The roots of conflict

The other day I received a call from Peter, his lawyer had referred him to me. He immediately started the conversation by explaining that he and his business partner had an escalating conflict which got really nasty. He sounded quite desperate and had no idea how this could be solved, dreading a lengthy and costly process through court. This is how the first contact with a client often evolves. Asking questions and listening to Peter, the most common roots of conflict came to the surface.

Many business start with 2,3 or4 founders having a great idea. Enthusiasm leads to setting up a legal entity and equity is evenly split between them. Although this is a lot like a business marriage, the partners tend to skip the courting time and the prenuptial agreements. Over the years I have seen a lot of business go sour because of a conflict between the founders or business partners. Most of the roots of these conflicts can be categorized in 3 main areas according to the research of Howard Markman.

• Power & Control

This is about money, distribution of shares, who is in the lead, who is taking decisions and about status and hierarchy, both formal and informal. Who is investing what in time and or money? Is this in balance with the stake of the partners? Valuations of the company are also in this category and a common source of difficult conversations.

• Respect & Recognition

One or some parties involved feel undervalued, not seen, not respected. The relation is drifting apart. Issues around commitment come up. In any relation people want to be seen and heard and valued for their contribution.

• Vision & Values

Opposites attract, but when the vision, goals and values are not aligned it becomes a source of frustration and irritation which lead to disputes over strategy. Before you know it, the focus of the companies development and growth is shifted to escalation of differences.

These categories are not exclusive, most often there is an overlap. In the Partner Scan and Partner Pact we identify the likely roots of conflict. By doing so and changing from difficult conversations to open communication and constructive conversations a lot of conflict can be prevented.

What happened with Peter? As the conflict had already escalated to a near legal battle, he convinced his business partner to try to solve their issues via mediation. All interests of both parties became clear to both sides. Differences in vision and values was the source of their dispute which deflated their respect for each other. It took a while before they opened up and started communicating again. We had a number of sessions including one-on-one, with both parties and some with the lawyers present. They reached an agreement in which they split the company in such a way that both could see a brighter future ahead. And when going into a new partnership, they will give me a call beforehand to set up a Partner Pact.