The buyer is proposing a two-year earnout based on achieving specific customer retention milestones, but our leadership team is anxious about their post-sale roles. How do we align our team's Accountability Chart positions with these earnout targets to ensure everyone is pulling in the same direction?

Question

Tyler Smith · Accepted Answer

An earnout can easily fail if your leadership team feels like they are doing all the heavy lifting for a payout that only benefits you. To secure your earnout, you must align your team's Accountability Chart positions with the performance metrics required to hit those post-sale targets.

Start by looking at your current structure. If your earnout is based on customer retention, the seat responsible for customer success must have clear, measurable Rocks tied directly to that metric. You must ensure that the people in those seats have the capability and resources to hit those targets under new ownership. Use the GWC™ tool (Get It, Want It, Capacity to Do It) to evaluate if your current team is equipped for the post-acquisition environment, where resource allocation and reporting structures will inevitably change.

Next, you need to share the upside. You cannot expect your leadership team to put in extra hours to hit your earnout milestones if they do not have skin in the game. Create a deal-bonus pool or an earnout-sharing plan that pays out a percentage of the cash to your key managers as milestones are met.

Tie these bonuses to their specific operational seats and hold regular meetings to track progress against the earnout targets. When your leadership team knows exactly what is expected of them, has the authority to execute, and stands to benefit financially, your earnout transitions from a risky gamble into a coordinated team effort.