One of our long tenured leadership team members has equity in the business and has clearly checked out, doing just enough to get by but showing zero passion or drive. How do we handle a partner or equity holder who is coasting in a critical operational seat?

Question

Tyler Smith · Accepted Answer

When an equity partner or long-tenured leader starts coasting in a critical operational seat, you must address the issue immediately. Allowing someone to underperform simply because they own shares or have been with you since day one destroys peer-to-peer accountability and breeds deep resentment among your high-performing leaders.

You must separate ownership from operation. On your Accountability Chart, there are only operational seats, not owner seats. An owner has rights to distributions and major shareholder decisions, but they do not get a pass on daily performance.

Evaluate the partner strictly against the roles of their seat using the GWC framework. Do they truly Get, Want, and have the Capacity to execute at the level the company needs today? If they are coasting, they clearly do not Want or have the Capacity to drive the seat forward.

Have a direct, unsentimental conversation. Explain that while their equity status is secure, their operational performance is failing to meet the seat's requirements. Give them a clear choice: either step up and fully re-engage in the seat, or step down from operations and transition to a pure shareholder role.

This transition allows you to hire a hungry leader who GWCs the seat, while your partner retains their equity without dragging down operations.