Conflict in Business Partnerships

If you have set up a business and never been in conflict with your partners at any one time, consider yourself an angel. Business conflict is a reality and happens to be the norm rather than the exception. The late Steve Jobs was at one time ejected from Apple due to conflict with his partners.

Some cases include;

• Mark Zuckerberg and Eduardo Saverin. They both founded Facebook but the latter was eventually ejected for reasons we shall cover later in this article. Saverin’s 34% shareholding was cut down to a paltry 5%.

• Mukesh Ambani and Anil Ambani. These two are blood brothers whose father founded Reliance Industries, a company that was at the helm of business in India. Upon his death, they bickered and had to go their separate ways.

• Jamie Dimon and Sandy Weill. These two partners were behind the founding of Citigroup. While it seemed obvious that Dimon would succeed Weill as CEO eventually, they parted ways due to irreconcilable differences.

• Muwema and Mugerwa Advocates & Solicitors wound up in 2014 after four lead partners ie Herbert Kiggundu, Siraj Ali, Brian Kabayiza and Terence Kavuma parted ways with Fred Muwema.

What tends to cause business conflict?

Lack of a uniform vision. As human beings, we all have different insights into what the future should hold. Even when we agree that working together is the way to go, the end goal tends to individually differ.

In a business that involves partners, it is crucial that they all gravitate their minds towards a common vision or else strife will set in.

There cases where a partner may be working towards building the business to become an international brand while his colleagues are content with the same business merely being profitable and guaranteeing them a regular income.

Lack of transparency. Business partnerships are like marriages. Trust is key if the fabric is to be maintained as one. Whenever a partner gives others a reason to doubt his/her intentions, conflict is likely to be sparked off. Matters are worsened when arrogance and a feeling of self importance creep into the equation. This is what led to the dissolution of the Muwema and Mugerwa Advocates & Solicitors.

Financial Windfall. When businesses are just kicking off, the bootstrapping is real. Partners forego a lot just to stay afloat with the hope that things will get better. Each day crawls along at a pace slower than that of a snail. The uncertainty of paying salaries by the end of the month or rent for the office can sap all the creative energy out of the partners. However, when lady luck smiles upon the business and a windfall deal comes through, problems tend to arise. Like starving prisoners suddenly presented with a buffet, the partners tend to have different opinions on how that money should be spent. In the process, differences emerge with some proving to be irreconcilable.

This reminds me of a group of youthful innovators from Uganda that came up with a very good solution for the Health sector. They went ahead after so much struggle to win a US$ 50,000 award from Microsoft. It is such a shame to note that this money led to their separation. Today, their once globally touted innovation seems to be no more.

Another case I wrote about here involved two partners who set up a poultry project and took on a bank loan for the same. When the money was released, one of the partners chose to buy a top of the range SUV and was never seen again in the business venture.

Unclear responsibilities. Pursuing business is usually driven by passion. Entrepreneurial minds are quick at identifying opportunities and pursuing them. In most cases, the partners rely on the core skills of each other. One may be a marketer, the other an accountant, and others probably programmers, economists, researchers etc.

They kick off the business by working in a communal manner with little or no defined boundaries of operation. However, as the business grows, some may start to exercise authority in their areas of competence to the chagrin of others. One of the challenges at this point is who becomes the CEO in a team of partners that had always looked at each other as equals. Before long, conflict is likely to crop up if not addressed swiftly.

Skewed work burden. In partnerships, you always have some people who work much harder than others. This tends to create grumbling among those putting in the effort because when it comes to sharing the returns, even the lazy guys walk away with something. This is the very reason Mark Zuckerburg parted ways with Eduardo Saverin. While Facebook was being moulded into the global software giant it is today under the stewardship of Zuckerburg, Saverin was lounging away elsewhere adding nothing to the hustle.

Values of Partners. Andrew Rugasira of Good African Coffee once told me that, “the best partners are people you can easily entrust to take care of your children when you die.” Raising children is all about imparting values and this is essentially what he meant. If a partner has different value sets from yours, the likelihood of conflict is very high. Imagine having partners whose standard set of beliefs are governed by bribery and cheating yet you are not of the same fold. For cases of Christians who pay tithe, imagine having a fight with a partner over the need to pay 10% of the business revenue to church as tithe.

This is why it is crucial to seriously think through the idea of doing business with partners before engaging them. In this previous article, I expound more on this.

Too many cooks. In the first business venture I went into straight out of university, we were not less than 8 directors. Your guess is as good as mine about what happened next. Due to the large numbers, we had challenges on how to steer the business and this was also littered with trust issues among others. The business eventually folded. Too many cooks in the kitchen spoil the broth.

Personalisation of Business Opportunities. In business partnerships, some partners have the tendency of wanting to “own” customers. The talk of; This is my client or This is my deal is very counter productive and can easily discourage the non client facing partners who are equally working hard behind the scenes.

Stealing Business. There are tendencies of greed that usually crop up in partnerships. As the business grows, some partners steer business opportunities away from the company with the overall aim of laying claim to all the anticipated revenue. Once discovered by other partners, conflict is inevitable.

Family members. Starting businesses usually have a challenge of affording well paid professionals. This tends to lead partners into involving family members who can offer a service for a modest remuneration. Problems arise when these family members start forming alliances with selected partners to demean or undermine the authority of other partners. Strife is what follows next.

Poor Communication. Communication is key for any relationship to work. In some partnerships, you have the active partners (involved in the daily running of the business) as well as the quasi partners (silent background partners who usually provide financing). For these two groups to work well, there is a need for a decent steady flow of information with the aim of keeping all abreast. Once this breaks down, trust becomes a challenge and rumours or gossip take centre stage.

In all this though, it is always important to remember what Wayne Dyer once said, “Conflict cannot survive without your participation.”

What do you do when conflict sets in?

Conflict is drama, and how people deal with conflict shows you the kind of people they are. – Stephen Moyer

Face off. When faced with conflict, it is important for the parties concerned to face off directly. Failure to do so will instead allow rumors, suspicion and gossip to thrive thereby escalating what could very easily have been solvable.

Get advice. As individuals we always have people we can reach out to for advice. It helps to share your problem or challenge with someone you trust to give you sound advice. They could very easily give you the kind of ideas needed to turn around the circumstance.

Mediation. “Mediation is one of the most effective tools of non violence. It can turn parties away from conflict, towards compromise,” Miroslav Lajcak.

There are numerous cases where mediators have saved the day. If as partners you cant see eye to eye, before parting ways, it helps to engage a mediator. Maybe the matters at hand could be easily solvable if all the parties are willing to sit down and talk. After over ten years of being against each other, the Ambani brothers seem to be making up.

Dissolve. If everything else fails, then you have one option left, to dissolve the engagement. This should come as a last resort though. Sometimes there is too much you may have attained in that partnership that you aren’t ready to see it go.

Are you embroiled in partnership squabbles? Take heart, you are not unlucky, it is something common in business and all you have to do is make an effort to turn the situation around for the better. Feel free to share your experiences by commenting on this article..

James Wire is a Small Business and Technology Consultant

Blog: wirejames.com

Twitter: @wirejames

Email: lunghabo (at) gmail (dot) com