometimes the goals can drive you to make decisions that are not appropriate for you, your business, long-term, short term, um, because you feel like you've got to meet that goal. So that's an interesting perspective of like goals that I feel like keep people on target, you know, on the right path, but it can also deviate you because you're just trying to check that box up. I met that goal. So, man, I appreciate both of those. I resonate with both of them completely.

The Founder’s Trap Warning Signs

SPEAKER_01 9:37

So speaking in today's topic, you know, we talk about the velocity crisis and you say most founders hit it at some point in time. What is the moment where a founder realizes they're a bottleneck and not the solution anymore? What have you seen being that kind of like aha moment for them? And maybe like let me ask another side question to that, which is if a founder hasn't had that aha moment, what are some signs they can look out for to make sure they never become that bottleneck?

SPEAKER_00 10:05

Signs are very uh easy to spot. And if you can't spot them as a founder or as a you know, as a promoter of your business, ask your family. They'll tell you, you know, are you spending quality time with them? Uh are you attending your children's games and piano and whatever else that they're doing? Uh, do you schedule holidays and are able to take them or do you cancel them? Do you have sleepless nights? They'll tell you straight away. The evidence is all over the place. And why is it that you know, every single founder, and I say every single founder, I'm talking about 95%, which is a very, very big number, uh, always, you know, get into this founder's trap. So the founder's trap has got a lot to do with uh, you know, you start a business, it's successful, then you want to scale up, you want to grow, you hire a bunch of people, you train them, you get going, and then you realize that you're still the chief problem solver. And uh, you know, so I realized this in my hospital, the one that I created, is that uh, you know, I hired very smart people, and two minutes later they hired me right back. So they hired me as the chief problem solver, they kept running to me. I felt great as to sit till past midnight every single night solving all the problems, and then I realized that you know this is not a sustainable model, and then I worked on it and made sure that they took the decisions, came to me with this is the problem, these are the two different possible solutions, this is the one that we think will work out, and these are our assumptions, and you know, then it was easy for me to stop deciding and solving problems, to start choosing between what they were presenting to me. So it was a graduation for everybody. So this is, you know, these are the signs, you know, if you're doing too much, if you're the chief problem solver, I mean, what's the point?

SPEAKER_01 12:15

Yeah, you can't do everything all the time and have a scalable business. And it's such a um key manager leadership moment, right? Because uh a lot of things I I totally resonate with that again, because when I'm working with managers at any level, managers, leaders at any level, it's really how do you help grow your people? And when someone comes to you with the problem, instead of giving them the solution, working with them to help them come up with the solution, right? And that really grows them. So a lot of times I'll share you're blocking your people's growth and opportunity to help you scale the business because you're answering the question and instead pose it of like, well, what would what what do you suggest? What do you recommend? How are you going to get this done? And then if they get stuck, then you can brainstorm with them. But giving them that moment to really grow and shine is a key. I think that's what really great leadership looks like. So, how can a founder tell the difference between being needed versus being in the way?

SPEAKER_00 13:15

There's nothing to tell, they are in the way. Period.

SPEAKER_01 13:18

Period. End of story. Drop the mic.

SPEAKER_00 13:21

I mean, you know, come on. They are in the way because they haven't figured out how to scale up a business through their people.

Delegate Outcomes With Clear Guardrails

SPEAKER_00 13:33

And it all starts with delegation. And delegation, you know, just because you hand off things to people to do, um, that's not delegation. There are layers of delegation, levels of delegation. And I've noticed that most founders are at level one or level two. Level five founders are the ones that are ready to scale their businesses and become senior entrepreneurs. So, what's the difference between level one and level five? Level one delegation is when you delegate projects, tasks with a scope. And every single person, you know, nods, yes, of course, there are these are projects that are delegated, of course, there are tasks, and of course there's a scope. If you don't have all of that, they'll go all over the place. But the moment you do that, you convert your leadership team into vendors. Because when you work with vendors, that's what you're doing. It's it's a project-based, it's task and scope, and all the good other other good stuff of the pricing and all that. But this is the essence of it. So if you are delegating projects, tasks, and putting the scope around, you converted your team into vendors. To scale up, you need partners. You do not delegate projects, tasks, and scope to partners. What you delegate are outcomes, and with that is the freedom to take decisions, so they have agency. So outcome-driven delegation completely transforms how people show up. Of course, you've got to create the guardrails, you've got to create the swim lanes, all the rest of it. But there's something called fixed outcome and variable process or fixed process and variable outcome. Now, most people are pursuing fixed process, and then they wonder how come the outcomes are all over the place. But if it is fixed outcome and you give people freedom with all the process and recipes and everything, you know, thought through well, it's not about just throwing an outcome and saying, hey, go figure it out. It's actually working with them to enable them, to train them, to make sure that they really get what is this outcome, what are the standards at which we are playing, what are the you know conditions of satisfaction. So once all of that is aligned powerfully, and then you get out of the way, and people will get the job done.

