5 tips to ease business tensions
“An offended brother is more unyielding than a fortified city, and disputes are like the barred gates of a citadel.” Proverbs 18:19
Whether you call it a farm, a store or a wealth engine, we’re talking about the same thing: your business. Most businesses are owned by more than one person. Even a business that is owned by a husband and wife is a multi-owner business. Making decisions is the most challenging aspect of owning a business with another person. I’ve coached hundreds of people in their business transitions and the most common cause of tension is related to decisions. When it comes to making decisions, people are so close to the complexities they don’t know where to start.
Whether you’re thinking of transferring authority to someone in the family, or if you’re getting ready to sell the business, or if you’re thinking of becoming the owner in a business (maybe your parents’ business) you need to know what commonly happens. Most people hope their co-ownership will “work out.” It usually works out poorly. It usually looks like this: People stop talking to each other. They don’t know what’s causing the tension in their business. Everybody gets frustrated. Most people aren’t experts at sharing authority and they don’t want to be. And what happens if you just do nothing? If you just keep making decisions the way you’re currently doing it? Things get worse. And your family breaks apart . . . and you’re forced to sell the business . . . and when people ask, you mutter something about a “poor economy” or “wanting to try something different.”
A better way
It doesn’t have to be that way! I have an answer that works. Here’s the story: Over the years, I’ve guided hundreds of business people in the transfer of decision making. I’ve had hundreds of people tell me about the tension in their business. Two of the biggest challenges are relational complexity and financial complexity. A successful decision-making process will help your business to succeed and will help you to have satisfying relationships with the people who matter most to you.
Here’s the opportunity for you: imagine having business meetings without meltdowns or the “silent-treatment.” Imagine a business environment where you’re NOT constantly managing other people’s behaviour. Imagine a day-off with someone special in your life without having to “put out fires” in the business. You’ve probably known for a long time poor decision-making creates tension and misunderstandings. Just think back over the last few years and consider whether you’re delighted with the decisions your co-owners have made.
You have a choice to make. Because here’s the thing – real life throws dysfunction at you all the time. Successful decision-making doesn’t just happen. And it’s no wonder. Just look at all the complexities in business: the people, the emotions, the money!
The power of having a process to make good decisions is incredible. The following 5 steps will help to keep your wealth engine running:
1. Identify the goals of each co-owner in the three main buckets of life (1) family/personal; (2) ownership; (3) management. Every person finds it effortless to prioritize ONE of the buckets shown above. People rarely agree on what bucket to prioritize and the decisions that should be made. To experience harmony and success, it is essential to understand the co-owners’ desirable future possibilities. Only then can everyone feel understood and agree on the #1 Most Important Business Goal.
2. Agree on the #1 Most Important Business Goal. If you have too many goals you won’t accomplish any of them. If you and the other co-owners can’t agree on the #1 Most Important Business Goal then you will constantly have disagreements (many of them unspoken) about the decisions being made in the business.
3. Identify the obstacles and strategies to overcome them. Your personal life, your ownership of the business and the management of the business all compete for your attention at the same time. This isn’t right or wrong, it’s just true. You can’t be sorting cattle and be fixing the baler at the same time. When you and your co-owners agree on a strategy, make sure you identify which person will have the responsibility and authority to take the necessary action. You can have satisfaction and fulfillment in all the important aspects of your life. But it takes work.
4. Document Authority, Responsibility and Accountability. This is the most important (and most difficult) of these 5 steps. Authority is the hardest aspect to figure out. Most people are half-clear about their job description (what they are expected to do). However, most people have extremely low clarity on their authority . . . on the decisions they can make without having to check with anybody. I often hear business families say that they make decisions together. I never believe that. What they usually mean is the person with the loudest voice or the person who uses the “silent treatment” are the ones who end up making the decision. Write down on a single sheet of paper the decisions you KNOW you can make without checking with anybody . . . that’s your Authority. Write down the things you are responsible for (the stuff you have to DO). Then write down how the business will hold you accountable for the commitments you’ve made.
5. Identify and monitor key predictive indicators AND create a rhythm of weekly accountability. If you don’t have a rhythm of accountability then you will have unspoken tension between the co-owners. Accountability gives freedom for the co-owners to exercise their authority without other people butting-in to give advice. A rhythm of accountability focused on key predictive indicators will make it easier to celebrate successes and make it easier to stop a problem before it gets too big. This will help you to keep allocating authority without ruining your wealth engine.
What would it cost you if the poor decisions and tension just continued? Whether you’re thinking of transferring authority to someone in the family, or if you’re getting ready to sell the business, or if you’re thinking of becoming the owner in a business you can use these 5 steps to have a satisfying and fulfilling environment in your business. Any business can make better decisions by using these 5 steps because they turn financial and relational tension into harmony and success.
I’m leading a free, four-part video workshop Sept. 14-29 entitled Avoiding Co-Owner Disaster. I’ll be showing you more tools to turn financial and relational tension into harmony and success. This is a LIMITED-TIME, free workshop. Go to iancubitt.com to access the free workshop.
This article is sponsored by Ian Cubitt.