The key employee may ask you if this includes a promotion or a raise, which is really up to you to answer. I know in my business, and in a lot of other small businesses, there is an element of “proving” that goes into this before that employee would get a promotion.
For example, they might be called upon to lead ongoing meetings, or lead a project, or take full responsibility and accountability for a goal to be met. Something that lets me see how they approach leadership. More than anything, it’s to show you that they actually do want to lead – that they aren’t just say “yes” for another reason, like a promotion or raise, or to make me happy, or something else.
I’ve also found that the best leaders aren’t motivated by title, so if you get someone to lead without taking on a leadership title, that’s an indication you have a potentially great leader on your hands.
That element of “proof” can be included in your answers to their questions when you first discuss this idea with them.
I would also suggest including a timeline in your answers – what will they be leading and for how long? If they are interested in promotions or raises, definitely have an idea of what you would need to see before giving those, and communicate that with the employee.
But really – the outcome that you are looking for here is knowing if your key employee is truly interested in a leadership role. You may have had informal conversations with them in the past about being a leader. But taking this step to ask them if they want to move forward with leadership makes it a more formal plan.
At the end of the day, transforming a key employee into a leader starts with one thing – that key employee wanting to be a leader.
And the best way to start that conversation is to ask them!