I've had a bunch of these conversations in our peer groups. I see the same setup again and again.
You acquire a business where one person, usually a long-tenured estimator or sales rep, controls somewhere around 30% of revenue. This person has been in the same market, at the same company for a decade or two. Everyone in your market knows him. At some point a lot of customers stopped calling the main phone line and just call this person's cell.
The relationships are his, not the company's.
Then the new owner comes in and starts trying to improve things. Implement a 50% deposit requirement, take photos at a job site, document new estimates, enter quotes into the CRM. Basic stuff.
And that person just doesn't do it. Not openly defiant or spiteful. They just don't do it. They've been doing things their way for 20 years, they know how much money they bring into the business, and they have some amount of "Fuck You" leverage.
What I've noticed is that most new acquirers recognize the problem immediately and they know they need to fire that person. This is after many direct 1:1 conversations that don't result in changed behavior.
But they hold onto them for months because the math feels terrifying. They have this big SBA loan every month and if this person leaves and takes 30% of revenue with them, they're going to be screwed immediately.
So they drag their feet, hope it improves. But at the same time they're asking every other employee to follow and adapt new systems, procedures, use new tools, hold them accountable. All while this other person (the key man) does whatever they want.
Enter new business problem: shitty culture.
One of our holdco guys described this on a call earlier this year while he was still in the middle of it. He said the rest of the team could see that this person wasn't being held to the same standard as everyone else. Another member said "it's poison". If people see that you say something but there are no consequences for ignoring it, that becomes your actual culture.
Congratulations, now your employees feel mistreated, or worse, start becoming disobedient. And you're not the leader anymore. No one is. This kind of business owner anxiety is more common than most people think.
Every owner I've spoken with who eventually let that person go has said roughly the same thing. "Most of the customers stayed. The team rallied, and several of them told me afterwards they're glad that person is gone." It's not uncommon for high performing salespeople to also be a big PITA that other employees are quietly tolerating. And most owners said they wished they'd let them go much earlier.
One of them fired his version of this person at the end of March. Almost every customer stayed, record sales months followed, and most importantly that owner felt the first sense of relief he'd felt since owning this business.
Here's what this comes down to:
The longer you wait to address this, the more damage gets done to your culture and your leadership credibility. Every owner who's been through it wishes they'd acted sooner.
If you're in this exact situation yourself, consider connecting with free peer groups where other business owners are working through the same challenges.
