Our company has several legacy employees who are no longer the right fit for their seats but have deep institutional knowledge. How do we address these people issues before we begin due diligence so a buyer does not see them as organizational liabilities?

Question

Tyler Smith · Accepted Answer

Legacy employees who have outgrown their seats are a major red flag for buyers. Acquirers will quickly spot these bottlenecks during due diligence and discount your valuation, knowing they will have to perform painful organizational surgery post-close. You must resolve these issues before you go to market.

Start by evaluating these individuals using the People Analyzer tool. You must determine if they are a core values fit, which is Right People, and if they truly get, want, and have the capacity to do their jobs, which is Right Seat.

If they are Right People but in the Wrong Seat, use your Accountability Chart to restructure their roles. Extract their institutional knowledge by assigning them to a specialized advisory or transition seat, and move highly capable leaders into the operational seats they vacated.

If they are Wrong People, you must have the courage to transition them out of the company. Keeping toxic or underperforming staff because of their historical loyalty sends a message to your leadership team that standards do not matter.

By cleaning up your organizational structure and ensuring every key seat on your Accountability Chart is filled with someone who possesses the right conative drive and GWC, you present the buyer with a clean, high-performing team that requires no immediate post-sale restructuring.