SPEAKER_01 16:28

Yeah, I see that so much. I see, and I guess my question to you is I've seen a couple founders that are able to do that, and then you know, maybe they didn't put enough guardwells in place or didn't support the person, um, maybe even hired the wrong person. So, how can you what would you say to the founder who said, I've done that and I got burned and now I'm now I'm gun shy to do it again? How can you help them get over that fear and give a different person another opportunity to show that that is the right way to run your business?

Build Competence Instead Of Fear

SPEAKER_00 17:02

We can't get anybody to give up any fear. You know, it's like I learned how to cycle the hard way. Uh I, you know, probably spent 20 days. My brother got it right in three days. I kept falling off, uh hurting myself, but uh I didn't declare that I was a failure. I got back on. So it's really about, you know, I could have said been there, done that, doesn't work for me, end of story. So it's it's really, you know, that that potential within you when you recognize it and say, okay, it's like trying to open a safe, you know. There's a certain combination, the right numbers and the right order, and it starts to work. So it's it's uh it's either you know you you know how to get that done or you don't know how to get that done. It's a competency issue, it's not a capability issue. And people do not have the distinction between what is capability and what's competence. So when a student gets promoted from the seventh grade to the eighth grade, they got promoted because they were capable and competent to write the seventh grade exams. But the moment they get promoted to the eighth grade, they're still capable, but they're not competent to write the eighth grade exams till they build the competence in the year. So competence is learned, and uh every promotion lands you in competence. So a founder that's growing, he's hired a team that's a promotion. The moment they got promoted, the competence that is required for that next grade, if they're operating from the lower grade, that's what is coming in the way. So, how do you recognize that you are incompetent? It's by declaring you're incompetent. Like every single quarter I declare I'm in I mean I'm an incompetent father to my son. That's my son there. Uh he's now 26. I'm an incompetent husband to my wife, I'm an incompetent friend to myself, and an incompetent coach every single quarter. Then I start searching for the evidence and I find the evidence, then I start figuring out okay, how am I going to build that competence? So I end up getting four promotions every single year in the four areas of my life that really matter to me. People are lucky if they get one promotion in three years or four years or five years. So promotion and incompetence goes together. So people who have sleepless nights, they've got all that stuff, they're it's it's exactly the same metaphor. You know, they've they're trying to build a Ferrari, they've built a Ferrari, but they're licensed to operate a sedan. And you cannot drive a Ferrari down a steep mountain at 200 miles per hour or kilometers per hour, whichever. And uh it's it's a beast, that machine is a beast. Yeah, you've got to get license to do that. So that's basically what it is. So if you ask me, the one word is competence and the other word is delegation. These are the two words that people really need to get. And if they're not good at something, people mess it up and then they say, you know what, I don't have the capability. My friend, you have the capability, you've got to build the competence.

SPEAKER_01 20:36

That's such a great distinction, too. And I would say a lot of times I see leaders at all levels promoting someone and then expecting them to overnight work at that level. But like you said, like you get promoted into the eighth grade, you it takes another year before you actually can take that eighth grade exam and pass it. And I think a lot of times leaders forget, I've promoted you, but now I need to help grow you and your your competency, you have the capabilities, you know, but you've got to grow that competency so you can work at that level and eventually get promoted again. And I think that's such a great call-out, too. I appreciate that. So thinking about this, like what if a founder's listening to hear and being like, oh, this resonates so much, what would be like a good first step or two that you would recommend a founder take in regards to switching them, working, being the bottleneck and helping them delegate and also helping them get past that maybe fear block uh to give people the capable the opportunity to showcase that they can grow their competency because they are very capable.

SPEAKER_00 21:42

I think the easiest uh first step is to look at goal setting and really get to what is goal setting, whether they do a three year goal or a one year goal, a goal just by putting a number or you know, percentage of There is the starting point. Immediately after that, you got to do a learning goal and learning goal for your team for yourself, and the learning is nothing but the new competencies that are required. So if you did 100 last year and you want to do 140 this year, well, the gap between 100 and 140 is where incompetence lives. So you want to promote your company from 100 to 140. What are the new competencies? So what are the learning goals? So if you start focusing on learning goals along for every goal, what's the learning goal? Every goal, what's the new competencies for everybody, for yourself, and for everybody else, then things really start uh growing. And uh this is such a simple thing. It's you know, everybody can do it. Like I want to, you know, uh get my music to the next level, and I see the gap from where I'm where I want to go. So immediately, what are my learning goals? What do I need to learn? Is it is it to work more with my left hand, with my right hand, or balance or whatever? So I'm all the time constantly looking at my learning goals and working on them because those learning goals are gonna build the competencies to get me to the next level.

SPEAKER_01 23:18

Yeah, that makes

What It Costs To Never Evolve

SPEAKER_01 23:20

so much sense. So um, as we wrap up, I have one final question for you, which is what do you see the cost of for businesses if they if the founder doesn't solve this, the founder doesn't actually start delegating and stepping out of the way and not being the bottleneck of the business. What do you see happening to companies where the founder never evolves?

