Last updated on May 13th, 2019 at 02:29 pm
When partners are at odds about the best path for their company to follow, calling upon an outside advisor for assistance makes a lot of sense. However, too often, consultants study financial reports and the company’s strategic planning document but fail to examine the personal vitality and personal goals of each partner to ascertain how these have influenced corporate decisions.
To illustrate this, I want to share some details of a coaching engagement I had not long ago.
I was asked to provide coaching services for the partners in a closely held service business that was quite profitable and recognized for quality. Their attorney arranged the referral.
Changing a few of the details to preserve confidentiality, the following situation was presented to me during my first interview with the group of partners.
There were four principals. Two of the partners were in their 60s, and they had founded the firm 15 years ago. Another partner was in her early 40s and had come aboard about four years ago. The youngest was 30 and had joined the firm two years ago to head up a new Green Bay office, the company’s first geographical expansion of its facilities network.
The younger partners had joined the company with the understanding that eventually they would be successors to the founders.
The firm’s sales last year amounted to a little more than $4 million. However, the sales goals for the year ending had not been achieved. In fact, the firm had missed its goals by nearly $400,000. All of the partners were concerned about the firm’s failure to achieve the planned revenue goals.
I was told that when they invested in the new Green Bay facility, all of the partners expected that cross-pollination in marketing activities would bring big results. This was not occurring. This year, unlike any previous year, the partners would not be celebrating with healthy Christmas bonus checks. There was considerable disagreement between the partners about what actions to take to get the firm back on track and growing in a profitable manner.
There was no finger -pointing taking place, but the level of tension within the group was high.
I asked the group if their competitors were experiencing similar problems and was surprised to learn they were not. In fact, their particular service industry was doing quite well, even in a lackluster economy. Apparently, their strongest competitor, Company X, had added new personnel during the last six months to meet the demands from existing service engagements. Company X also had opened two regional offices in recent years, and they were experiencing sales growth.
My clients told me that Company X had a good reputation. However, one of the older partners was quick to point out a significant difference between their firm and this competitor. Two years ago, Company X had established a certified ancillary service provider network to embellish their existing scope of services. The network was essentially a group of sub-contractors in related fields. They were on-call to Company X service agents in the event the agents required specialized assistance in serving a particular customer.
My clients said they elected not to follow Company X down the same path because they all believed that control over quality would be lost if their firm tried to be all things to all customers through the use of an array of sub-contractors.
I left my first meeting unsure of the direction I would be taking with my coaching activity. I believed that it was essential for me to meet with each of the partners individually to do some further interviewing. These interviews proved to be very fruitful.
Contrary to what had been told to me in the group meeting, there was not agreement among the partners concerning the mission of the company and the road map to follow to achieve its development goals. The founding partners had significantly different views than the others, reflective primarily of their personal goals and needs.
The older partners each spent three months per year vacationing in Costa Rica. Two years ago, they had adjusted their sales goals and compensation level to reflect their lack of availability during this time period.
They were quite comfortable with an aggressive plan for growth, and they were the partners most intent on not following the development path taken by Company X. They had built the firm by always paying attention to clearly defined parameters of expertise and a high level of control over service.
The younger partners had significantly different personal goals and ambitions. They wanted to see their income and net worth grow for an extensive period of time. They each had joined the firm because they believed that a partnership in the firm was a major step in fulfilling personal goals for themselves and their families.
As partners, they had assumed personal liability for a loan to their firm in connection with the Green Bay expansion, and they were now feeling stretched with kids attending private schools, hefty new mortgage payments, etc. They each believed that Company X’s move to create a network of ancillary service providers was the path their firm should be following to remain on the cutting edge in the eyes of their customers.
They acknowledged that during the company’s strategic planning and in the group meeting, out of respect and admiration of the founders, they had restrained themselves from strongly objecting on this matter.
In the next meeting of the partners, I shared what I had learned through my individual sessions. There was considerable discussion with each of the partners having much to say about their personal situations, their personal financial goals and other substantive information surrounding these important matters. I was surprised to learn how little each of the partners knew about the current needs, wants, and ambitions of the other members of their team.
Over the next few weeks, we worked together wrestling with what, if anything, needed to be done to change the mission of the company and what, if anything, needed to be done to change the company’s development initiatives.
By the end of my engagement, the older partners decided to relinquish the decision regarding the use of sub-contractors to the successors they had chosen, but not with a feeling of defeat, rather with an understanding that their own personal goals and objectives could be met regardless.
The group decided to invest the time to create a new strategic business plan. In addition, they agreed to have more regular partner meetings and to start each meeting with brief "personal" updates from each partner.
Having a business partner is similar to having a marriage partner. The level and quality of communication in the relationship can influence partners reaching their goals, individually and collectively. Partnership in business is an intimate affair. Like that famous line in "The Godfather" delivered by Marlon Brando, "…nothing is just business…it’s all personal."
People tend to go through stages in life. Paying attention to this reality in planning and managing a company’s development is critical.
For the record, my clients are now well on their way to achieving their personal and corporate goals. The company is growing, and the relationship between the partners is growing as well.
Richard Hellan is the president of Hellan Associates, an executive coaching firm headquartered in Milwaukee. He can be reached at (414) 540-0160.
July 9, 2004, Small Business Times, Milwaukee, WI