Business Partnerships, Communication, & Dispute Resolution

Business Partnerships, Communication, & Dispute Resolution

In previous posts, I talked about some issues that potential partners should be discussing when it comes to the planning stages of entering into a partnership.

Some of those things included making sure the partners are compatible and ensuring everyone has expressed their expectations, and that those expectations are understood by all in terms of management, finances, and goals. On top of that, we talked about having an exit strategy. What happens if everything goes really well, fair, or terrible?

Today’s post is a little bit different. I have been involved in a number of business disputes both as an attorney on the outside, as a business partner on the inside, and as a disinterested observer. Almost invariably, the difficulties that partners face most often are related to communication.

The Role of Communication in Partnerships

Most communication problems revolve around expectations or business decisions. People make assumptions that other partner(s) are aware of everything that is going on within the business. Healthy partnerships require active listening, empathy, and understanding various perspectives that inspire actions taken in the business.

Some of those matters can be addressed by having a better idea of where your partner is coming from, whether that may be a past experience, expectation, or personal goal. A partner may also be inspired by an external force, from health pressures to family pressures, which often leaves an impact on business operations.

You have to have an understanding of where each partner stands and where they are coming from. If you are dealing with one partner, your life is complicated. If you are dealing with more than one partner, your life is really complicated.

Treating a Partnership as a Relationship

If you go to counseling or see a therapist who is an expert in relationships, they often tell you that one of the best ways to really screw up a relationship is talking in terms of you. For example, you could say to your business partner that you are doing x or you’re not doing x. It immediately puts someone on the defensive. If you speak in terms of I think, I feel, or I am seeing this – what am I missing, you can help lead to a better dialogue. Ultimately, for partners to succeed they need to have a two-way dialogue without accusatory tones and an understanding of where the conversation is going.

Inevitably, disputes are going to arise between the partners, whether it is a small scale “I disagree with that course of action” or a large scale “are you kidding me we are going out of business if you do that,” a dispute will arise. One of the more important factors to think about in the partnership agreement is a dispute resolution mechanism that encourages the parties to resolve the dispute at the lowest level possible. Obviously day-to-day disputes should be resolved by the parties without having to involve outside professionals, but sometimes you may need to.

One interesting scenario that came up recently was that two partners were bickering and I offhandedly commented that they could go see a couple’s counselor. To me, it sounded like their problems were in communication, not where they wanted the business to go, but how they wanted to get there. At first, I was joking about it but then I realized it wasn’t a bad idea at all, and I recommended it to them. I honestly do not know if they took my recommendation as things seem as though they were resolved. But, it is not a bad idea to bring in someone who is a professional relationship expert to help resolve disputes by improving communication skills, rather than a mediator or arbitrator, certainly not a judge if you can avoid it.

Think about alternative ways to resolve your crisis by having someone who is not invested in the dispute, but invested in the parties. Keep that in mind if you’re having communication problems with your partner it may be not so much about the business so much as it is about communication. Maybe a couple’s counselor is not such a bad idea. I do want to encourage parties to think about how we resolve a dispute that could come up so that it does not bring the business down.

In the meantime, I recommend that you think about 1) your communication skills, 2) your active listening, and 3) ways to resolve your dispute at the lowest level possible.

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