Small Business [HQ] - small business directory, business resources, business advice.
SEARCH THIS SITE
All Directory Resource Centre Products & Services

Successful Business Partnerships: How to Get Business Partners to Agree

Successful Business Partnerships: How to Get Business Partners to Agree

By: Eyes Wide Open

Three owners running one business can be a nightmare. However some companies are making it a success. The lessons emerging from their success provide very useful insights for any business where teams of 3 or more decision makers exist.

Opinions around the business community are divided as to whether or not partnerships are a good idea. Some people enjoy the control and autonomy gained from being a sole owner. Others value business partners who stimulate their thinking and action and share the burden of business.

From what we've seen, there is no doubt that if you can create a successful partnership then the whole can be far more powerful than the sum of the parts. However making that magic happen is a bit of a black art.

The Pain of Three
The old saying, "2's a company, 3's a headache" (okay so we've taken some poetic licence there) gets played out every day in Australian businesses. The likelihood of ineffective communication increases exponentially as you add more partners. The ripple effects of miscommunication between business partners can be far reaching.

Here are some examples of ripples we've seen recently in businesses.

  • Staff being given varying directions and tasks by the different 'bosses'.
  • Lack of agreement on business direction resulting in lack of growth.
  • Organisational politics, e.g. one 'boss' undermining the position and authority of another.
  • Heated discussions within earshot of staff feeding stress and rumours.
  • Mixed messages being sent to the marketplace because owners have different opinions of what business they are in.
  • Staff using different processes in the business based on which 'boss' they are working with at the time, e.g. "Joe's way of doing things" versus "Mike's way of doing things".
  • Major change initiatives stalled through lack of agreement.
  • People stepping on other people's toes resulting in defensiveness and obstructive behaviour.
    A case of too many cooks spoiling the broth?

Harnessing the Power of Three
We have identified 3 key ingredients to harnessing the power of partnerships. These are based on what we've seen work in business. While we are referring in this instance to owner/operators, these principles can be applied whenever you have decision-makers operating as a team. We have provided some real life examples to help you understand the importance and impact of each ingredient.

1. Clearly define your business strategy
Your business strategy is the 'hymn book' for your business. It enables everyone to be working harmoniously toward the same outcome. A simple, plain English, factual statement about what the business does, what you are out to achieve and how you will achieve it can provide enormous rewards for the business.

The challenge can sometimes be getting agreement on the content of that statement. All key parties responsible for delivering the business strategy need to be involved in an open and in-depth conversation about the business direction. Using an independent facilitator for these discussions can help ensure the conversation stays constructive and fair.

A HR consulting firm recently went through this process. The owners are three individuals who have come together to work as business. Developing their business strategy through facilitated, open discussion has enabled them to shift their mindset from operating as individuals to working together for a common goal.

2. Align your role with your passion
People who own a business often feel compelled to take on a Director role within the business. However, many people don't like management responsibility nor is it necessarily what they're good at. There are no rules saying that as an owner of the business you have to manage it. Someone does have to take on that role but it doesn't have to be you.

We saw a clear example of this in a manufacturing company, a family business where the current owners have grown up in the business. One of the owners had been in a sales role for many years and really enjoyed the work. In recent years he assumed the role of a General Manager and before long sales dropped off and job dissatisfaction set in. A change of tact was taken, the owner returned to the sales role, a General Manager was employed and the business is powering forward again.

People deliver an exceptional performance when allowed to work to their passion. They feel motivated and excited about their work. Furthermore, it is very easy for other people to respect someone who works in this way. While it is not compulsory for the owner to take on a management role it is absolutely vital that the owner set an outstanding example to the rest of the team. So play to your strengths, understand what you really enjoy about being in business and commit to being an exceptional performer in that role.

3. Clearly define, in writing, roles and responsibilities
The partners need to clearly mark their territories. Does that sound a bit primal? In some ways it is but it makes an enormous difference to the level of co-operation and respect in the team. Too often blurred boundaries result in heated discussions that don't need to exist.

A financial services company provided a good example of this. The legal terms of the partnership had been clearly defined. However the operational roles of each partner had only been loosely defined. As a result each partner was involved in ongoing discussions about every aspect of the business, regardless of whether or not they had skills in that area. It resulted in lengthy meetings and slow progress. It also resulted in a lot of tension as people offered opinions that were not always welcomed.

The simple process of defining roles and responsibilities removed all the excess, and often useless, communication. People now have the freedom to get on with their job. Role allocation was based on the each owner's skill set and preferences. As a result there is clearly more trust in each other's capabilities, boundaries are respected and opinions only offered when asked for. Greater productivity and a more harmonious workplace have emerged.

Learning from Others
Take a look at your own business and:

  • Conduct a quick internal survey of your team and see if anyone recognises the 'ripples' existing in your business
  • Determine points in your business where decision makers came together as a team
  • Examine how the '3 ingredients' are being applied in each situation. What can be improved?
 
 


 

Eyes Wide Open provides consulting support in marketing, business management, strategy and exit planning for small business in Australia.  They are based in Sydney and specialise in companies with up to 50 people. View their smallbusiness[HQ] listing here.
Important - Read This: This information is intended to provide general information only which may not be applicable to your particular circumstances.  You agree to access this information at your own risk and that First Point Media is not liable to you for the content of the information or any reliance by you on this information.