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50/50 Partnership Not Working Anymore - How to Resolve While Still Maintaining a Working Relationship

Partnerships are curious animals.  Two or more people start off with a great idea; decide there’s some synergistic benefits in working together; shake hands; and start off with the very best of intentions.  And then everyone lives happily ever after.  

In a handful of circumstances that fairy tale really does happen.  The operative word is “handful”.  In most cases, human nature takes over and all hell breaks loose.  Nasty arguments, harsh accusations, greed, and broken friendships or broken family relationships are far more common.

If you’re currently in a partnership that’s not going very well, you and your partner(s) might want to revitalize the relationship by reconstructing the partnership with these caveats in mind.  Here are some suggestions on how to re-energize the relationship.

  1. Review your Operating Agreement to see how you decided to handle conflicts should they arise.  

    Oh, wait.  You say you don’t have an operating agreement?  Well, that could be part of the challenge.  If a formal, legally binding operating agreement is too “unthinkable” because it seems to start things off assuming there will be problems – and, by the way, there will be – then consider taking the time (before the partnership begins is always better, but now may not be too late) to at least have thorough discussions about the critical investments you and others will be making with regard to your resources - people, time, and money.  You also need to reach agreement on who’s going to make the final calls on dividends, re-investments, research and development, etc., etc., etc.  If you’re in a 50/50, get out of it from a decision making standpoint.  Not even the ancient Greeks and Romans could figure out how to share power.

  2. Separate salaries from profits.

    You and your partners probably spend different amounts of time and energy in/on the business.  Invariably someone puts in less time that others and still expects to pull the same amount out of the business.  In the beginning, everyone usually takes the “share and share alike” approach.  That’s good theory.  It’s just that it usually doesn’t work; and that’s one of the most common reasons for partnerships to teeter on the brink of dissolution.  If everyone thinks the partnership is worth saving, bring in an outside arbitrator or mediator to help resolve conflicts over resources.  A partner/financial investor may have money coming from the profits; but that doesn’t mean someone who puts in no time has a salary coming from the business. 

  3. As businesses develop, someone usually forgets to check “pride” at the door. 

    So, one partner assumes the role of Charles Atlas and takes credit for everything that’s working well and faults others for what is not. The offender usually begins to believe the “hype” surrounding this fictitious role, spreads it publicly, and greatly offends the remaining partner(s).  If this is happening in your organization, then an intervention needs to take place.  That may include in better defining roles and responsibilities, titles, and peer reviews.  If there are only two partners involved, created an advisory board willing to take on the task of “reviewing” the partners’ performance and contributions to the business. 

  4. Give each other the benefit of the doubt, at least until you know better.  

    Assume that other partners’ behavior begins with good intentions. Remember that the people you’re with are the people you chose, and you probably had a good reason for choosing them in the beginning.  Work hard at remembering what qualities and characteristics drew you to them, and lock on to those rather than to the current behaviors that are driving you up the wall. 

  5. Bring in someone from the outside to help implement steps 1 through 4. 

    You and your partner(s) are probably too close to the situation to maintain the objectivity required for respectful, dignified, and successful conflict resolution.  Also be prepared to create and implement the documents you should have had in place even before Day One.  


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