Business Partnership Advisor
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Chris Reich, Business Luminary
Talking to Crazy: Dealing With an Irrational Business Partner
There are cases where one partner will not accept anything offered in order to make peace. That is irrational behavior. When a partner goes from demanding, hostile, nasty, or picky to acting irrationally, it is very important to document everything. You may be headed to court.
What Is an Irrational Partner?
According to just about every psychological, economic, and business defition, a person is irrational when they act against their own interest except when acting for they believe is a greater good. The soldier who goes to war is not acting in his own interest as he stands before enemy fire, but he acts to preserve the lives of his countrymen back home. (Excuse the language’s sex bias)
Your business partner may get picky and criticize everything you do. Your partner may pick at you constantly. The tension may even harm the business. That isn’t necessarily irrational. When you try to talk with your partner, he may be very nasty. When you ask, “what can be done to make this better?” and can’t get an answer, you better pay attention. If your partner blows up and says, “I’m sick of working 10 hours a day and making the same money you are when you only work 5 hours.” That’s a rational argument though it may or may not be justified. If you offer to permit your partner to take a much higher salary than you are taking only to have that me with rejection, there is either another driver to this situation or your partner is acting irrationally. I have seen cases like this and they are very tense and frankly, scary.
If you make a real effort to work things out with your partner and cannot find anything that he will accept, start saving emails and texts.
If your partner will not tell you what he wants, it’s time for you to get help.
If you discover your partner is irrational, document everything.
Partnership Advice by Chris Reich, TeachU
What to Do if Your Partner IS Irrational
An irrational person is very dangerous to deal with, and you must be very careful. Consider your safety and the safety of your employees and customers. If your partner makes threats or does anything physical, call 911. Better to be safe than sorry.
If your partner is continuing to make your life miserable, be very careful not to be pushed into a nasty reaction. Hold your temper and your tongue. Maneuver things into written exchanges.
You might say something like, “can you write up your feelings and give them to me in an email that I can think about over the weekend?” Don’t fall into the trap of saying something like, “I can’t work with you! I’m out of here!” You do not want to express anything that can be interpreted as your desire to bail out. You could lose your interest in the company. When a partner is irrational, and if that can be clearly documented, there is a possibility that your partner can be sidelined. Having to work things out with an irrational partner is very stressful and people often walk away from their interests merely to avoid dealing with crazy. That’s a mistake. Sometimes the apparently irrational partner wants that to happen.
Document, Document, Document
Remember to document everything. Keep the nasty emails. Keep everything that demonstrates your partner’s behavior. Walk away from arguments by saying, “Please send me an email. We can talk when you calm down.”
Little can be worked out when a partner is irrational. This is most common in family businesses. The only times I have not been able to make much progress in work out a situation is when a party is not rational in their ranting. Most things in business can be fixed, but little can be done about hatred. Don’t go it alone. Get advice.
In my practice, I have been able to work out situations that seemed irrational but in reality, there was an underlying cause and demand.
Somebody’s feeling were hurt months ago and that insult is at the root of the tension. Or, in one case, a partner bought a new car years ago and the other partner resented it. The resentment built up over time and now it’s no longer about the car, it’s just personal. When we find that thing, it can be fixed and I’ve done it.
Lawyers are expensive. Once lawyers get involved, the dispute will get a whole new life. I always recommend that clients avoid the fight and work something out rather than risk it all in our crazy fun-house court system. Don’t take the risk.
Time to Get Out
There is a time to get out. If you have a buy/sell that provides for your exit, start the process. For that, get a lawyer and get out.
If you don’t have a buy/sell, you can ask the court to dissolve the partnership, or you can, in some circumstances, sell your interest.
The thing is, few people will want to buy into a hostile mess. In that case, I have helped clients work out a sale agreement with their partner. It can be done.
The most important takeaway is to remember to keep your mouth shut. If you blow up and say the wrong thing, it will be used against you. When dealing with crazy, be careful.
Chris Reich, TeachU
Please consider reading this excellent book on dealing with irrational people. It will help not only with business situations, but will be useful in your personal life as well. Chris Reich
When business partnerships go bad, very often someone wants out. That starts one of two possible processes. The business enters Wind Down and begins the process of closing or the partners start discussing a Buyout.
When the business partnership breaks down, the darker sides of the personalities come through. A dominant partner turns into a bully. A person who does not do well with conflict will withdraw. As the bully gets more aggressive, the pacifist withdraws further. Eventually, the bully gets so angry they are ready to lock the other partner out. The pacifist quits coming in. The next blowout is over money. The course is as logically predictable as what will happen to your car if you hit the highway with no oil in the engine. It will get louder and louder until the engine seizes.
I recommend that partners talk through a specific issue and then draft an agreement (called a resolution) that sets a policy. You can keep this in a binder to serve as amendments (or foundation) to your Partnership Agreement. In this post I’ll explain how to talk about things that bug you with your partner and how to draft a binding resolution to fix the problems.