In a project-based company, salespeople are heroes for closing large, complex, custom projects. This incentive structure is directly opposed to a product model that requires standardization. The transition to product will fail unless sales compensation and culture are realigned to favor standard product sales.

An earn-out is a tool for alignment, not just a financial hedge. If a target company is on track to miss its earn-out targets, a savvy acquirer will proactively renegotiate the terms. The long-term value of retaining and motivating the key team members outweighs the short-term financial gain of a missed payment.

To solve the persistent issue of sales and marketing misalignment, structure executive compensation around shared company revenue goals. When leaders' bonuses depend on overall revenue attainment rather than departmental metrics like pipeline or MQLs, it forces genuine collaboration and a unified focus on winning.

Don't "stuff the channel" by forcing your existing sales team to sell an acquired product with a different model. At Cisco, a usage-based product was kept separate from the enterprise sales team, who were incentivized by large deals and wouldn't have prioritized it.

Earnouts rewarding only the acquired team's siloed performance create a major integration roadblock. This structure incentivizes them to hoard resources and avoid collaboration, directly undermining the goal of creating a unified culture and destroying potential cross-functional value.

Zayo rarely used earnouts because they are fundamentally incompatible with a rapid integration strategy. An earnout requires tracking the performance of the old entity, preventing the acquirer from fully 'mashing' it into their platform to achieve synergies. It also keeps key talent focused on old metrics rather than contributing to the new, combined organization's success.

Salespeople's biggest frustration with comp plans is being held accountable for outcomes they can't directly influence. This perceived unfairness is a primary driver of attrition, making it critical to align incentives strictly with a seller's direct responsibilities and control.

In an earn-out scenario, acquiring another company that competes for the same geography or clients can make a seller's targets unachievable. This is a major breach of trust unless the possibility was discussed upfront. Serial acquirers must plan for this and communicate their M&A strategy transparently.

Founders must be clear about their motivations for selling and desired outcomes post-acquisition, including their own role and the fate of their team. Unclear or unmet expectations are a major cause of post-M&A dissatisfaction.