Selling a company is a game with an end. There is a close date, a price both sides sign, and then that game is over. Running the company is a game that is supposed to keep going after the close, for whoever owns it next. The mistake I watch for around a sale is a leadership team that starts playing the first game and forgets it is still in the second one.
The philosopher James Carse called these finite and infinite games: a finite game is played to win, and an infinite game is played to keep the play going. A sale is finite. The company, its customers and its revenue are infinite, or should be, and a buyer is paying for the infinite part.
A sale process pulls a team into sprints and stalls
A deal brings excitement and uncertainty in the same week, and both pull on the work. Teams sprint to make the numbers look their best before diligence, then stall while they wait to hear what happens next. People hold decisions they would normally make, because the new owner might want something different. The best operators get pulled into data requests and management presentations, and the work they used to carry waits for them.
Those peaks and valleys are one of the biggest risks in any period of uncertainty, whether the cause is a sale, a recapitalization or a market that has gone quiet. A sprint borrows from the quarter after it, and a stall is time nobody gets back.
I have been in capital board meetings from both sides of the table, and my test from either seat is the same: do the monthly numbers hold their shape, or do they spike before a deadline and sag after it? A buyer reading your results will ask that question whether or not anyone says it out loud.
Keep one operating rhythm through the whole process
The fix is boring on purpose. Run the company the same way during the process as you did before it, and plan to run it the same way after.
- Keep a small group on the deal and everyone else on the business. Pull your best operators onto deal work only for the hours it needs, and name who covers for them.
- Hold the same weekly and monthly cadence, with the same scorecard. If the measures change mid-process, nobody can tell whether the business is improving or just being presented better.
- Keep making the decisions the business needs. A hiring call, a price change or a customer commitment that would make sense without a deal still makes sense with one.
- Tell people what you can, when you can. Silence during uncertainty does not keep people calm; it sends them to the rumor mill, and good people start looking around.
This is the marathon side of the work. Sprints have their place, but a company that only performs in bursts is telling a buyer it cannot hold a pace.
When the finite game is the whole game
Some deals do end the company as it was: a wind-down, or an asset sale where the buyer wants the equipment and the customer list but not the operation. There, the close is the point, and the work is to protect what is being sold until the day it changes hands. Everyone else is in the infinite game, whether the deal closes or not.
Check this month's calendar and scorecard
Pull up the leadership team's calendar and scorecard for this month and set them next to the same month before the process started. If the meetings run on the same cadence, the team reads the same numbers, and every person working the deal has a named cover for their day job, you are still playing the infinite game. If not, fix that before the next diligence request lands.
I have written about what a buyer needs on day one after a carve-out and about growing past a founder who is in every deal. Here is how I think about the leadership gaps that open during a hold. If your team is heading into a process and you want a second set of eyes on its rhythm, reach out.
John Wyatt · John Wyatt's page · All posts · RSS