Taking over or buying an existing firm poses a unique positioning challenge.
 
The firm has been around for a long time, and has an existing positioning reality (it's already known for something - good or bad doesn't matter) that the new owner now needs to contend with.
 
The new owner often wants to put their own mark on the firm, but they need to do it while still paying homage and recognizing the firm's roots and the good things it's already known for.
 
This sounds simple, but it's actually very complex and emotionally charged.
 
I've seen this with family-owned businesses where the next generation is taking over. It's hard to tell your parent that you are taking things in a different direction.
 
I've seen this with long-time employees who have acquired the business from the original founder. It's hard to manage the existing team through a leadership and possible positioning change.

The difficulty of this is often compounded by the fact that many of these people have never done the deep introspective work to understand who they are and what they need from the business.

Today, let's explore the issues the new owners of these firms face, and how they can address them.

But first... A few things you might be interested, and a few ways I can help.

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If it feels like the momentum has gone, here are a few ways I can help:

1. I can help you, the founder, and your partners gain clarity around why you are really running your firm. Your purpose, identity, intent and capacity are real constraints on your business, and ones that must be managed, to make strategic decisions.
2. I can help you identify the opportunities and gaps of your growth strategy, and whether your core positioning makes you seem risky to buyers.
3. I can help you gain clarity around your positioning, and build a foundation that your team can execute, buyers can trust, and delivery can prove.
4. I can help you think and work through a specific go-to-market decision through a focus session.

Now back to our regularly scheduled programming...

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The New Managing Partner

Imagine a highly successful boutique management consulting firm that's grown through over a period of 20 years by strategically bringing on parters who build new practice areas, and acquiring a few smaller firms to further build out practice areas and capabilities. The founder of this firm has put in the work, built it on the back of his personal industry reputation, later supplemented with the reputation of the partner group he brought on, to over $20 million in annual revenue. Now, this founder has stepped back into the chairman role, with one of the senior partners stepping up, and buying into a managing partner role.

The Challenge

We don't need to get into the financial details here, but through a combination of partnership unit conversion, external capital (loan), and a structured partial buyout, the new managing partner ended up with a controlling stake of 60% and the original founder going down to 40% initially, with the structured buying taking that all the way down to 20%.

The financial restructuring is challenging, and is a major risk to both the founder and the incoming managing partner, but the real risk is actually what happens during and after the structured buyout. The managing partner now has to contend with the way the firm was originally scaled, the original founder's vision, and the existing market position - what the firm is currently known for, based on the last 20 years of strategic decisions and investments.

In this story, the managing partner came in with one of the strategic acquisitions - a digital transformation firm and custom software implimentation firm, with highly lucrative top tier software partnerships. After the acquisition, the founder of this firm came in as a senior partner and later also took over the COO position. He consistently pushed to further expand strartegic software partnerships and a push into complex digital transformation projects. But the original founder had always prioritized more traditional strategy consulting as the key to building relationships and scaling, with digital transformation and technology implementation being expansion and retention opportunities.

The Acquiring Employee

Imagine a successful custom software development firm, with a heavy focus on one industry vertical (with a minimal clients outside it). The firm has been led by the original founder for over 30 years, and has gone through several pivots, adjusting to market trends. The original founder has built this firm to just shy of $8 million in annual revenue, but has become tired, and instead of pushing through yet another pivot, the founder has decided to sell to one of his long-time key employees, who has been a minority partner over the past five years.

The Challenge

The original founder had seen the firm through several market shifts, and was now watching his firm stall out due to AI. He knew that he was not in a position to take the firm through this next phase. His long-time CTO, and minority partner, saw the opportunity to shift the firm from a bespoke software development firm, to a tech-enabled digital transformation firm for their core industry. The core challenge would be getting the core team on board or transitioned out and replaced, and doing this in a way that took advantage of the existing client roster as much as possible.

The minority partner, now the new owner, after a two-year earnout for the original founder, is younger and still hungry to evolve and grow the firm. He is excited and sees a ton of potential in pushing through this next phase. He believes that the current iteration of the firm is likely to plateau, and is buying the future potential. The challenge he didn't anticipate was the push back from so many existing employees.

He knew the team was loyal to the original founder, and knew there would be some consternation and concern, but he didn't expect the constant push back and the conversations happening with the original founder behind his back. A few key employees left within 6 months of him taking over, and a few others he had to transition out because they simply weren't buying into the future he was seeing.

