Building the Best Leadership Team for an Exit

The capability of your leadership team is, in many ways, more important than your EBITDA when it comes to a sale. I have seen several sales of otherwise decent firms scuppered when the leadership team say ‘no’, leave, or hold the transaction hostage.

My own research indicates that most buyers would put a strong, committed management team above strong EBITDA. The reason for this is that EBITDA is about the past and a great leadership team is about the future.

Here are six areas you need to nail to position the best leadership team for your firm’s exit.

1: Laying the Foundation

Long before you (the owners) get to an exit, you need to have put in place solid foundations. Firms need different leadership teams at different stages. What got you to 10 people is likely different to what you need post-30 people, and post-90 people. Some of these changes are around specialisation: bringing on (fractionally at first) a CMO, CFO and (if you must) a HRM manager.

You should also be moving towards a place where the leadership team has the structure, clarity, and tools to operate independently. By 30 people you should have defined the leadership roles and responsibilities and provided KPIs or OKRs for their guidance.

You should definitely have moved on from the stage when the leadership are simply the people that started the firm – entrepreneurs rarely make great leaders of scaling firms (though there are some exceptions).

• Draft one-page role charters that specify their key tasks, decision-making authority, and performance goals. Review these charters in individual meetings, addressing any overlaps or gaps to ensure every area of the business is covered without confusion. These can be used for job descriptions should any of them leave.
• Ensure you capture leadership IP as well as IP for delivery. You can codify best practice using tools like SharePoint, Notion or Method Grid to document essential workflows and templates.
• Create a succession plan. Identify potential successors for key positions (not just the CEO!) and evaluate their current skills against future requirements. Use a simple skills matrix to highlight gaps and invest in coaching, mentoring, or training programs to close them. I know when founders are taking this seriously when their successor starts turning up to my Boutique Leaders’ Club instead of the founder!
• Focus on what the business needs: sometimes, the person you thought could be your successor struggles to step up. Ensure that there are no promises in the early stages.

2: Transferring Operational Control

Transitioning control from the founder to the leadership team is a vital step in proving the firm’s independence. Start by empowering the leadership team to make decisions.

• Rotating the role of meeting chair during leadership meetings is another way to develop their decision-making skills. Assign challenging projects in a structured way – such as launching a new service or negotiating a client renewal – and let the team take full ownership.
• Transferring key client relationships is another critical milestone. Begin by attending client meetings alongside team members, gradually allowing them to lead discussions. When introducing them to clients, frame them as the “partner in charge” or “new lead,” reinforcing their authority. After each meeting, follow up with a message that encourages clients to engage directly with the team member.
• To further build their independence, establish a decision ladder that clarifies which decisions require your approval and which can be made by the leadership team. Track their major decisions over time to review their progress and assess areas for improvement.

3: Aligning Interests

For the leadership team to remain motivated and committed, their interests must align with the success of the sale. If you want a minimal earn-out and maximum pay-out, then the leadership team will need to be capable of hitting targets on your behalf.

Indeed, many leadership teams decide to run the sale by themselves to indicate to the buyer that they are now running the company!

• Establish a bonus pool tied to the firm’s valuation or offer equity stakes to key team members. Work with a financial advisor to design a structure that rewards team contributions while incentivizing them to stay focused on long-term goals. Discuss these incentives openly to address individual concerns and build trust.
• Misaligned interests can derail even the best-laid plans. Host a workshop to address how the sale will impact roles, responsibilities, and opportunities for the leadership team. Use anonymous polling tools to uncover hidden concerns and follow up with an action plan that addresses these issues.
• If the sale involves an earn-out, involve the leadership team in planning for post-sale milestones. Use dashboards to track progress toward these targets, assigning specific responsibilities to team members. Ensure that their roles in achieving these objectives are clear and that they understand how their efforts will be rewarded.

4: Preparing for Buyer Interactions

When engaging with potential buyers the leadership team must inspire confidence in the firm’s future. Buyers need to believe they are acquiring a business that is resilient, capable, and not overly reliant on the founder.

Below is what I usually take the leadership team through when I’m advising during the process:

• Craft a clear and consistent narrative: develop key messages that the leadership team will communicate during meetings with buyers. For example, the team should be ready to articulate how they plan to grow the business post-sale, manage key client relationships, and maintain the firm’s unique culture during the transition. Ideally, these should be documented in a guide that all team members can refer to.
• Who doesn’t love a good role-play? You’d be amazed at how badly some of your top people fall apart when being interrogated, even by me! By simulating buyer meetings, the leadership team can practise responding to challenging questions and refine their delivery. Get a list of questions your buyer is likely to ask (I have a template!), such as “How will you retain your top clients during the transition?” or “What’s your strategy for scaling operations while maintaining quality?”. Record the sessions and invite an external advisor to play the role of the buyer.
• Perfect the management presentation: it’s probably the most pivotal moment in the buyer interaction process. Each team member should be assigned a specific section of the presentation aligned with their expertise (unless they really can’t present). Rehearsals are critical and should be conducted under conditions that mimic the real presentation (e.g. using Zoom).
• Highlighting the independence of the leadership team: Buyers need to see that the firm’s success does not rest on the founder. Case studies and data points are useful – e.g. a recent project where they secured a major client without the founder’s involvement. Weave these into buyer presentations and the IM.

5: Building Strategic Alignment

Beyond operational readiness, a strong leadership team must align with the firm’s broader goals. Organise biannual strategy retreats to foster this alignment. Brainstorm challenges and opportunities, and document the outcomes in a shared strategy roadmap.

The relationship between the founder and leadership team is equally important. Engage a third-party coach to mediate discussions about power transitions and address any lingering tensions. Schedule regular “transition meetings” to review progress and celebrate milestones, reinforcing trust and collaboration.

By working together toward shared goals, the leadership team can project unity and purpose, essential qualities that buyers look for in a firm’s leadership.

Stage 6: Managing the Founder’s Psychology

Behind every successful exit is a founder navigating their own internal struggles. Handing over control is a deeply personal challenge. One of the biggest realisations for many founders is that the leader who grows the business may not be the best person to scale or sustain it.

Accepting that your leadership team doesn’t need to replicate your personality or style can be difficult and sometimes requires frank advice from your advisor.

• Have a plan which ensures your gradual withdrawal from the business. Plan this with your successor and ensure you try to stick to it.

• Allow senior to make mistakes (within reason) as it is part of their growth and independence. Resist the urge to step in and solve problems immediately; instead, offer guidance and let them find solutions.
• Prepare for the sense of loss as you move away from something you’ve built. Engage with trusted advisors or coaches who can help you navigate this transition, both professionally and personally. Or you might save some money and simply find a hobby (or start planning the next rodeo).

Conclusion

Preparing your leadership team for an exit is a multi-step process that requires careful planning, clear communication, and a focus on empowerment. By clarifying roles, transferring control, aligning interests, and preparing them for buyer interactions, you can minimise risks and earn-out and maximise value and buyer confidence.