Member Peter Koshland Speaks: Share Fears, Empathize and Negotiate

The Challenge:

The case at hand was brought by an executive in a fifty-fifty partnership. While the partners’ relationship was good at present, he felt the company’s progress was being hamstrung by the lack of a singular decision maker. He wanted to take on that role, but felt unsure how to do so.

If you were in this situation, what would you do?

If I were in your position, I’d open an honest dialogue with my business partner about the pitfalls of equal ownership. I’d emphasize my desire to keep a good relationship and healthy business. The key is figuring out what my partner needs in order to willfully give me that precious one percent.

You are not alone in this quandary. In fact, the issue of fifty-fifty ownerships is one that many in this Alliance group can resonate with. These types of structures are almost certain to be fraught and likely to fail. Why? What starts as a balanced relationship nearly always becomes unbalanced, with one party contributing more. This creates a power vacuum, as the more involved partner cannot make strategic decisions without full sign-off from the weaker partner. The result is strategic sclerosis.

The key to the situation is broaching the subject before frustration creeps in. If I were in your shoes, I’d take advantage of the good relationship I have with my partner and share with him this revelation that equal partnerships make for bad business. I’d tell him I want to avoid a negative outcome, profess my desire to control the company strategically and then see what he would desire to relinquish control. Only through such honest dialogue do most situations like this resolve to the benefit of both parties. In order to get, be prepared to give.