Why business partnerships fail. Here are the 9 rules for making them work.

It's said, "If you want to go fast, go alone. If you want to go far, go together." This observation can apply to business as well.

Business partnerships are often compared to marriages. Like a good marriage, they require effort, commitment, alignment, and clear communication to succeed. When done well, they can achieve what otherwise may be impossible.

Research on partnerships is difficult to find. But here is an observation to chew on: Depending on the data source, only 5% - 9% of all businesses in the US grow beyond $1M in revenue. Very few companies that grow beyond $1M in revenue are owned by a single individual.

So, if your business is larger, it is likely some form of partnership. If you hope to have a larger business, it will likely require more than one person's investment, brainpower, ability, and connections to make it happen.

However, like marriages, many business partnerships start with good feelings, high hopes, and flowery dreams. But in the actual push and pull of business, those can fade. Here is what is required for long-haul success:

Nine Rules For Effective Partnerships

When partnerships work well, and especially if they survive times of conflict or crisis, you'll find that they practice the following rules:

1. Protect trust and transparency - Partners must trust each other and communicate openly and honestly. When I'm asked to intervene in a partnership dispute, two issues nearly always emerge. The first is a breakdown in trust. It's vital to make transparency in business practices normal. Work to keep each other's trust. Repair breakdowns in credibility as soon as possible.
2. Respect each other – Not feeling respected is another issue that nearly always emerges in troubled relationships. Partners should work to respect each other's opinions, ideas, and contributions. You may not always respect everything about your partner But you can treat them respectfully. Note: Respect is individually defined. What I need to feel respected is likely different than what you need. Respect only works when offered in a way that the other person recognizes it.
3. Share your values and work ethic - Partners with similar core values and commitment levels find it easy to work well together. Values drive core priorities and decisions. The more aligned your values are – the more naturally you'll find yourself moving in the same direction. The less likely there will be conflict and misunderstandings.
4. Share your vision and goals – Successful partners agree on what they are trying to accomplish. They work together for the same (or at least harmonious) outcomes. They also understand that vision and goals may evolve. They practice talking this through.
5. Clarify roles and responsibilities - Defining who is responsible for what helps avoid confusion and conflict. Clarifying expectations will go a long way toward preventing misunderstandings, disputes, and resentment. Don't assume your partner can read your mind. And if you aren't sure what your expectations are – how can you expect your partner to know?
6. Appreciate complementary skills and strengths - Partners often work best when they bring different but complementary abilities. It helps when each partner looks at the other and has clear reasons to say, "I need you." Partnerships struggle when one (or a few) partners start believing they unfairly carry all the weight. They also struggle when partners have the same strengths (because this often means they have the same weaknesses).
7. Commit to effective communication - Clear communication is crucial for alignment and problem-solving. Good partnerships talk openly and talk frequently. This is so much easier if there is shared trust and respect. It is natural when there is clarity about what you are trying to accomplish and it is easy when there is agreement on how everyone contributes towards success.
8. Commit to resolving conflict well – Conflict is inevitable. But whether or not it is productive is a choice. Engaging in conflict respectfully and with integrity can strengthen relationships and partnerships. For more on this, see my book Conflict and Leadership.
9. Write your agreements – Keeping your agreements in writing helps set expectations and resolve disputes. Some owners never write these down. More often, some attorneys happily billed them for a generic "fill-in-the-blanks" Operating Agreement. Technically, it might hold up in court. But who wants to go to court? An effective operating agreement should:

• Be written in plain English (or your language of choice) and understandable.
• Be useful in times of conflict, crisis, or confusion by creating clarity on how to navigate these often-anticipatable challenges.
• Provide a path for partners to resolve conflicts.
• Regularly be reviewed and updated to serve your current and anticipated needs.

Conclusion

Successful business partnerships are built on a foundation of clear communication, shared values, and mutual accountability.

Stay aware of common challenges. Integrate the principles above, and your partnership can thrive and achieve great things. Good partnerships shouldn't be left to chance. The effort invested in building a healthy, aligned, and accountable partnership pays dividends in long-term success and the ability to enjoy your business and life.

Take good care,

Christian