Common problem-solving in these cases
Finding a solution
Finding a solution (2)
Successful partnerships are based on the combination of inputs that each partner offers. Co-operation between parties however often degenerates when time progresses. The partners concerned obtain different viewpoints or interests. Sometimes the partnership simply fails to accommodate the purpose for originally establishing it. What started as an ambitious undertaking several years ago has often evaporated in time into a lifeless co-operation. In fact, if it wasn’t for the money already invested, and perhaps for the money the partnership still generates, each partner wouldn’t hesitate to terminate the venture.
Most partnerships are established to combine the unique characteristics that partners should contribute. In many instances however ‘the magic sparkle’ that generated profit and satisfaction has definitely rubbed off. Sometimes mutual irritations can even cause business partner co-operation to become detrimental to the outcome of the partnership. To evaluate rationally which options are still available to malfunctioning partnerships management consultants are often hired. Enchanted by the partnership’s glorious and profitable past a solution aimed at ‘revival of the good times’ is sought. But sometimes the quest for a solution is the starting-point of more trouble…
Consultants are taught to establish an overall view of the partnership involved. Why was it successful in the past? What are its problems now? Why does the venture need a stir-up? How do you revive co-operation that has come to rely on old habits and idiosyncrasies?
Extensive meetings with all stakeholders involved will usually gain these insights. The result of this can however be misleading, since the partners are deeply disappointed in each other. In case of mutual reproaches their views might not be very similar.
Many consultants find it difficult to maintain an unbiased position. They single out the partner with the brightest ideas and the most reasonable arguments. Then strategies are implemented to reform the joint venture according to these ideas. Contrary arguments of other parties are, for convenience sake, being ignored. A partial solution, that not always solves the problem it is developed for, results. This is rationalized by consultants’ claims that this solution wasn’t found without extensive deliberation.
Still, this solution should prove troublesome. These consultants are not doing what they were hired for. They suspect that a certain partner is right in a business conflict. Therefore they follow slavishly in this partner’s footsteps. They forget that they were initially hired to provide an impartial view to the problems of the co-operation, taking all relevant viewpoints into serious consideration. These consultants were hired to revitalize a troubled co-operation. Instead they are now about to help terminate the partnership prematurely by indirectly passing judgment. The partners whose insights are overlooked are likely to become deeply dissatisfied with the revitalization efforts. A more successful strategy to solve the problem of dysfunctional partnerships can be observed in the following case study. The corresponding conclusions entail lessons for consultants who encounter similar problems in the future.
This case study deals with a medium-sized technical laboratory in The Netherlands. The laboratory has become successful combining the personal characteristics of its partners. The first partner is more adventurous. He dreams of establishing a laboratory that expands eternally. He aims for profit increases, he wants to deepen his skills and he likes to change the business. In short: he wants it all. This temperament is countered by the input of his business partner. Compared with the first partner he is more moderate. It seems like he ‘has seen it all’ already. He is satisfied if the laboratory runs smoothly: he wants no hassles, just a nice income will do.
Up until recently the combination of their personality traits provided a means for growth in a stable and placid market. But over the years competition between technical laboratories in The Netherlands has increased. The market is now overcrowded with competitors and profit is no longer a given. To counter this threat both partners have focused on each other’s offensiveness instead of focusing on improving their business.
Finding a solution
Realizing that this behavior may become detrimental to the long-term success of their co-operation the laboratory’s partners solicited the problem-solving skills of a management consultancy firm. They explained their situation and asked the consultants to rejuvenate the now punch-less partnership.
The consultants tried to comply with this request. They interviewed all laboratory employees on their views of the problem. They talked to the laboratory’s customers. Some of them had noticed a decline in customer service because of conflicts between both partners. The consultants talked with competitors of the laboratory. This gained them insight in the laboratory’s business specifics. They also had endless counseling sessions with both partners. To overcome inhibitions some of the meetings were held separately with only one partner at a time. During these meetings both partners could voice their concerns independent of each other.
After a while the consultants thought they had the problem figured out. They thought they knew which partner was right. To the consultants the more ambitious partner made the most sense when he outlined his ideas on company-growth. They liked his ideas and ambitions, so they tried to reason with the other partner to support them as well. In the end a strategy in compliance with these ideas was selected.
While inventing and implementing growth-strategies to revive the laboratory it became clear however that some important issues had been overlooked. Although business had picked up immediately after implementing the advice given, it seemed that the relationship between both partners was still worsening.
In hindsight it is clear what error the consultants had made. They had agreed upon one partner’s point of view after careful deliberation. Correspondingly they tried to convince the other partner that this was indeed the right strategy. By implementing this solution the consultants expected the relationship between both partners to improve. If business would pick up the partners simply wouldn’t have time anymore to focus on each other’s idiosyncrasies.
This however was not the case. During a follow-up meeting even the more ambitious partner voiced his concern on the chosen strategy. Although the consultants had conceptualized his preferred growth-strategy he didn’t notice improvements in the working-relationship between both partners. The laboratory’s business had picked up a little, but the malfunctioning of the co-operation still influenced output negatively.
The consultancy firm needed to rethink its strategy. Was the advice they had given not the best advice possible? If the proposed strategy still worsened co-operation between both partners maybe this partnership should better be terminated. It dawned on the consultants that instead of expert-consultation, in which solutions are prescribed, this problem called for process-consultation. They would have to accompany both partners during the process of recognizing a more fitting solution.
