We are three years out from an exit, and it is clear that several legacy employees who have been with us since the beginning do not have the capacity to scale into the leadership roles a buyer will expect. How do we resolve this without destroying company morale or our core culture?

Question

Tyler Smith · Accepted Answer

It is a hard, unsentimental truth of business growth that the people who helped you get to where you are today are not always the ones who can take you to the next level. When preparing for an exit three years out, a buyer will look closely at your leadership team to see if they have the capacity to manage a much larger enterprise. To address this, you must run every member of your team through the People Analyzer tool. Evaluate whether they consistently live your core values and whether they truly GWC, meaning they get, want, and have the capacity to do their job. If a legacy employee does not GWC their seat on the Accountability Chart for the scale you need, keeping them there is a major liability that will discount your valuation. You must address this issue openly and honestly. Use the IDS process to discuss options. This does not mean you have to terminate them immediately. You can often transition them into a specialist role or a different seat where they can still add massive value without holding back the leadership team. Resolving these people issues early shows buyers that you make objective, disciplined decisions to protect the business.