Before a business conflict can be resolved, the real pain has to come to the surface

Two good friends and smart young men decided to start a fantastic adventure together. They were going to build a software company with a specific solution for municipalities, and the idea landed so well that they raised their full start-up capital through crowdfunding. Before long, they had a handful of employees and the future looked bright.

Until it turned out that municipalities can be very slow when it comes to decision-making, software needs constant maintenance and bugs have to be fixed again and again under high time pressure. Slowly but surely, liquidity started to run out, and under that pressure the first cracks in the partnership became visible.

On the work floor, they started avoiding each other. During meetings, tempers sometimes ran high, and you could simply smell that they disagreed about the direction of the company, the product development roadmap and the different ways in which they both dealt with employees. Slowly but surely, even the team became divided into two camps.

A typical example of how good intentions can turn into a disaster scenario when two business partners, founders or co-founders no longer agree with each other. In start-up terms, this is often called a co-founder conflict, but in practice it is simply a conflict between two people who wanted to build something together and lost each other along the way.

As an executive coach, I unfortunately come across this more than once. Although I do not often mediate between business partners, I made an exception this time. One of the two partners was a former employee of mine and because of the good relationship we had, I decided to help.

This story is not a blueprint for every conflict between business partners. People, interests and companies are too different for that. But it does show how a stuck partnership can sometimes start moving again once the real pain is put on the table.

Before a business conflict can be resolved, the real pain has to come to the surface

The mediation started with an individual conversation with both of them. In those conversations, they could put everything on the table about what, in their view, was wrong inside the company, with the other partner and in the market. That is extremely important in a situation like this, because before a conflict between business partners can be resolved, the real pain has to come to the surface. But then, of course, you first need to understand where that pain actually sits.

As a coach, the first task is to listen through the noise. That noise almost always arises when a business conflict has been going on for a while. At the beginning of such a conversation, you often hear a cacophony of frustration, irritation, powerlessness, stubbornness, disappointment and wishes. It takes more than listening well and asking the right questions to get to the core.

Because most of the time, the conflict is no longer really about that one incident, that one decision or that one remark during a meeting. It is about an accumulation of moments in which someone felt unheard, unsupported, not taken seriously or even betrayed.

But if you keep asking the right questions, it usually comes down to just a few essentials that are the real cause of the conflict. The rest is often a consequence or a side issue.

That alone already gives both business partners a great deal of clarity. Not because everything is solved, but because they finally see what it is really about.

Confrontation is sometimes the best remedy in a conflict between business partners

It may sound a bit contradictory, but in a conflict between business partners, entering into the confrontation is sometimes the best remedy for finding a solution.

After the individual sessions, I gave them the assignment to write down the essence of the problems we had uncovered and to formulate the accusations around that essence towards the other business partner in a factual way. Not as a whole essay, but short and analytical. It was even allowed to become personal, and there were even allowed to be accusations in it.

That may seem unorthodox, and it is certainly not something I would recommend without a coach, mediator or mediating executive coach present to keep the confrontation on the right track. But especially in a conflict between founders or business partners, it can be very effective not to talk around the pain, but to put it on the table in a controlled way.

Many business conflicts continue to exist because everyone keeps acting diplomatically, while underneath the table the accusations only grow bigger. On the outside it may look as if people are remaining professional, but in reality more and more distance, distrust and irritation are being created.

With a little help, both business partners had written half an A4 page, and it was time for the real confrontation.

Taking responsibility for feedback in a business conflict

Nervously, they sat together at my table, each with his folded piece of paper. The rules were simple. One person would start, and the other was only allowed to ask clarifying questions or confirm that he had truly understood the other person. So not just heard him, but really understood him.

What the other person puts on the table may not be denied, minimised or trivialised. It is the other person’s experience and frustration. At that moment, it is true for him, and as the receiver, you have to take responsibility for that.

That does not mean you have to agree with everything. It also does not mean the other person is automatically right. But when someone who has built, worked, invested and fought alongside you for years sincerely tells you what your behaviour has done to him, you cannot just step over that lightly. Especially not if you still want to restore the partnership between business partners.

When both business partners had expressed their frustrations to each other, you could feel a sense of relief in the air. Even a sense of renewed connection. I allowed a moment of silence to fall, and suddenly one business partner looked at the other and said: “I’m sorry. I didn’t know I made you feel that way. That was never my intention.”

