Why Partnerships Fail…And what we can do to prevent it
5 questions to ask yourself before your partnership is tanking
As I mentioned previously, most business partnerships struggle and eventually fail for a variety of preventable reasons. I mentioned last time that one reason partnerships fail is that there is no process or context to resolve a conflict. And because of this, important decisions get blown off, offices get divided, and people become really critical under your command. [click here to read]
My response to that challenge was to [1] consider my four rock-solid tips of preventing future conflict as well as [2] creating a clear process for Resolving your Conflict similar to the one I provided here. [Click here for conflict resolution tool]
Part of life is spontaneous and cool and exciting and a lot of us have really cool stories to tell. Like for me, the time I went into a Patagonia store in Berlin, Germany. After a brief conversation with the owner, he invited me to his home the following evening to hang out with his wife and 5 close friends and sample his personal Scotch collection he assembled over the last 10 or so years traveling. After 5 hours of grilled Bratwurst and copious Scotch samples, I had fallen madly in love with the German people and the Patagonia brand!
But one thing that cannot be spontaneous for partnerships is the end game: why are we ultimately in this partnership? This leads me to the fifth and final reason why partnerships tank: No ultimate “north star” goal to create a strategic direction for the partnership and company.
Some companies have a pretty clear cut idea of why they exist, but helping partners to articulate, in their own language, what they really hope the ultimate outcome will be is highly rewarding and often overlooked. Enter the discussion of the “North Star” for your company and what you want the partnership to ultimately achieve. Do you want to grow in order to be acquired? Do you think you can be a powerhouse in your niche? Are you looking for a lifestyle business to raise a family, travel, and enjoy life? Is it a company you want to pass on to your kids?
Answers to these questions will help determine the strategic direction for the partnership and the action steps to achieve that goal. A lifestyle business will require a different strategy than building a business that will become an attractive buyout candidate. And here is the good news: with a modest investment of time and resources, your partnership can craft a mutually agreed endgame for the company. Sometimes it may mean modifying the original partnership agreement, but in the end, it can bring far more motivation and value than just chipping away.
Bottom line? Defining a North Star for your partnership will help determine the strategic direction for the partnership and the action steps needed to achieve that outcome. For struggling partners, a clearly defined North Star can bring a renewed sense of hope, better decision making, and a clear picture of how to cash out or retire.
What’s your North Star? To discuss more options for your business, click here.
This is part five of our five-part series taken directly from
“The Rewired Group – Coaching Experience“.