4 False Expectations that Ruin the Most Stable Business Partnerships
Business partnerships, like most romantic relationships, start with dating (finding potential partners, and checking for a perfect fit), progresses to a honeymoon (trial phase) and then advances to years of harmonious and profitable business partnership, or a horrific and costly separation.
While many partnerships start with the business world’s version of a prenup, these papers can’t account for all the challenges the business partnership may encounter.
It doesn’t matter what kind of arrangement you have with your business partner. Each partner’s expectations will affect your relationship.
Yes, the dating and testing phase might have revealed that you’re a perfect fit. But many times, business partners are ‘on their best behavior’ so many challenges or potential problems may not have surfaced during this time. This happens when you’re blinded by a great opportunity,
But when the excitement wanes, the real work of functioning together begins.
When Your Business Partnership isn’t What You Thought it Was
Support Imbalance on Labor, Management, Training and Customer Service
Picture this: two companies, one a bit larger than the other, join forces to create a profitable business partnership. What’s the natural expectation? The big guy will help the little guy, right?
Right. But don’t expect your business partner’s company to provide support just because you’re lacking. Big companies also operate under tight constraints. They might have a larger workforce, better facilities or a huge inventory, but that doesn’t mean they have something ‘extra’ to give you. In many cases, their resources are already allocated for certain things—be it their own needs or a safety buffer.
To prevent resentments, set expectations at the start of the business partnership. Identify situations when support might be needed, including quantity, duration and turnaround time for said resources. Also discuss pay-back procedures and create a contingency plan for when the other party isn’t able to help.
Communication Style and Frequency
You might be used to monthly meetings, but what if your other business partners are not? Emails and teleconferences might be okay with you, but what if your partner prefers in-person meetings?
Effective communication might look simple for you but there are far too many complexities here. One person’s definition of ‘open communication’ might not sit well with another.
To avoid misunderstandings and to make sure everyone is on the same page ALL the time, create a communication structure that caters to everyone’s style.
If you must, vote on expected reports, meeting frequencies and communication medium. I’ve even seen partnerships vote on acceptable words and jargon! It’s a bit neurotic, but it’s especially helpful for industries where so many things are open to interpretation.
Risk Taker vs. Risk Averse
Just because you’re a risk taker doesn’t mean your partner is. Company size doesn’t matter here. Big or small, each business has their own set of rules—or red tape.
If you want a long and peaceful business partnership, respect other people’s risk tolerance. Don’t accuse conservative business partners as growth averse.
Instead, try to present less risky options, or come up with ways to remove what they see as a risk by offering a trial run of whatever you’re suggesting.
Clash of Clans, Company Cultures Edition
A company’s culture is built early on. A company’s founder and employees are proud—and protective of this. In a way, you can say “they’re set in their ways.”
So when company merges with another, each party might feel threatened of the other. The differences between the two cultures could lead to arguments. Pride will win over efficiency, when each team defends its own way of doing things.
For instance, your business might have a better delivery and packaging process, but the employees from the partner company might be reluctant to learn it, insisting that their process is better.
To prevent such problems, business partners must discuss how they plan to handle procedural and cultural differences early on. If you must, assign ambassadors responsible for forging a bond between the two company’s employees.
Before sealing the deal, partners must write down ALL their expectations for each other—including future needs. Write it down, however far off it seems.
Was there a time when your business partner failed to meet your expectations? Share your story in the comments.
© 2015 Incedo Group, LLC