Tag Archives: entrepreneurship

Work place conflict 2

Stopping Founder Fallouts from turning into Start-up Failure: Emotional Intelligence

Earlier I briefly outlines a few ideas for getting clarity with regards to some issues that might emerge among founders of start-ups: documented processes for dealing with questions of decision making, what happens when the partnership is dissolved, who gets what and also for resolving disputes. Leaving these matters to an ad hoc approach will likely prove disastrous.

Whatever structures and documented processes are put in place, interpersonal competencies are still significant factors enabling the kind of positive relationships that can weather the challenges of a new venture. There is no substitute for a capacity to engage with differences in an emotionally mature manner. These not only serve husbands, wives, partners and friends well but also contribute to the wellbeing professional relationships. The double bind in one situation where I work was the utter lack of documented processes for addressing conflict but also a corresponding lack of emotional intelligence on the part of key individuals.

As noted before, conflict is cool and potentially enriching when we have the wherewithal to work with it in a constructive way. Where there is a recognised lack of competency in the area of interpersonal communication, founders and those bodies supporting them might consider training and other strategies for developing them early on. A few skills bases that may go some distance in enabling co-founders and their start-ups to flourish -all things being equal: you know your market, have the stamina to bear the pressure of a new start-up and have the capital, etc. – include:

An ability to step back and listen: bracketing your views, personal issues, impulses to say what you cannot take back, etc. and giving space to your colleague to express their views is important. It this can be done with empathy and some acknowledgement of the strengths of your colleagues’ take on things before offering your perspective can change the energy of a conflict. When individuals feel that that they have been listened to they also have the space to listen. This will also allow space for manoeuvre and change as needed for both partners. Being able to maintain a non-judgmental stance and not rush to judgment before coming to a verdict on your colleague before fully hearing them out will diminish the risk of coming to grief on the shoal of misunderstanding.

An ability to respond to sound argument: One of my philosophy professors use to encourage us, however convinced we might be about an issue, to be ready to say, ‘but I could be wrong’. In connection with this he would add that he is not one iota interested in our opinions but in our argument. Being willing to consider the possibilities that another view may have more weight than our own can make the difference in making a good decision or going with a seriously wrong idea simply because ‘it’s my idea!’ Stella Fayman, in the article referred to in the last blog, commented on the importance of being ‘data led’. (http://ways4ward.co.uk/stopping-founder-fallout-from-turning-into-start-up-failure/www.forbes.com/sites/stellafayman/2013/04/19/what-happens-when-startup-founders-disagree/) Our readiness to respond to genuinely sound reasoning from a colleague will be informed by the aforementioned ability to step back and listen.

An ability to trust one another: One of my favourite films is ‘The Shawshank Redemption’. Early on in the story Andy Dufresne, innocently convicted of murdering his wife and her lover, narrowly avoids a serious butt-kicking from the sadistic captain of the prison guard Clancy Brown when he asks ‘Do you trust your wife?’ Before getting dumped off the roof he quickly explains the practical significance of the question for avoiding paying taxes. He is saved and finds a lucrative niche for his professional services among prison staff that, in the end, also enables him to provide for his own security upon escape in the future. Trust is a key ingredient for any positive relationship. At the best of times co-co-founders may know each other quite well and substantial trust will already exist. At other times it is a commodity that will need to be nurtured. But trust in the other person’s integrity, motivations and skills are crucial to a successful partnership. It is best at the beginning of a start-up to ask the question: do I trust this person.

In a word, alongside practical structures ensuring a sound basis to the relationship among founders, emotional intelligence will amply compliment whatever business savvy is brought to the adventure of a new start-up.

Work place conflict

Stopping Founder Fallout from Turning into Start-up Failure: Supporting Structures

The statistical failure for new start-up companies is disheartening. Depending how you define ‘failure’ in this context it is estimated anywhere between 70% – 90%. The shear stress involved in starting up a business, inadequate appreciation of who the potential buyers are and, basically, running out of capital are often cited as major reasons for failure.

But another contributor to the failure of start-ups, particularly those involving two or more entrepreneurs, is fallout among the founders. Stella Fayman suggests conflict between founders early on in the process of establishing new companies is a major factor in start-up failure. (http://www.forbes.com/sites/stellafayman/2013/04/19/what-happens-when-startup-founders-disagree/) (accessed 30/07/2013)

The ability to work with conflict should rank alongside those skills essential to successful running of a business. I would suggest that these skills need to be complimented by some practical structural factors at the beginning of any new venture.

Attitude is fundamentally important. In my workshops on conflict resolution I often refer to the two characters that combine to make the Chinese word for ‘crisis’. Ji and Wei respectively refer to ‘danger’ and ‘opportunity’. Like ‘crisis’ conflict provides not only a dissonant moment in a relationship but also an opportunity for growth and learning. As Fayman comments in the above article, ‘conflict is good’. A positive orientation toward conflict – along with the realistic expectation that you will have it – may go a long way in providing the positive energy for weathering those early differences you may experience with your business partner(s). Of course attitudes around respect and the ability to listen is equally important. I will talk more fully about these and a particular skills set that will contribute to the success of a start-up in another blog.

Here I want to say a few things about the importance of basic structures incorporated into a business early on. Awhile back I was working with staff involved in a newly launched business providing an alternative education. The enterprise was actually in its second year when I was invited to work with staff and founders in regards to a conflict threatening to bring the business to an end. What surprised me was to discover that no solid policies had been in place regarding conflict resolution and disciplinary procedure. All power devolved to the founders (a married couple) and they were (absurdly) the arbiters in disputes between themselves and their staff. The situation was made more delicate by the relationship between the founders. Short of a mature capacity to bracket personal interests and listen to others’ concerns – which was much in lack – a foundation of clear policy defining procedures for resolving disputes would have provided a solid base for engaging with differences whether among founders or between founders and staff members.

At the very outset of a start-up it would be helpful in the long term if partners could agree on basic policy covering eventualities of differences between them or between them and other workers they employ. The document might identify a third party process for resolving differences and also cover some of the critical co-founder questions posed by Dhamesh Shah: how should shares be divided? How will decisions get made? What happens when a partner leaves the company? Can a partner be fired? By whom? And for what reason? Etc.. (see http://onstartups.com/tabid/3339/bid/99/, accessed 31/07/2013)

Clearly written policy documents outlining processes and procedures or addressing difference will go far in placing a start-up on a more secure footing in a venture that holds enough challenges without conflict between founders.