Business tips: How to prevent conflicts with your partners

The ideal number of owners is odd, and three is too many, they say.

This leaves us with one. However, there are many advantages to not running a business all on your lonesome. Statistics might say that two-thirds of failed startups staggered to a stop because of disagreements between owners. Yet, there are ways to avoid such a fate. Experienced consultants from the South Moravian Innovation Centre (www.jic.cz) offer two key pieces of advice: prevention and constructive space for conflict.

View co-ownership as a marriage

Being a co-owner brings great obligations and responsibilities. It’s necessary that you can cooperate, for better or for worse. And just as it’s not wise to propose to someone strange and untested, you should also choose your co-founders well. If this venture doesn’t work out between you, your child – the company – will suffer the most.

Being different is good

There is strength in diversity. Experience suggests that if the partners are too much alike, they might get along well, but at the same time, the development of the company might be put on hold. It’s better if each of you brings a different piece of experience and expertise to the table. Someone invents new ideas and solutions. Someone’s good at introducing structure to ideas. Someone motivates others well, someone else brings new incentives and information. Each approach represents advantages and potential pitfalls, so it’s very useful to complement each other.

Get to know each other’s motivation

Not respecting your partner’s personal motivation is a common source of tension in a business partnership.  The problem starts with not knowing your own motivation. Identify it!

Ask yourself what it is that attracts you to this project, and why you want to turn it into business. Explore these questions with your partner, get to know their answers and their point of view.

Is the primary motivation for you to improve the industry? Do you want to become famous and be recognized? Or are you after financial independence or passive income, to win freedom in your future decision-making? Do you crave the opportunity to create, with people who are close to you? The options are many. Be honest, to yourself and to your partners. Only then you can respect your individual motivations, give space to their fulfillment and avoid problems further down the road.

Personal motivations might slightly differ, but they should result in a common vision.

Ask yourselves this question: What’s our goal – the target status for our company to reach, and what should be changed (in the world, around you) thanks to our business? Visions closely follow the personal motivations of companions and should be in harmony. Do you want to have a small business where you all know each other by name and spend your free time together? Or is the goal for you to build a large corporation with thousands of employees and have a global reach? How do you want your customers, partners, or investors to perceive you? What do you want them to say about you in a pub over a beer?

The second thing on which you need to largely agree, is the values on which your business and cooperation stand. This defines the way you operate. It’s not enough to hang framed graphics of “corporate values” in the office. On the contrary, the discussion that leads to their definition is the important part. Talk about how your values will manifest in the individual areas of your day-to-day business.

For example, if you agree that freedom and creativity are important to you, your posted job description will probably look different than if you give priority to efficiency and clear processes. If you determine that transparency and open communication are important to you, you need to determine how this will be reflected in your customer support communication. What do you want to tell the public about yourself; which decisions and economic results do you want to make public? How will you communicate mistakes, salary levels, budgets, or managerial decisions with your team?

Discuss as many of these with your partner at the beginning of your cooperation. Equally importantly, return to these values once in a while, and don’t be surprised if some of them change over time.

Assign individual levels of responsibility

Determine the level of responsibility in individual areas of the company into four categories for each person – to decide, to influence, to be informed and to be not involved.

• To decide means to take full responsibility.
• To influence means to have the option to discuss issues in the area.
• To be informed means no responsibility just awareness of the area.
• To be not involved means for the issues in the area to be happening without my intervention or attention.

First, write down together all the areas that you foresee in the business (e.g. financial planning, recruitment, production capacity management, etc.), as detailed as you find useful. Then establish the degree of responsibility in each of them for individual partners. Discuss any gaps or overlaps. The main responsibility (to decide) should always be carried only by one person.

Check your balance, regularly

Remember that you always know about 100% of the work that you yourself have done, but only about 20% of the work of others. This can bring a false feeling of imbalance, that someone is working more and someone less.

Additionally, the shares that you split at the start may no longer correspond to reality – or you might feel like it. So, once in a while (Miroslav, the author of the original article, recommends about 1 per year, and at the beginning even more often) to go through a balance check.

At this owner’s meeting, where you don’t deal with the day-to-day agenda, everyone will answer three questions:

• What do I bring to the company?
• What do I see you bringing to the company?
• How do I currently perceive the division of responsibility, and the ratio of dividends?

Conflicts will come

“To be an adult in a relationship is not to be conflict-free. It is to resolve conflicts mindfully.” (David Richo)

The goal isn’t to prevent conflicts between partners. On the contrary, no conflicts in such an intense relationship is often a symptom of festering problems. It’s necessary to give conflicts the right space and constructive form. Then, they can become the means toward a positive shift.

Communication is one of the key entrepreneurial skills that need to be developed and cultivated. For a start, study and follow the principles of non-violent communication, which helps to find mutual understanding and solutions acceptable to all parties.

The art of giving feedback constructively is a very useful skill to adapt, too. We’d need more space than this article to explain this skill in full, but let’s remember the main principles: high-quality feedback should be neither praise nor criticism; it should come at the right time and in the right place, and in a specific form. First of all, it should have a clear goal – to help the recipient to reveal his blind spots and improve the relationship with the one who gives the feedback.

This text is based on a Czech article written by Miroslav Londýn, see original at jic.cz.