Four Keys to Making Your Partnership Work
November 4, 2014
by Beverly Flaxington
Chilton Capital's REIT Composite was up 6.1% last month, compared to the MSCI U.S. REIT Index, which gained 4.4%. Year to date, Chilton is up 6.3% net and 6.5% gross, compared to the index's 8.8% return. The firm met virtually with almost 40 real estate investment trusts last month and released the highlights of those Read More
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I often come across excellent resources in our industry with particular strengths. Lisette Smith and her partner, Tanya Rapacz, of The Partnership Resource are experts at helping partners work together more effectively. For this week’s column, I asked them to respond to questions from readers struggling with partnership issues.
My partner and I merged our practices about a year ago. It seemed like a great idea that would take us to the next level, but I’ve become frustrated with some of his ideas and work habits. We still get along but the tension is growing. I’m starting to think this merger was a mistake.
Partnership conflict is inevitable. It is important to be proactive when you feel tension. Here are some ways to make your partnership stronger, more resilient and better able to conquer the challenges of building a successful practice.
- Make communication a priority: When partnerships are in conflict, ineffective communication is pervasive. For partners who have been in business together for a long time, familiarity can reduce active listening. As co-founders, you might allow other issues to take priority over discussing the partnership. One easy remedy is to set regular meetings. With remote offices, video conferencing is a best practice. Video, as opposed to a conference call, reassures others that they have your attention and allows for critical nonverbal communication. During these meetings, have an agenda but also allow time for open discussion. Use technology/productivity tools to provide updates in addition to less formal interactions.
- Perform behavior/motivational assessments: Psychometric assessment tools are a great way to map out where partners have complementary skills, behaviors and motivations. These tools aren’t perfect, but at a minimum they can provide the basis for discussions of issues and expectations that may otherwise be hard to bring up or articulate. Mapping partners together can make overlaps and gaps in communication style visible. Partners often feel upset when they have found themselves in a role by default. Drilling down traits with an assessment tool can help define the best and most effective roles that suit each partner. For example, your partner may need lots of research on a topic before discussing it and may react badly when approached with important issues without time to prepare. A motivational assessment would reveal that.
- Document how you’ll work together as partners: So much is discussed, especially in the start-up phase, beyond what ends up in your Operating Agreement. Write down what was decided in a “Partnership Constitution.” You can retain some flexibility, but be explicit about expectations, decision-making process and responsibilities. Be sure to define potentially ambiguous terms. Issues like time spent on outside projects, charitable activities, hiring practices, and implementing decisions can generate considerable conflict if not well-defined. This document assures that your visions–of your partnership as well as your business–align.
- Resolve conflicts directly: Social scientists like Freidrich Glasl have demonstrated the predictability of social conflicts. Specifically, partners should be sensitive about discussing partnership matters outside of the partnership. Resist the urge to involve allies or build coalitions; this is often the fast track to more entrenched conflict. Instead, bring in someone you all see as objective, a trained mediator or facilitator, to help you communicate directly. This type of “couples therapy” can help business partners improve their relationship so that the focus can return to clients and the business.
Great partnerships are invaluable to building a sustainable practice. Higher-growth firms are much more likely to have partners at the helm. While there are clear benefits to being in a partnership, it is important to be prepared for the added complexity and to take the necessary steps to keep your relationship strong and resilient.
The Partnership Resource works with business partners to resolve conflicts that affect the management, growth and value of their business from formation to succession. They serve as the leading resource for the best research and ideas on all aspects of business partnerships.
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