Partner Wars

The landmines that can devastate your business

Are you at war with your partner? If so, that ongoing battle is sabotaging your company’s business objectives. More important, it’s causing collateral damage that could be avoided. With each attempt to prove you are right, you may think that you’ve one-upped your partner with a laser guided missile. In fact, you may as well have pointed the missile at yourself and your company.

The fight you’re having with your partner might not be nuclear &mdash it might just be troubling or annoying. It might even be entertaining at times. It certainly provides good conversation at the dinner table: “You’ll never guess what my partner said today!” Chances are you also talk about it with your friends and think about it when you would otherwise be enjoying yourself.

If the costs of war with your partner ended at the dinner table or the night out with your friends, it would not be a matter of grave concern to your business. The truth, as the voice inside your head is telling you, is that your business is suffering while the dispute goes on and on.

When partners become embroiled in conflict, the fighting between them may not be obvious to the outside world. But it often takes a heavy toll on the inside world of the company. The casualties may be multiple — damaged staff morale, diminished share value, explosive legal fees, wasted resources and lost opportunities.

Let’s examine the very real damage that partner wars could be causing your business

We’ve all witnessed the destructive nature of public wars between partners:

Steve Jobs and John Scully
Paul McCartney and John Lennon
Henry Ford and Lee Iococca
The Balducci Family

Even potential partners like the Winklevoss twins can wage war that continues to cost Mark Zuckerberg and his FaceBook empire millions of dollars in revenue, and countless hours in legal services and fees.

Depleting the Arsenal

Time — If time is money, then war with your partner is a high-ticket item. In addition to the time spent arguing, partnership disputes usually involve all kinds of “time games.” One partner may:

• Hold up the other partner’s projects
• Withhold his or her signature on time-sensitive documents
• Keep staff waiting on decisions, deadlines, strategic plans
• Fail to show up for key appointments, meetings, company announcements.

Reduced productivity — In addition to lost time, partnership wars result in misdirected focus and reduced productivity. Because partners’ actions set the tone for the company, anger, frustration and arguing between you and your partner quickly travel down to your staff. Productivity can easily be cut in half due to emotional inefficiency caused by employees discussing the dispute, avoiding one or both partners, or fighting with each other.

Health problems — A war with your business partner doesn’t just assault the bank account. It wreaks havoc on your (and your employees’) health. Studies in the U.S., Canada and the U.K. make direct links between conflict related stress and absenteeism. Conflict related stress results in a greater incidence of substance abuse, heart problems, back problems, cancers, mental health problems and workplace injuries.

Opportunity costs — Can you put a price on lost initiatives, stalled business plans, or accounts you fail to pursue because you’re too absorbed in a power struggle with your business partner?

Actual legal fees

“I don’t care what it costs — I’m not going to let my partner get away with this.” In the heat of the fight, you may truly believe that, “It’s not about the money, it’s the principle.” Your principles will be tested when your company has to pay for them.

Lawyers and other professionals can be of assistance in amicably resolving your dispute without breaking the bank. On the other hand, you may want to win a battle rather than reach an accord. This is usually when individual partners hire separate lawyers. You may hire a legal gladiator in order to prove yourself right, insure that you’re fairly heard, collect money you believe you’re rightfully owed, punish your partner, or just for the thrill of it. If so, get ready to pay for the ride.

Law firms generally charge hourly rates, which vary widely, usually between $200 and $750 an hour. The more experienced and savvy a lawyer is, the more you can expect to pay per hour. The thornier your dispute, the more help you will require. How much will the fees be? We might be talking the equivalent of a vacation, a car or a new house.

Who will a court ultimately decide has the stronger position? It will depend on the law, the cases interpreting the law, the predisposition of the judges, who said what to whom, whether or not it was in writing, the clarity of the writing, whether or not the wrong doing was too long ago, or justified, etc., etc. The list of variables is nearly endless and often unpredictable.

The Problem Festers

Even if you win a particular battle against your partner, a silent war may continue. Aside from all the other costs of a partner war — time, money, productivity, health, business opportunities, and morale — there is invariably another significant casualty: your business relationship.

Most partnership wars mask unresolved differences between the partners that neither a law suit nor dissolution of the partnership can resolve. Your disagreement is often not about what you or your partner think it is. While you may be arguing over company policy or sales projections, the true rift concerns less tangible forces.

You may harbor resentment because you think you carry a heavier workload, bring in more business, or fix more problems than your partner. You may be tired of your partner forcing his or her opinions on you. Or you may want to be paid for handling your partner’s difficult personality.

The Good News

If you are embroiled in a fight with your business partner, it may seem as if there’s no way out. Each of you claim the moral high ground and you’re both certain that you’re right. Resolution may appear unattainable because you’ve staked out mutually exclusive positions.

Nevertheless, precisely because each partner feels justified, and because you have certain goals in common, partner disputes are often resolvable. Why? Because you both want the business to succeed.

Partners who are having trouble communicating effectively can call on the assistance of mediators, attorneys, counselors and other professionals committed to resolving differences without waging a full-fledged war. These dispute resolution experts have experience in addressing each partner’s complaints without damaging or destroying their greatest shared asset — the company. They know how to get to the heart of the power struggle without resorting to arms.

In our experience, partners often appreciate assistance in understanding not only the underlying nature of their dispute, but also in discovering paths to resolving it in a mutually acceptable manner. When partners reach a solution they are happy with, the business is the winner.

Article written by Kathi Elster, Katherine Crowley and Lewis Tesser.