The Next Generation Takeover

Imagine a small engineering firm, in business for over 20 years. The father started it after about a decade working for a few of the largest medical device companies. The business grew slowly, but surely on the back of his relationships and the quality reputation the firm built up over time. The business supported his family, and when his oldest son graduated from engineering school, he joined the company. 

Fast forward 10 years, and now the father is ready to step back, and let his son take over the reigns. Father and son have a great relationship. Father is proud that he has built something that his son wants to take over and grow.

The Challenge

The firm has a strong reputation, but not much of a specialization. This means that operationally, margins aren't as good as they could be, and growth is solely dependent existing relationships and networking. The son knows this, and is concerned about so many of the firm's relationships still being reliant on his father. He wants to specialize, but knows this means making some major structural changes within the firm, and he is concerned with managing this transition with his father still being in the Chairman seat for a while, even with a significantly limited equity and voting stake. 

Managing the Transition (The Internal Repositioning Problem)

Every ownership transition is a positioning problem. It doesn't matter if it's a managing partner buying out a founder, a key employee acquiring the firm, or a son taking over from his father. The financial mechanics get all the attention—the earnouts, the equity splits, the structured buyouts. But the real risk is what happens to the firm's position when the person who built it steps back and someone with a different vision steps forward.

Here's the pattern: the incoming leader sees future potential. That's why they're buying in. They see a market shift, a new capability to build around, a specialization that would sharpen margins. They're right about the opportunity. But they underestimate what it takes to actually move the firm toward it, because the firm's current position isn't just a logo and a client list. It's a belief system. It lives inside the team.

The people who built the firm under the original leader? They signed up for a specific version of that firm. They believe in the way things have been done, the types of projects they work on, the clients they serve. When a new owner walks in and says "we're shifting direction," those people don't just need to learn new skills. They need to believe in a different firm. Many of them won't. And until that internal belief shifts, the external position can't move either—because the team is the product. They deliver the service. They are the firm's reputation in every client interaction.

And here's what makes this even harder: while the new owner is wrestling with the internal belief system, a Perception Gap is already forming on the outside. The market still sees the firm the way the original leader built it. That perception was earned over years—sometimes decades—of consistent delivery, relationships, and reputation. The new owner's vision for where the firm is going doesn't change any of that overnight. So now you have two gaps to manage: the gap between the new direction and what the team believes, and the gap between the new direction and how the market already sees you. If you try to close the external gap before the internal one, your team will be out there delivering a message they don't believe in, to a market that doesn't recognize it. That's how you erode trust on both sides simultaneously.

How to Handle It

If you're stepping into a leadership transition—on either side—here's what matters:

1. Map the internal position before you touch the external one. Before you rebrand, before you chase new clients, before you pitch a new service line; understand what your current team believes this firm is. That's your starting point, whether you like it or not.
2. Measure the Perception Gap honestly. You need to know the distance between where you want the firm to be and where the market currently has you. That gap won't close on your timeline. The bigger the gap, the more internal alignment you need before you even start trying to shift external perception, because your team is the only bridge between the two.
3. Expect the resistance and plan for it. The pushback from long-tenured employees isn't disloyalty. It's the old position reinforcing itself. You built a system that attracts and retains people who believe in a specific thing. Now you're asking them to believe in a different thing. Some will. Some won't. Plan the transition timeline around that reality.
4. Manage the outgoing leader's shadow. Whether it's a founder in a chairman seat, an original owner on a two-year earnout, or a father who's still in the building; they are the old position personified. If the team can go to them when they're uncomfortable with the new direction, they will. This isn't about cutting ties. It's about making sure there's one clear direction, not two competing ones.
5. Sequence it. Internal repositioning comes first. External repositioning comes second. Get the right people believing in the right thing, then let that show up in how the firm goes to market. Trying to close the Perception Gap from the outside while the inside is still fractured is how you end up with a confused team selling a confused message to a market that already had a clear picture of who you were.

The transition itself is not the hard part. The hard part is that the firm's position has momentum, internally and externally, and that momentum was built by someone else. Change the team's beliefs, close the Perception Gap in the right sequence, and the new position follows. If you skip either step, you'll end up fighting the firm you just bought.