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Practice Management > Building Your Business

3 Reasons Business Partnerships Fail

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One of the most critical decisions for advisory firm owners is to understand is how to work with business partners.

Partnerships tend to focus on the technical (think: numbers) aspects of the arrangement — but rarely or never address its emotional components.

The trouble is that the emotional side of partnership is where expectations are created, and the success or failure of a partnership often is made.

I learned this from an undergraduate professor while earning my family studies and human services degree:  “Every relationship ends where it begins.”

It means, any expectation you set at the beginning of and throughout a relationship that goes unmet and/or unspoken will ultimately be the undoing of that relationship.

Here we’ll look at what makes partnerships work — and what doesn’t.

What Can Go Wrong

Fuzzy expectations can hurt an otherwise good partnership and lead to these reactions on the part of the business partners:

1. The partnership becomes rushed and pushed.

When our expectations aren’t being met, we try to push the other person in a relationship toward our position. The problem is that by pushing we break the other person’s trust.

If someone pushes you to do something you don’t want to do, it creates stress. When a relationship is built on stress, it can’t survive.

2. The partners become defensive.

When your vision for a partnership isn’t met, it’s easy to become defensive about what you want instead of engaging openly.

Digging in your heels, though, won’t make a partnership any better. There is no worse partner than one who thinks they know everything.

3. The partner become disrespectful and personal.

Much like any other relationship, partnerships won’t survive with personal attacks and disrespect. Instead of focusing on the work that needs to be done, frustration makes it easier to fall into name calling and make “always/never” statements about the other person.

In the pandemic-fueled world we live in, it’s easier than ever to become frustrated with each other, so we need to be intentional about creating better relationships. Here are several ways to improve a partnership during stressful times:

4 Ways to Create Successful Partnerships

Successful relationships are primarily built through open, honest, and consistent communication. That can be seen in these four ways:

1. Learn to deal with truth. You need to be able to handle the truth whether it’s positive or negative. When you’re a 100% owner, you can hide behind that power, but not when ownership is shared. Everyone has a truth, and the best partnerships are willing to hear it.

2. Stay committed to your organization’s overall vision. Everyone has a vision. When you are solo, you don’t have to state your vision because you only have to take care of yourself. In a partnership, though, everyone has to be aligned on vision.

If you have partnership issues, assuming you can handle the truth, seek to align your self-interest visions to a collective and collaborative firm vision.

3. See things as they are. If you act like you know what the future holds, you’ll break trust — immediately —because no one truly knows. Thinking you know everything is kindergarten leadership; being open to learning each day is true leadership. No one knows everything until you know you don’t know everything.

4. Be open and kind.

Kindness, or a lack of it, will quickly permeate a culture. If you want a partnership to work, you have to prioritize making others feel valued, even when you disagree.

No great partnership agrees on everything and no great partnership was built without some level of give and take. Be kind and your partners will be grateful instead of resentful.

We are living in a period of incredibly high stress. The pandemic has created tension, and disagreements about the presidential election still abound.

As a partner, remember that the way you treat other partners isn’t simply about the work they do each day and how much money you each get out of the deal. You have to value their contributions and openly communicate where your firm is today, and what actions you all are taking to make the firm successful.

The only way to do that is to communicate with honesty, kindness, and to be open about your expectations for everyone. And to do that begins with being a great partner to yourself.

Don’t rush things when you don’t need to. Respect yourself and don’t take your mistakes too personally. Instead, deal with and challenge your own truths so you can stay focused on a collective firm vision.

Finally, be kind to yourself so you can see things how they are, which gives you the power to change them when you need too.


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