Red rag... It’s better to air your grievances than resort to blows.
A CANDID discussion can head off serious conflict between business partners. In a small business, when tension arises between you and your partner, there is nowhere to hide.
Tackling tension takes guts, so instead you may squabble - risky behaviour, given that the business collapse rate is at its highest since the global financial crisis, the Australian Securities and Investment Commission's latest annual report says.
Enter Alex Pirouz, a business coach who has personal insight into defusing conflict between business partners. In December 2008, Pirouz founded a direct sales firm, Redline Corporation. At first, it all seemed rosy between Pirouz and his business partner, Aleksandar Svetski.
Redline boomed, but on the way to acquiring 35 staff in nine months Pirouz and Svetski began "butting heads". For one thing, Pirouz says, they both liked to lead and manage staff. For another, they had sharply different operational styles.
Pirouz, who is averse to micro-management, gave staff a free rein. In contrast, Svetski was target-driven, and tied to parameters and deadlines. The discrepancy caused confusion. Employees grumbled about a lack of direction.
Instead of "bottling up" the problem and letting it snowball, Pirouz and Svetski held a one-on-one summit. On a whiteboard, each businessman listed the other's skills and weaknesses. Because Svetski was best at bonding with strategic partners and crunching numbers, they agreed that he should dictate strategy and govern how the company grew, Pirouz says.
Pirouz's niche became staff management: assigning roles and responsibilities to team leaders and their members; aiming to inspire his sales force to better performance.
With the dual-track system established, Pirouz and Svetski tested it monthly, emphasising personal accountability.
The system successfully smoothed out the friction. After 15 months at Redline, as Svetski's focus shifted to the solar industry, Pirouz moved on, remaining friends with his partner, whom he still advises.
Like Pirouz, the co-founder of the personal finance website Money Crashers, Andrew Schrage, favours establishing frankness. Schrage met his partner, the internet marketer Gyutae Park, through mutual friends in Chicago a year before founding Money Crashers in April 2009. Schrage and Park's differences arose early on, particularly about reporting on progress.
In an effort to establishing harmony, Schrage "confronted" his partner. Cue a rational, "very candid" discussion. Schrage felt comfortable voicing his dissatisfaction because their relationship was "very upfront", he says.
"We essentially just laid it all out on the table. I explained my frustrations and how it was very difficult for me to know exactly what our progress was, or what the latest update was on his end. It didn't get heated, though we did get very animated."
Park must have felt "slightly offended", Schrage admits. Still, their shared aim of making a successful business helped them to align. "We met in the middle," Schrage says.
Now, they have scheduled meetings fortnightly rather than weekly or daily, as Schrage originally wanted. In turn, Park keeps Schrage in the loop. The compromise fuels efficiency, Schrage says.
For more information on conflict resolution, see www .betterhealth.vic.gov.au