For this post, we took the question below and reached out to multiple serial entrepreneurs and investors to offer you, the reader, a diversity of informed perspectives.
Organizations evolve, people grow apart and sometimes things get messy. How do you handle this stuff founder-to-founder, in front of your employees and your investors?
…Founder conflicts are far more common that people think. It is a rare company that still has all of its founders involved by the time it is sold or goes public. The key to successfully resolving founder conflicts is to agree on a fair process. Sam Altman of Y Combinator likes to say that founder conflicts arise when one of two things happen—either the founders want different things for the company, or they want the same thing for themselves. Either way, it is impossible for both parties to get what they want. A decision that makes one party happy is likely to leave the other party fuming. Agreeing on a fair process in advance allows the founders to resolve the conflict (which is essential) but in a way where both parties can live with the resolution.
It’s also important to avoid fighting in front of either your employees or your investors. This isn’t because you’re trying to hide something from them; it’s because they can’t do anything useful to resolve the conflict, making their involvement a distraction to them and you. If you can’t resolve the issue on your own, find a third party who all the people involved trust. This person should have the ability to remain objective and act as a referee to make sure that the process is followed. Do not force this person to be the judge; it’s unfair to abdicate your responsibilities as founders to someone else. Their role is to facilitate, not to decide.
The key to successfully resolving founder conflicts is to agree on a fair process. Tweet This Quote
…There are two components to this question, and the way they fit together depends on each other. The first is handling how people grow apart and dealing with messy things as co-founders, and the second is how they do it within the context of their stakeholders—their employees and investors. Co-founders need to figure out how to have the crucial conversations with each other first with integrity and honesty because how they interact with each other will set the tone when the conversation widens. They can do it with integrity or in acrimony, and the former will be much better than the latter. It’s important to get whatever assistance they need to understand their own perspectives. Like couples in a marriage going through a tough spot, mediation can be a significant asset.
This kind of assistance supports a productive conversation so they are clear, and more importantly, clean about their differences. Clean means getting the history and positioning out on the table and eliminating as many subversive dynamics as possible because those poison the broader conversation with investors and employees. Then having the conversation with employees and investors becomes a matter of integrity and transparency, and a good design of how and when and what outcomes are desired actually becomes possible.
Co-founders need to figure out how to have the crucial conversations with each other first with integrity and honesty. Tweet This Quote
…NEVER make this personal. Don’t discuss issues you have with your co-founder in public. Instead, always make the discussion entirely about business objectives. Present a list of things the business needs to achieve to succeed. Simply state that these things aren’t getting accomplished, and the business needs to find people who will achieve those objectives. People can always argue about your opinion of another person, or your ability to get along, but completing business goals and tasks is much more black and white and makes it obvious when someone on the team doesn’t belong there anymore.
Never discuss issues you have with your co-founder in public. Instead, always make the discussion entirely about business objectives. Tweet This Quote
Pascal Finette, serial tech entrepreneur, Managing Director of Singularity University Labs, coach and speaker wrote…
…First of all, you never handle these kinds of conflicts in front of your employees or investors. The old saying, “When mommy and daddy are fighting, the kids are crying” is as true here as it is at home. Secondly, stuff like this happens. Relationships are complex and building a company together is probably the most stressful thing you can do.
Having said that, it’s best to quell these issues before they become actual problems. Establish ground rules for the way you want to communicate with each other; create your “social contract” by making the implicit explicit and writing down all the things you need from each other as well as the things you can’t stand. Then, find time to talk about your relationship (on a regular basis) and focus this time on your relationship—not the business.
Relationships are complex and building a company together is probably the most stressful thing you can do. Tweet This Quote
…I’ve rarely had emotions run as high and wild as they have when we as founding partners find ourselves at odds. There’s no use in pretending that it’s not happening or trying to dress up the foul behavior as something pretty. The trick is balancing transparency, honesty and respect for other people’s time and interests. It’s best to be plain and bare, sit up in front of your company, your colleagues, your investors, your business community, and say, “This is what’s going on.” It’s best to be humble and do it together, saying, “We are obviously having our differences, but we’re working on it, and when we figure out what it means for the future of the business, we’ll let you know.”
But it’s not best to pull other people into the drama. People need to know what’s going on, and they may need to express how it’s affecting them, but it’s best not to take up all their time and energy with helping you process what’s going on. They have work to do and probably don’t care about your particular ups and downs. Organizational development consultants can help hugely with this type of transition and the skillful communication it requires. It’s an opportunity to model for your employees, colleagues, investors and business community what it means to be kind, generous, direct and not lose perspective and humor when things get tough. Because things always do get tough at some point for everyone.
Founder conflict is an opportunity to model skillful communication. Because things always do get tough at some point for everyone. Tweet This Quote
Have you experienced a founder conflict? Is there anything missing from this post? Please share your comments and lessons learned below!