In life, we were meant to live and operate in conjunction with others just like we do in business partnerships. While being a ‘Lone Wolf’ works for some people it is not necessarily a natural instinct, especially on the journey of business where we are faced with obstacles and challenges on the bumpy roller coaster we call entrepreneurship and business partnerships. Hence, why you see so many people connect with others to work on a project or start a business, or to move forward with the expansion of a company. It is the comfort in knowing there are other people around for the journey. But why, like marriage, do so many of these partnerships and relationships crumble over time?
Business Partnerships Are Started for the Wrong Reasons
Often these relationships were started for the wrong reasons. People come together out of need; someone needs a job, someone needs an investor, someone needs some help with a project. Someone needs resources that another person can provide even thought there may be a lack of compatibility, vision, work styles, or communication styles. Many of these relationships quickly deteriorate, as it was more of a barter exchange between the two people as opposed to a collaborative, empowering effort.
Lack of Execution
The second reason we see a lot of these relationships fail is a lack of execution. This really stems from two areas; the first being the personality traits necessary to be an executor, to be an integrator in the business. The other reason we see this happen so often is a lack of any clear plan that the parties have agreed upon. Without a strategic plan, a playbook that all the members can operate from, it is hard to create a winning team.
Another area that is one of the most common issues any relationship faces, is communication. This takes on multiple forms. The first is education, as everyone learns a little differently. When you have multiple people operating in a business, they may learn with different styles, and while something may work for one of the partners it does not always work for the other. The other thing you are going to find is that people have different communication styles; whether they are internal or external, whether they are trusting or lack trust, whether they operate out of fear or some other debilitating emotions. Quite often the ability to communicate authentically and strategically can be the demise of any great partnership.
Falling Prey to Greed and Ego
The last and certainly not least issue so often found has to do with the seven deadly sins. So often greed or ego creeps into a relationship, and one of the partners will often take a position, whether right or wrong, that leads to an unresolvable issue for which the partnership can no longer move forward and the business ultimately will fail.
When a business is started we do not think that anything can ever go wrong. It is blissful joy where the next step is world domination. So often I have entrepreneurs, some in business partnerships, and emerging companies walk into my office stating that they need some type of documentation for their business. It is these documents, corporate governance documents, that are so important for outlining how a relationship is handled during the unwinding period. That is why it is so important to take the time to craft these at the beginning when there seems to be nothing that can go wrong.
To avoid the pitfalls of lack of execution, communication, and greed, having a legal document that outlines how each segment of the business is to be run, and terminated, is the best way to go!