When business partnerships form, positive feelings like trust and respect are high, and there’s a general agreement regarding roles and direction. However, you may later find that trust wanes. Maybe your partner seems to be focusing more on their own interests rather than what’s best for the business, or you find yourself simmering with frustration over feeling disrespected in large or small ways. Maybe you’re feeling anxious as you discover that you and your partner seem to have different visions of the company’s direction, your roles, or compensation.
You’ve thought about splitting up, but you don’t want to “cut and run” if this problem could be resolved with some frank discussions, coaching, or other ways of strengthening communication and realigning the partnership. On the other hand, you don’t just want to keep banging your head against the wall if you and your partner really do have incompatible working styles or long-term visions for the company.
Try this 3-phase “stair step” approach to solving partnership problems. Caveat: Every partnership is different. You need to do what’s best for you.
Phase 1: Talk Openly
Prepare for a productive talk by listing specific examples (i.e. things that make you feel disrespected, how you’d like to handle compensation or split responsibilities). Make a paper list rather than a mental list to increase organization and accountability.
Invite your partner to talk in a way that sets the stage for success. (i.e. “Sara, are you available to talk sometime this week? There are some things that I’d like to share with you and get your feedback on, so I want to find a time that works well for your schedule.”) If you’re concerned about your partner’s ability to converse without devolving into “mud slinging,” or even about your own ability to do so, consider offering to have a coach present.
At the meeting, start by thanking your partner for meeting, then talk openly about your list. Try to agree on standards of how you will treat each other, how you will be compensated, or whatever the point of contention is. You may not reach an agreement at the first meeting, so feel free to conclude by saying that it feels good to “start the conversation” and suggest meeting again in the next few days once you’ve both had time to consider today’s talk.
Once you reach an agreement about issues, suggest meeting regularly (every week or every month) to build accountability and keep communication open.
Phase 2: Get Support
Talk privately to a business lawyer to learn about your potential exit options or legal leverage, and review your contract’s exit clauses. Hopefully, you’ll never have to use this information, but it’s still good to know the parameters just in case you discover you’re at an impasse. It’s like insurance: You hope you’ll never use it, but having it helps you feel secure. Sometimes learning about exits also motivates people to make things work.
See if anyone in your network has gone through a similar struggle and would be willing to share with you what helped, and what they wish they had done differently. Obviously, choose someone you trust and have them confirm they will keep things confidential.
Ask your partner if they feel the partnership is working, and share that you do not. Emphasize that you want to create a new dynamic that works for both of you (only say this if this is true — if it is not true, the skip to Phase 3). Insist on a shared coach to help you two get on (and stay on!) the same page, or at least to help you understand if an agreement is possible.
Phase 3: Take Action
If you have genuinely invested your best effort but remain at an impasse and feel it’s time to dissolve the partnership:
Speak to a lawyer again before telling your partner. You reached this point because you and your partner were unable to get on the same page, so it doesn’t make sense to assume that this person will now be willing and able to share and prioritize your view of mutual best interests. Give yourself the benefit of knowledge and wisdom from a business lawyer who has seen similar situations. Their input may shape when and how you present your new view of the soon-to-be-former partnership.
Decide on your ideal breakup outcome. Write it down. Next, select which parts of it are “must haves,” “nice to haves” and “can live without” items. It behooves you to consider this in advance and have a reference point if negotiations get hectic.
Choose the best way to communicate your decision. This will be different for every partnership, but it’s a lot like having a “breakup conversation.” Many people choose restaurants because it prevents (or at least discourages) the person from becoming explosive or hysterical (if that’s a concern). Others prefer meeting at the office, but it can be difficult to have a productive conversation about splitting up in the very environment where much of the difficulty that engendered the split has occurred.
Consult your lawyer for next steps after the conversation. Do this whether it seems necessary or not. If you draft a separation agreement, have the lawyer read it before you present it. Similarly, don’t sign an agreement without your lawyer’s input. Some people are afraid lawyers will make things expensive and ugly. This is true only if the people paying the lawyers allow that to happen. Not getting legal advice can also prove to be an expensive mistake. You can get a lawyer’s opinion and disregard it if it seems “over the top,” but you’ll likely sleep better knowing you’ve consulted an attorney to ensure you’re not overlooking anything important.
Remember: These are just ideas I have seen help others. Even if they serve merely as a jumping off point to stimulate other ideas, consider it a success that you are starting to organize your thoughts. If you have questions or additional ideas, please feel free to share them with me!