“Effective teamwork begins and ends with communications”
Duke University basketball coaching legend Mike Kzyzewski
Anyone who has ever been in a long-term relationship probably knows how difficult it is to always be “on the same page,” i.e., regularly in sync with those who are important to us. Whether the other person is a marriage partner or business partner, it’s virtually impossible to regularly see eye-to-eye. There can often be days (or weeks) when we are out of sync, to say the least, with a key partner. It is difficult to measure the ramifications of such failures to communicate but it is safe to say that had it been prevented we (and those working with us) likely would have experienced a better outcome. Communication affects each aspect of our lives yet we often devote too little time to doing it as well as we can. While we each communicate, few of us are truly successful communicators — there is often a cost for this.
“Be persuasive, not abrasive,” advises consultant Kerry Patterson, co-author of: Crucial Conversations — Tools for Talking When Stakes Are High. When it comes to business, few things can destroy a company’s future like poor partner communication. At our offices, we have experienced this personally and witnessed it in dozens of client situations. It’s very likely we can point to any number of stressful experiences and often the root cause can be traced to a communications breakdown.
Should we find ourselves in such a situation, it is most important to never stop communicating. We should regularly make each effort to clearly communicate and when in doubt, as my dad always said, “over-communicate,” i.e., be abundantly clear.
On the Front Lines
Owners build sustainable, thriving, and profitable businesses that benefit their customers, employees and families. One day they will want to seamlessly transition that business to the next owner on their terms and in a way that meets their personal goals and those of their constituents. But as we have seen time and again, once the inevitable ownership transition appears on the horizon, the odds of partnership friction and discord can increase unless there is a concerted effort put into clear and consistent communication.
Consider these examples:
- One partner with children working in the business foresees the “kids” taking over for generations to come while the other wants to sell to the highest bidder and get to Florida as fast as possible.
- One partner whose children are employed by the company worries what will become of them if/when the company is sold.
- One partner is in poor financial condition and possesses a sense of urgency to immediately sell the business at the highest possible value while the other has little need for liquidity from the business sale and hopes to sell it to the “right” buyer instead of the one paying the highest amount.
We have dealt with each of these scenarios and many more. In each case we can understand the elevated emotions and how easily the process can run off the rails and implode. Such discord and friction can only hurt the value of the business and minimize the odds that the stakeholders will get most of what they want. Our experience has confirmed that almost 100% of the time, disappointment is rooted in poor communication.
Avoid the ‘Whisper Effect’
To address hugely important and potentially costly issues, take steps to ensure clear communication. This can limit the odds of a “whisper down the lane” effect where people interpret and assume one’s intentions based on rumor and innuendo rather than on direct communication. A solution: consider introducing an objective, third-party professional to work with each partner to assimilate their current and long-term goals, thus maximizing alignment and minimizing conflict. With confidentiality parameters in place, an owner can communicate personal goals or concerns that they may not feel comfortable sharing with others.
Ultimately, every business owner will exit their business one day. The objective is to exit on your terms. Taking steps towards consistent, constructive and intentional communication minimizes confusion and distrust while maximizing the odds of success for all. Assisting businesses with multiple owners navigate these pitfalls and engineering positive outcomes is another example of how WE DO MORE at Legacy Planning.
A Business-Communicators Checklist
- Are messages to partners clear and understood?
- Do otherwise ordinary situations escalate to tense levels?
- Do you listen as well as talk?
- Do you communicate in an appropriate tone?
- Are ideas being executed?
- Are details getting lost?
- Is there access to a third-party professional to objectively intervene?
If you think we can help you experience a successful transition, please visit us at: www.Legacy-Online.com.
The preceding case study is provided for illustrative purposes only and may not be representative of the experience of other clients. Every situation is different and actual performance and results will vary. This case study does not constitute a recommendation as to the suitability of any investment for any person or persons having circumstances similar to those portrayed. Please consult a financial advisor regarding your individual situation. Past performance does not guarantee future results.