Our head of product development holds all the proprietary knowledge for our core software, and we are terrified a buyer will walk away if they realize we have massive key-person risk. How do we document this knowledge and spread the responsibility?

Question

Tyler Smith · Accepted Answer

Key-person risk is one of the most common reasons a buyer will demand an aggressive earn-out or walk away from a deal entirely. If your head of product development or any other single employee holds all the intellectual property in their head, your business is highly vulnerable. You must de-risk this position immediately.

Start by scheduling structured Thinking Time. Ask yourself: How might we extract this proprietary knowledge so that a new hire can run our product development without a drop in quality?

The solution is not to micromanage your key person, but to change their Accountability Chart roles. Redefine their seat so their primary accountability is to document their processes and train a successor, rather than doing all the execution themselves. Use our core EOS® process to map out their daily, weekly, and monthly workflows.

Additionally, build modern automated workflows and API integrations to handle the repetitive technical tasks they manage. If you can show a buyer a fully documented, automated system supported by a team that understands how to manage it, you convert an individual key-person risk into a scalable, corporate asset.