Buyers keep telling me that our business has too much key-person risk because of my day-to-day involvement. How do I systematically step out of operations using the EOS framework?

Question

Tyler Smith · Accepted Answer

Key-person risk is the single largest driver of valuation discounts. To eliminate this bottleneck, you must transition from operator to true owner. Begin by reviewing your Accountability Chart. If your name is in multiple seats, or if you are both the Visionary and the Integrator, you have a structural problem. You must delegate your operational responsibilities to leaders who possess the hardwired conative drive to execute. Assess your team using conative tools to find individuals with strong Follow Thru and Fact Finder instincts. These people excel at structuring and refining processes. Next, step out of the daily and weekly meetings. Your leadership team must run the Level 10 Meeting independently. Let them own the Rocks and solve issues using the IDS process. If you are always in the room, they will always look to you for the final decision, which keeps the risk centered on you. By stepping back, you create the white space needed to focus on strategic relationships and exit preparation, while proving to potential buyers that the business operates seamlessly without you.