SPEAKER_00 23:40

I'll give you the statistics, very scary. 95% of businesses fail to grow. Wow, seven 17% grow at a very incremental, small pace, and 48% go around the break-even point, 11% get into a debt trap, and 19% go bankrupt. That's 95% of businesses and founders, and it's such an easy fix. You don't want to be part of the 95%, you want to be part of the 5%. So, what is it that you're doing that's trapping you here? That's making you the living dead. You don't have a life, you're not able to spend time, quality time with your family, with your loved ones, you're missing birthdays, you're missing parties, you're missing quality time with your parents. You know, that's that's not why you started a business.

SPEAKER_01 24:44

Yeah.

SPEAKER_00 24:46

So you just think about what is it that you're doing that's leading to that. Einstein says doing the same thing over and over, expecting different results, is insanity.

SPEAKER_01 24:58

Yep.

SPEAKER_00 24:58

And 95% of founders land in that trap. I mean, that's insanity, isn't it?

SPEAKER_01 25:07

Yeah, totally, 100%. Well, I think that that's that's a wake-up call if you haven't heard one before. And if you feel like you're one of those founders, um dear listeners, please take this moment and step outside of your day-to-day and really do some soul searching, right? And see how you can start changing how you're behaving and interacting with your team and give them the opportunity to step up and help spill your

The CEO Freedom Operating System

SPEAKER_01 25:31

business. So again, think you will be a great person to interact with, but I I know you have a uh freedom scorecard. Would you like to talk about that for our founders and CEOs out there?

SPEAKER_00 25:41

You know, I started, uh I've been working with uh founders and CEOs for over 30 years. I have uh mentored and coached over 350 CEOs long-term, between three to five years, worked with 40,000 CXOs. And what I really realize is that all businesses run on operating systems. So I've created an operating system, it's called the CEO Freedom Operating System, and it's got various different operating systems that come together to create that freedom, that most elusive thing that founders are seeking, uh, which is you know the pot of gold at the end of the rainbow, which is freedom. And so it starts with the client magnet uh operating system, a delegation operating system, and then it's about leadership operating system, and all of these, you know, they all dance and play together to simplify business. And what are we inviting people to do is to come out and play, play business, yeah seriously? I love that serious, yeah. You know, vehicles driving a car is so much more complex than running a business. Thank God they designed the cars to be foolproof and idiot-proof. So what happens when you start a business? You know, it's it's it's unnecessarily complicated. It's very simple. You know, find a customer, listen to them, what do they want, make that happen, and things start to work. So once you align all of these things, and that's what the Freedom OS does, the CEO Freedom OS.

SPEAKER_01 27:18

Awesome. Well, thank you so much for sharing that. And we will put the link to that uh scorecard in the bottom of the description. Everybody should take it and see where they're at and how they can improve. So, with that, I want to say thank you, Rajesh, for joining us today. Um, so impactful. And I I normally don't call out selling, um, you know, working with anyone, but for the founders that are listening, if this really resonates with you, reach out to Rajesh. He's a great mentor and coach, and he can help you get past this and really grow your business. Um, we'll put all the information in on how to connect with him. And any last final thoughts or or uh tips you'd like to share today, Rajesh?

SPEAKER_00 27:55

There's one big trap. The trap is that every time things don't work, you know, people start looking at there's something wrong here, there's something wrong with me. And they get into that hole, which is a bottomless pit. So if you can switch that and say, hey, there's nothing wrong here, and there's something I gotta fix, it's like saying, you know, if I have driving out to meet you at four o'clock and I get a flat tire on the way, you know, I get out of the car and I start kicking that tire and say, This isn't it, this can't be this this is something wrong, something wrong with me. This is it, you know, and get on with life. There's nothing wrong here. I have a flat tire. Find ways to communicate, find alternate ways to get there, and you know, pay for the coffee. It's so simple.

SPEAKER_01 28:47

Yeah, I love that. That is such a great mindset. Appreciate that. And thanks everyone for joining us today. We look forward to having you on our next episode next week. Until then, have a wonderful rest of your day, evening, wherever you are in the world when you're listening. Take care,

Share Subscribe And Keep Scaling

SPEAKER_01 29:01

everyone. That's a wrap for today's episode of Scaling with People. If you got value from this conversation, do me a favor, share it with someone building something big. And hey, I'd love to hear your take. Drop a comment, shoot me a message, or start a conversation. And don't forget to subscribe so you never miss the bold unfiltered strategies we drop every week. I'm going to recruit founder and CEO of Guide2HR, where we help high growth companies scale smart with people for strategies and AI powered systems that don't just keep up, they lead. If you're building fast and want your HR to move faster, head to guide2hr.com and let's talk. And remember, scale isn't just about speed, it's about people. Until next time, have a great one.