Finding a solution (2)
The consultants re-evaluated what each partner wanted. Translating the ideas of the more ambitious partner into a fitting strategy had not solved the problem at hand. They now realized that revitalization of the co-operation between both partners should have been based on the combination of ideas and notions of each individual partner, just like its success had been based on the combination of their skills and personal characteristics as well.
Once more the consultants analyzed the foundation of the partnership’s success. This time the observations of both partners were taken seriously. During a long period of time the partners and consultants came together to discuss the problem. Failure of the previous solution-strategy was not caused by premature conclusions, since the problem-situation had been analyzed extensively. The solution was only impaired by the consultants’ prepossessed idea of what effective business-strategy implied. To revitalize the partnership co-operation they had listened to both partners. Then they had based their solution-strategy upon the idea that was most appealing to them. Instead they should have evaluated each partner’s individual contribution.
By choosing to ignore the findings of the more moderate partner the basis for the laboratory’s success had been underestimated, since the sum of seemingly boundless ambitions and a countervailing approach had led to a prosperous business in the past. The more moderate partner had weeded out the pitfalls of the innovation-opportunities that his partner invented for instance. If competitors seemed to outsmart the laboratory because of lack in entrepreneurship the countervailing drive for growth from one of the partners had prevented it. This combination of ambition and rationalization had guaranteed business to blossom in the past. It should have been the stepping-stone to a successful partnership in the future.
As a result of the monthly meetings with both partners the consultants proposed a new business-strategy, this time based upon the strengths of both partners. Instead of rigidly maximizing one partner’s influence on business strategy this was now being countervailed by incorporating ideas based upon the personality traits of the other. The consultants advised the laboratory to open up another branch in a neighboring city for instance. This provided a way to channel the need for expansion. Correspondingly it was advised to continue emphasis on the rationalization of the already existing operation. This way expansion could be based on a solid foundation, thereby taking the ideas of the more moderate partner into consideration. On account of this new bipolar business-strategy each partner was forced to focus on his own strengths instead of on his partner’s weaknesses. As a result their relationship should improve.
In the course of time the relationship between both business partners became worse. No matter what strategy the consultants could propose, the fact of the matter is that both partners have grown to dislike each other. The more ambitious partner is tired of always initiating initiative. His partner refuses to contribute anything more than what was minimally obliged. This punchless partnership seems better off terminated.
Instead both parties are bound together under strict legal conditions. An elegant exit-option was left out when the contracts were drawn up several years ago. Voluntary liquidation of the laboratory is impossible since each partner only wants what is best for him. Termination by court order will lead to extensive financial losses. Both parties have therefore decided to continue their co-operation, albeit reluctantly. The consultants involved have been sent home, since neither partner can afford to pay for this service out of his own pockets. Payments from a joint partnership account are frozen because each partner is insecure about the future of the partnership. The laboratory’s work-environment has become ‘explosive’; the partnership may blow-up any time.
Successful partnerships are based on the combination of inputs that each partner offers. Management scientists have shown that co-operation between parties often decreases when time progresses. The partners concerned obtain different viewpoints or interests. Sometimes the partnership simply fails to accommodate the purpose for originally establishing it. If everything is taken into stride to rekindle faltering co-operation this case study can offer some lessons.
In this case study it is striking that the initial analysis of the problem-situation was correct. The co-operation between both business-partners needed revitalization since ‘the chemistry’ underlying its success was gone. Operating on the premise that improved business results would lead to a better working relationship the consultants involved focused on redefining the laboratory’s business strategy. A decline in profits had been the reason for their involvement in the first place.
Although this strategy turned out to be a success on economic criteria, it didn’t solve the real problem the consultants were hired for. Decreasing financial results were just symptomatic for a much bigger problem: fit-less co-operation between both partners. To solve this problem focusing solely on the ideas of one of the partners meant a wrongful appraisal of this client’s needs. Only after a thorough re-evaluation of the problem-situation the consultants managed to find a fitting solution. Because of the relationship between both business partners this solution hasn’t been implemented. Polarization of viewpoints has led to the freezing of all but day-to-day activities. It is only a matter of time before the partnership will terminate permanently.
This leads to the following observations:
Refrain yourself from coming up with premature solutions to unclear problems. Ask yourself whether the proposed solution really solves the problem. Are you sure that you are not just obscuring symptoms?
Only solutions that all partners involved agree upon and commit to have a chance of succeeding
All-encompassing strategies that humor all stakeholders involved are likely to end up ‘stuck in the middle’
Take the ideas and notions of each party involved into account, because overlooking some will frustrate the results
Create a productive working-relationship between all partners involved as quickly as possible, in order to stop day-to-day-to-day business from suffering from the problems at hand
Appraise your clients’ needs in the same way as they do. Solving a problem that your clients perceive as peripheral will almost certainly lead to disappointing results, because they’ll only commit to your solution half-heartedly
Even after finding a fitting solution incidents may occur that change everything
If everything is taken into stride to rekindle faltering co-operation the presented case study can offer some lessons
Author; Lisa van de Bunt
Kennisbank onderwerpen: Fusie