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I think the best thing you can do is be honest and share this decision as soon as possible. The news may or may not be received well but that’s just the risk you have to be willing to take. At the end of the day, they are going to find someone else to fill the role.
Do you believe it could be interim step to something bigger? If yes, could you power through?
If you have evaluated pros/cons, and know in the gut, you should follow it. Your gut is pretty much subconscious mind telling you to do the right thing which is right for you.
Why do you think this high level leader specifically tapped you, fully aware the deal had gaps for you that would not be attractive? Perhaps a short-term pain for a long-term gain? Do they need your skillsets and c-level exec will appreciate you winning one for him/team?
I dodge this bullet, and I'm happy to help and share experience. Feel free to connect.
The conversation went better than expected. I was up front with the exec and let them know that this would come as a surprise. I shared my thoughts, let him know I’ve had conversations with the right people, and that the decision was predominately based on my career goals. I think I kept the conversation sympathetic, respectful, and professional.
Also a follow up for anyone interested - making this decision didn’t sour my relationship with this exec, in fact it made it better because I think he appreciated that I was up front and stuck with guns. In the end he still goes to bat for me and still reaches out to me to be part of high visibility opportunities.