Are Your Goals Aligned?
As you start your business and it begins to grow, it is critical that you and your partners align your goals. Make sure you set both joint and individual goals and share them with each other so that you understand the other person’s point of view. Your ultimate goal should be success.
Sometimes, success can mean separation. Do your goals reflect that? Selling one successful business does not mean that you cannot start another business with the same partner, but having a good exit plan from one business will often preserve the partnership and allow your business relationship to live to undertake another venture.
Before striking out into the entrepreneurial world, I was working as an executive for a startup tech company. There was another executive who was my colleague and ally in the company. He was a level-headed, clear-thinking executive who always exercised sound judgment. Suddenly, out of nowhere, this associate started making simply crazy decisions. I could not figure it out. Then I discovered the reason.
Unknown to the rest of us, my friend had decided to invest his entire IRA in the high-risk company we were involved with. Instead of making decisions that were best for the long–term strength of the company, he started making decisions he thought were best for his investment. Our goals were no longer aligned. The company failed shortly thereafter.
Porter’s Points—Are Your Goals Aligned?
- Write you goals down and share them openly before entering a partnership.
- If you ever have a situation where you can’t understand the logic behind a partner’s action, explore her or his goals. Odds are you have a misalignment.
Best Friends No More
On numerous occasions I have watched as good buddies who really enjoyed playing golf together concluded they would make great business partners. The ability to enjoy someone’s company for an afternoon of golf, even over the course of years, is not the criteria to use when choosing a business partner. Social relationships are completely different than business relationships. They are created for different reasons and are subject to different kinds of stress.
I am aware of a partnership that melted down—or, more accurately, blew up—that exemplifies this point very well. These two individuals were actually best friends from high school. Both were charismatic, highly successful individuals who loved to be the winner and the center of attention. They decided to form a partnership and initially found success.
I noted with great interest that much of their interaction and communication revolved around competition with each other. Although at times that dynamic proved successful, more frequently it became destructive. One of the partners achieved some limelight outside the partnership. He used this notoriety to whip his partner around. He then began an inappropriate (and supposedly secret) relationship with his partner’s wife. Needless to say, they are no longer friends or partners.
It is easy to become competitive with friends. I have oftentimes seen friends get into a business together and then waste their talents on a spitting contest. Instead of getting down to business and allocating tasks with regard to skill set and focus, they try to outdo each other, becoming more like little boys on a playground than a partnership. Not surprisingly, most of these partnerships last about as long as recess.
There is a way to work with friends. In fact, it’s quite possible that your partner, because of your sheer amount of time spent together on your common interest, will become your friend. What is vital, however, is that at the outset, you openly establish the expectations and clearly define your roles.
The most important aspect of any partnership is that you each bring a unique and irreplaceable asset to the table. That asset could be knowledge, skill, contacts, or financial resources. Whatever it is, find someone who complements it.
I tend to be really task-oriented and get a lot done very quickly. I don’t engage on lengthy projects very well. Details drag me down and kill my efficiency. However, I know that ignoring the details can result in—well, a sinkful of smelly fish the next morning. Knowing my tendencies, I look for a partner who is detail-oriented and loves to streamline the work and sweat the small stuff.
I have had one partner and dear friend, Roger Seegmiller, with whom I have owned several small businesses through the years. Roger and I graduated from MBA school together. Some of our businesses have been profitable, and others have been just plain stupid. None of our businesses have hit the million-dollar mark. However, more important to me, we are still dear friends.
Perhaps we are still friends because there has never been enough money involved in the companies to strain our relationship. Perhaps we are more mature than other friend-based partnerships I’ve seen. But I doubt either is the case. I think we are still friends because we have clearly and consistently established and delineated our roles and then drawn on our different contributions.
Porter’s Points—Best Friends No More
- Just because you are “best friends” does not mean you will be “best partners.”
- Be precise with who brings what skills to the table.
- Make up for your weaknesses with your partner’s strengths. This is the foundation of a solid, durable partnership.
I hope that as we continue with Chapter 7: Fish and Partners, you are getting a clear idea of who your ideal partner will be as you start a business.