The other partner visibly struggled and had to hold back a tear. Then he said: “I’m sorry too. This should never have happened, and I take responsibility for my behaviour and my actions.”

A deep silence followed. The kind of silence in which you can feel that something has shifted. The business partners still felt a strong bond with each other, but that bond had become buried under the madness of daily operations and the stress that a start-up can sometimes bring.

The final question of that session was whether they still wanted to work together and whether they still had faith and trust that things could be repaired. Without hesitation, directly and spontaneously, both answered with a clear yes.

That was the opening to move into the next phase. Not only to resolve the conflict, but also to prevent it from quickly arising again in the future.

What will you do to make the partnership workable again?

Where two people fight, both carry responsibility. We all know that saying. That is why, as an executive coach, I believe that in a conflict between business partners, you should not start by asking what the other person needs to change. Start with yourself and look at what you can do to make the partnership workable, healthy and safe again. You are the only person you have one hundred percent influence over. That is where you can make the real difference.

That is why I asked both business partners to write down concrete actions. What did they, with the knowledge they now had, want to change in their behaviour or actions to prevent frustration in the other person in the future?

Some people find it difficult to put that into specific words, but as a coach you are trained to play a supportive role in that. Before long, both men, now visibly more like friends and business partners again, had a number of points they could read out to each other.

Every statement began with: “I will take action in the area of...” and ended with the willingness to be supported through coaching where necessary.

That may sound simple, but it is not. It is much easier to explain what the other person is doing wrong than to say out loud what you are going to do differently from now on. Yet that is often where the real breakthrough in a business conflict lies. Not in the perfect plan, but in the willingness to take responsibility again for your own part.

Sometimes the hardest choice is the best thing that can happen to you

A week later, I received a call from one of the two partners asking whether he could come by that day. He said: “Ben, I have thought about it carefully, and even though the friendship has been restored and the partnership feels like it used to again, I think I made the wrong choice.”

I listened carefully and already felt where he was going.

“I started this company with my friend on impulse, but it is actually not what I want to do at all. My passion lies somewhere completely different, but I do not want to abandon him in this difficult period.”

Because of the clarity that had emerged by resolving the conflict between the two of them, this partner was able to reconnect with his own feeling. He realised that he had a difficult choice to make. Either he would go and do what his heart was telling him to do, or he would choose his friend out of loyalty.

That is something that often happens when a conflict between business partners is truly spoken out. Sometimes the problem is not only that people think differently about the direction of the company. Sometimes the problem lies deeper. One of the two may not actually want to go in the same direction anymore, but does not dare to say it out loud because loyalty, guilt or fear of the consequences gets in the way.

The day this conversation was put on the table, you could mainly see relief in the other partner. He said that he had actually always had that feeling somewhere in the back of his mind, but had never been able to name it properly. He assured his friend that he would manage on his own and told him he should follow his heart.

A month later, the departing partner had found his dream job, where he still works now, years later. And as if by some miracle, in that same month the company landed exactly the few projects it had been chasing for months.

The two of them still have a drink together every week, laughing heartily about the adventures they have gone through both privately and professionally. According to both of them, in hindsight they should have called in the help of a mediating executive coach much earlier.

But yes, hindsight is always easy.

When should you seek help with a conflict between business partners?

A conflict between business partners, founders or co-founders does not immediately have to mean the end of a company. But you do need to be honest enough to recognise when conversations no longer work, when irritation takes over the partnership and when the team begins to feel that something fundamental is wrong.

That is usually the moment not to wait any longer. Not because a coach, mediator or strategic sparring partner solves everything for you, but because someone from the outside can help remove the noise, bring the real pain to the surface and bring the conversation back to what it is truly about.

Sometimes that leads to a restored partnership. Sometimes to better agreements. Sometimes to an honest goodbye. And sometimes, as in this case, to all three at once.

I personally guide entrepreneurs, founders and leaders through these kinds of difficult conversations in Amsterdam and the surrounding area, or from my location in Aalsmeer. Online is also possible. Not to decide who is right, but to get clarity faster about what is really going on, which choices need to be made and whether the partnership still makes sense.