On June 19, I was a guest on the Michael Kitces podcast, "Financial Advisor Success" The whole interview was 90 minutes long, so I am going to publish some bite-size snippets from the transcript. The full podcast and transcript are here: www.kitces.com/77Read More
“All happy families are alike; each unhappy family is unhappy in its own way.” - Leo Tolstoy, Anna Karenina
Whether or not he was correct about families, Tolstoy’s philosophy does not seem to hold true for business startups. In fact, the opposite is true: startups can succeed for a variety of reasons, but most fail for the same reason: poor relationships among co-founders. Studies suggest that the majority (62%) of failure in start-ups is attributable to irresolvable conflict among co-founders. This is unfortunate not only because some great business ideas never come to fruition, but also because it is preventable.Read More
“If two men agree on everything one of them is unnecessary.” - Henry Ford
Advice about finding the right business partner almost always includes looking for someone with complementary skills. Especially in a start-up poised to grow rapidly, it seems smart to get partners with clearly distinct skills. But the truth is that a partnership can perform very well even when the partners do not have clearly defined complementary skills. In most cases a leader can hire someone with the skills they need. What partnerships have trouble surviving is a lack of complementary thinking styles.Read More
"The only real mistake is the one from which we learn nothing." - Henry Ford
We all hope to learn from our mistakes, so we found it a little surprising when our recent survey of about 150 business partners revealed a troubling trend. Only 38% of those who had been in a previous partnership that “ended badly” report having worked with their current partner prior to joining forces. This is slightly lower than for those in first partnerships.
Working together before taking the leap into a partnership is one of the most important steps that prospective partners can take. Here is a reminder of the top three things that potential partners should do to prevent being part of the grim 70% failure rate for business partnerships:Read More
Those of us who have been involved in conflict, which is to say all of us, know that resolving issues early, while they are relatively simple is a great approach that is too often not applied. We avoid conflict and confrontation and hope things will get better. Sometimes they do. Often they do not and instead grow more and more complex.
While every conflict is unique, it is important to structure the resolution process to work through the issues in a systematic way that fosters a sustainable solution. Often the issues in partnership conflict share two common themes: contribution and control.Read More
If having one partner is good, is two better? Will you continue to gain exponential benefits as partners are added?
While there may not be an ideal number of partners in an investment advisory firm, we’ve found that partnerships of more than 2 but fewer than 6 partners seem to struggle with the least efficient communication and strategic implementation. They also show the lowest levels of satisfaction among partners.
It’s likely that the reasons have to do with lack of clarity around areas of control and the perceptions of contribution among the partners. Partnerships of this size have often grown opportunistically: they met like-minded people and decided to bringRead More
In working with our clients to build strong partnerships, we look closely at 4 critical areas that successful partnerships share. These factors lead to better decision-making and clearer progress toward firm objectives, and much more satisfied partners. If missing, partnerships will fail to fully leverage the benefits of their joint efforts. At worst, it can mean the acrimonious dissolution of the partnership and the business.Read More