We have successfully removed the founder from daily operations, but now our prospective buyers are pointing out key-person risk among our middle management layer. How do we decentralize authority at the department level during our exit runway?

Question

Tyler Smith · Accepted Answer

Removing yourself as the primary key-person risk is only the first step. Sophisticated buyers will look deeper into your Accountability Chart to identify single points of failure at the department head level. If your head of sales or your lead developer is the sole owner of critical relationships or proprietary systems, a buyer will price that risk directly into your valuation.

To decentralize this authority, you must apply the EOS concept of delegating and elevating down through your entire management layer. Start by identifying the single-point failure seats on your Accountability Chart. Work with those department leaders to document their core processes using your company operating manual.

Next, transition key relationships and daily decisions to supporting seats. For example, your head of sales should transition from managing your largest accounts to coaching account managers who run those relationships. Use your weekly Level 10 Meetings to track this transition.

You must also ensure that your middle managers are training their own successors. A healthy business has depth. If a department leader cannot take a two week vacation without their department stalling, you have a key-person issue. By structuring supporting seats and building a culture where processes are followed by everyone, you prove to a buyer that your operational excellence runs deep, making your business far more valuable.