Top Seven Issues Facing Business Partnerships
While we often think of business partnerships as those who own a business together, the term can be expanded to include any relationship you have with others inside or outside your firm. Whether you are dealing with an equity relationship or not, the same challenges exist and cause business relationships to falter and fail. And any legal agreement you put in place isn’t going to prevent these problems from occurring.
Issues Facing Business Partnerships:
- Too many chiefs, not enough Indians. No business can make decisions and move forward when you have too many people making decisions, or who feel they should have input into the decisions. Even if you are an equity partnership, someone has to be able to make a decision without everyone feeling like they have a say. Yes, it’s useful to hear other people’s ideas and thoughts, as long as they don’t feel like their voice is THE one that should be heard and used. Nothing interferes with productivity, efficiency, and relationships more than too many voices and no one leading the charge.
- Poor, ineffective, or no communication. It probably goes without saying that the single biggest factor that interferes with relationships is communication. You think they understand what you said, they listen with filters, or don’t listen at all. You both assume you understand each other, and on and on. The assumption that an effective conversation took place is so often wrong it’s laughable. More often, what took place was a monologue.
- Differing needs. Each of us has needs that we may or may not communicate to others. Even if we do communicate them those needs will change over time. If you are equity partners, what brought you together years ago may no longer be true for you today. Maybe today you have a need for more work/life balance than you did earlier on. Or you might want more responsibility or growth or compensation or anything else. The challenge is that over time our needs change, and the needs of others in the company also change. What brought you together may no longer exist. When an individual’s needs change and no longer match what others in the company want, or what the organization needs, it will become a problem.
- Poorly defined roles and responsibilities. More than just too many chiefs and not enough Indians, when roles and responsibilities are poorly defined it is a recipe for disaster. There is often a huge gap between what you expect versus what someone else believes. This is a setup for friction, which is frequently handled with poor communication only intensifying the problem.
- Having beliefs, yet not confirming them. You believe because you put someone in a leadership role they know what is expected and will perform to that standard. Your brother believes because you are brothers that you, as his partner, will understand the family problems he’s experiencing and allow him to take off as much time as needed. A partner believes that they don’t have to confer with you on their decisions, time off, or just about anything else. When we have beliefs and act on those beliefs we don’t take the time to ask questions and confirm with anyone else.
- No definition of accountability. Not only is there no clear definition of accountability and what it means, no one holds anyone to any level of accountability. Sometimes this happens because roles and responsibilities are not clearly defined. Other times, because we all want to avoid conflict, we say nothing. Bottom line is without accountability you have chaos and people running wild, doing what they want. This is not in the best interest of the relationship or the company.
- No plan. When everyone is running around doing what they think should be done, problems will arise. There is no possibility they won’t. If I believe we should be going west and my partner thinks we should be going northwest, and the senior leaders think we should be going north, while we are all believing we are doing what’s best, what we think is best may be in our own best interest but not the best interest of the company or others. Without a plan and direction, whatever anyone wants is what becomes the plan. And when we have differing views, conflicts will arise.
The bottom line is that no business relationship works well 100% of the time because humans are involved. However, many challenges happen that can be avoided or minimized if we take the time to be thoughtful and focus on what best serves the business rather than what best serves individuals.
© 2017 Incedo Group, LLC.
Business partnership can be advantageous as well as challenging. Find out the formula to successful partnerships in Finding the Fork in the Road.