We are twelve months away from a planned acquisition, and now that the leadership team knows a big payout is coming, their focus has evaporated. Execution on Rocks has plummeted, and they seem to be coasting on autopilot. How do we keep our leaders motivated and focused on driving traction during this critical pre-exit window?

Question

Tyler Smith · Accepted Answer

When a payout is on the horizon, human nature is to mentally check out and avoid taking risks. This coasting behavior is highly dangerous because a buyer will spot declining execution and either renegotiate the deal or walk away entirely.

To re-engage your team, you must align their personal financial incentives with the short-term performance of the company. If they are getting a payout, tie a significant portion of that payout to hitting specific EBITDA metrics and executing key Rocks right up to the day of closing.

Next, use your Level 10 Meetings to keep the focus tight. Keep the team highly focused on their weekly scorecard numbers and quarterly Rocks. If a leader starts coasting, call them out immediately during IDS. Remind them that a successful exit requires the business to be running at peak efficiency, and any drop in performance directly threatens their payout.

Finally, have a candid conversation about their post-acquisition career paths. Many buyers want to retain the leadership team to run the business after the sale. Help your leaders understand that their performance today dictates their credibility and leverage with the new owners tomorrow. By keeping them focused on their future, you protect your exit valuation.