Partners who go into business together often come from different backgrounds, and they may have strengths in different disciplines. For example, one owner may have a technology background, and they are tech savvy and highly focused on using technological solutions in the business.
The other owner might have a sales background, so for this person, technology is “nice”, but it is not the “end all be all”. Their view is that bringing in new customers and clients through the door is what pays the bills, so this should be where the company directs its primary efforts.
These differing backgrounds and viewpoints can become a major source of contention when running a business. If things are going well and profits are at or above targeted levels, there may not be much conflict around these differences; each partner focuses on their area of expertise, and their complementary skillsets make the business thrive (or so they think).
The disputes usually arise when things are not going so well. During the startup phase, you might be mentally prepared for some lean months, but what if your business has been established for a couple of years, then it suddenly falls on tough times? Sales are down, and difficult decisions need to be made.
How do you get your business back on track? In this scenario, the partner with the technology background might naturally suggest some technological upgrades that will help make things run more smoothly and cost-efficiently. The other partner might take issue with this, however. While saving a few dollars might be helpful in the short term, their view might be that the limited funds available would be put to much better use by hiring some experienced sales reps.
Other disputes may center on fairness and each partner carrying their fair share of the workload. This is a common scenario when there is a significant difference in the ages of the owners. At some point, one of the partners might want to scale back on the time they are spending in the business, while the other one is not ready to do that yet. In such cases, there may be disagreements about how to restructure responsibilities when one partner wants to step back, and how much of the profits each partner should receive going forward.
Why it Makes Sense to Mediate Business Partnership Disputes
When there are conflicts between partners like the ones listed above, the legal system does not provide much opportunity for an amicable resolution. Courts have very little flexibility, and the remedies available after a costly court battle are generally limited to things like the dissolution of the entity, the forced sale of assets, and damage awards. Very seldom does anyone really “win” during these types of proceedings, and going this route is definitely not helpful in preserving the relationship between the partners, relationships that may be important both professionally and personally.
Business partnership mediation uses a different approach. Mediation is a voluntary process in which the partners agree to meet with a neutral, third-party mediator to discuss the issues and guide the conversation toward a win-win resolution. With mediation, there is an inherent understanding that there is no “one-size-fits-all” solution for a business dispute, and that there are unique dynamics at play within each individual partnership.
Mediation seeks to “meet people where they are” and find common ground on which to build on. Both partners want the business to be successful, they just have different ideas about how to get there. Both want an arrangement that is “fair”, they just have different viewpoints about what fairness means within the context of their partnership. This is where an outside mediator can be very helpful.
Someone from the outside can bring a whole new perspective to the conversation. They have no vested interest in the outcome, and they are removed from the day-to-day discussion, interactions, and frustrations within the business. This gives them the ability to offer new ideas that the partners may not have even considered, ideas that could be workable and that both partners might find acceptable.
It is also very helpful to work with a mediator who has plenty of business experience of their own. A mediator with extensive experience not only with mediation, but also with running their own business and/or working with other corporations will be familiar with most of the common scenarios that trigger disputes, and they will know what resolutions have worked well for others who have gone through what the partners are going through.
A business partnership dispute does not have to mean the end of the business. Through mediation, partners can gain a better understanding of where the other is coming from, and they can work cooperatively toward the common goal of building a more prosperous business.