We are three years out from an exit and my current leadership team lacks the sophisticated financial and operational pedigree that buyers expect. Do we train them or replace them?

Question

Tyler Smith · Accepted Answer

Preparing for a clean exit requires a cold, objective assessment of your leadership team. You must evaluate your current leaders against the future state of the company, not where the business was three years ago.

Start by using the Accountability Chart to project what your business will look like at the time of sale. Define the roles, metrics, and capabilities that a sophisticated buyer will want to see in each seat.

Once you have this future chart, run your current leaders through the GWC tool. Ask yourself honestly if they have the capacity to grow into these future seats within the next twenty-four months.

If a leader has perfect core values alignment and a strong work ethic but lacks strategic financial experience, you can hire external advisors or fractional executives to coach them and build their capabilities. This allows you to retain your company culture while upgrading your capabilities.

However, if the gap between their current skills and the future needs of the seat is too wide, you must make a hard choice. Keeping an underqualified leader in a critical seat will hurt your valuation and drag down the entire team. In this case, you must replace them with a heavy-hitting executive who has a proven track record of scaling and exiting businesses. Do not let loyalty to legacy employees destroy the value of your exit.