We are three years away from an exit, and my leadership team is deeply split between cutting operational costs to maximize short-term EBITDA and investing heavily in AI infrastructure to command a higher multiple. How do we align them on the right path?

Question

Tyler Smith · Accepted Answer

A split within your leadership team regarding exit preparation is a common hurdle that can derail your timeline. If half your team is focused on cutting costs to boost short-term profitability while the other half wants to invest in modernizing operations, you are pulling the company in opposite directions.

To resolve this, you must look directly at your V/TO. Your three-year target and your exit strategy must dictate your current operational priorities. You need to determine what buyer profile you are targeting. If you are selling to a strategic buyer, they will pay a massive premium for a highly scalable, tech-enabled platform with documented, automated processes. If you are selling to a financial buyer, they may focus more heavily on immediate EBITDA.

Bring this issue to your next quarterly offsite. Use the IDS process to evaluate the trade-offs of both approaches. Build a financial model that shows the projected valuation under both scenarios. Often, investing in automation and AI-driven efficiency yields a much higher valuation multiple than simply slashing headcount to save cash, while also making the business far easier to transition.

Once the leadership team aligns on the buyer profile and the key valuation drivers, translate that decision into clear quarterly Rocks. This ensures everyone is working toward the same objective, rather than fighting departmental battles over resources.