4 Tips on How Do You Deal With a Toxic Business Partner?

1. Anticipate conflict and resolve it before the conflict occurs, 2. Slow down and remember the big picture, 3. Listen to the partner in a calm environment, 4. Contact outside parties for assistance.

Ezra and Ashton are business partners in a talent agency called Stars to Be in Los Angeles, California. The two retired Hollywood actors starred in films together in the 90s and came together as business partners last year. Ashton and Extra found common ground in starting a rapidly growing, unique talent management service. They both sought to guide young actors in their careers, help them deal with the industry’s adversity, and make a profit.

Ezra and Ashton signed their partnership agreement, registered Stars to Be, and enjoyed immediate success based on their reputations. At first, the company operated smoothly, the clients were pleased, and Ashton and Ezra made a lucrative profit. However, while both men were happy with the agency’s rapid climb to success, they also felt pressure to keep things going and sign more and more clients. When the pressure became too much, things began to change.

As business boomed and the two men hired more and more employees, Ezra began acting unprofessionally. Ezra demeaned Ashton in meetings, questioned his choices, and even attempted to steal his clients. When Ashton tried to communicate with his partner, Ezra told him that since he was more famous, he should get to do whatever he wanted.

At first, Ashton blamed himself. However, he quickly realized that although Ezra enjoyed the firm’s profits, he rarely worked. Ezra only came into the office when bored, often meeting clients at his house. He went on lavish vacations while Ashton worked long hours and then criticized Ashton when something didn’t go right. Ezra ignored Ashton’s calls and meeting requests, saying there was nothing to discuss.

Although profits remained high, Ashton was at his wit’s end. He tried to plan one last meeting with Ezra, who did not show up. Ashton began considering either removing his partner or trying to dissolve the partnership. He wondered how things had grown so bad so quickly and asked himself repeatedly: had he not dealt effectively with his toxic business partner?

Sharing responsibilities with a business partner is as rewarding as it is challenging. Unfortunately, personality conflicts occur at every level and industry, even when business is excellent. The key for business partners is knowing how to deal with conflict and toxic business partners.

No business partners anywhere in the world get along 100% of the time. However, the best partners learn to work together and allow their unique skills to complement each other. Intelligent partners know that companies succeed based not only on progressive ideas and hard work but relationships built on respect and equity.

While it is impossible to always agree with a business partner, one can take steps to make successful business relationships last and mend fractured partnerships. In this article, we will discuss four strategies that can both prevent disagreements and help to repair partners’ relationships. These include:

Communicating directly and listening
Avoiding judgment and negative behavior
Planning for conflict
Seeking outside help for lasting conflicts

Even partners involved in the most dramatic disagreements can often overcome negativity, blame, and apathy and regain company unity. Business partnerships can be rewarding and successful when business partners respect and appreciate each other’s differences, allow their skills to complement each other’s, and work hard for the sake of the business.

Additionally, not all business partnerships are conflicted. However, even if one’s business is running smoothly, minor and major disagreements are inevitable. Business partners work closely together and endure unique pressures as a unit. Within these circumstances, often grudges and animosity develop. When emotions take hold of a partnership and one partner grows jealous, a conflict is sure to gain steam. When a lot of money is on the line, and the pressure is high, the chance of an argument breaking out is even higher.

When business partners learn how to deal with conflict, they keep their companies on track. Partners who know how to handle adversity are ahead of the game. All conflicts can be resolved somehow, but the key is understanding that each unique problem requires a specific solution.

In this article, we will go over four ways business partners like Ashton and Ezra can overcome their differences and keep the business moving forward, even when one partner behaves poorly. Toxic business partners will always exist, so it is best to understand how to deal with them directly.

Anticipate Conflict

Many entrepreneurs can sense conflicts coming. When business partners understand each other’s personalities, they can anticipate when emotions might surface.

For example, Tim and Jay are in business together. They run a hot dog stand on the beach in Malibu, California. The two partners have known each other for six years, enough time to comprehend each other’s personality quirks. Jay knows, for example, that Tim is a hard worker but also a narcissist who enjoys attention. So when the Malibu Times interviews Jay for their “food issue” and not Tim, Jay instantly knows a conflict is inevitable. To avoid an argument, Jay ensures that the newspaper also interviews Tim. Jay also makes sure that the picture in the newspaper features both partners.

Not all business partners know each other as well as Tim and Jay, especially if the relationship or business is new. However, most intelligent entrepreneurs can sense when a topic might trigger a disagreement and then attempt to avoid it.

One of the most common conflicts among working partners stems from a perceived unfair workload. If one partner feels like shouldering more of the load than the other, that partner can quickly grow resentful. Often, this disagreement pops up when the business enters a busy season or phase.

For example, Sara and Jess run a Christmas tree farm in Lake Tahoe, California. Each year, business surges in late November and continues through the holidays. Sara handles the register, and Jess works out on the farm, assisting customers and cutting down trees for them. In prior years, Jess has spent the busy season working extra hard and returning home each night with a sore back and scraped hands. She has also grown resentful of the company’s division of labor and of Sara’s time in the warm farmhouse, chatting with customers as they check out. Jess’s husband has even suggested that Jess make more money based on her hard labor. While the two women have never “fought,” they end up arguing during the holidays each year.

This year Sara anticipates the problem before it occurs. She sets up a meeting with Jess to discuss the best way to handle the busy season at the tree farm. Jess voices her concerns, and the two women set out specific responsibilities they agree on. Ultimately, Sara decides to help Jess in the fields a few days a week. The division of labor is settled, and everyone is happy.

The key to avoiding conflict among business partners is sometimes to use foresight. First, anticipate the potential for disagreements and then confront them early so they do not fester.

Slow Down and Remember the Big Picture

Small business owners must make new decisions each day. While newer businesses struggle more with important decisions because they lack experience, all companies struggle to find the most profitable, successful path forward. When companies are comprised of diverse personalities, decisions can quickly become overwhelming.

Business partners are often a necessity for small businesses. While sole proprietorships remain an option, general partnerships offer a chance for entrepreneurs to share in funding the business. However, sometimes partners’ contrasting points of view can complicate the decision-making process.

Much of running a business depends on choices, and sometimes the choices a small business must make are both personal and intimidating. Partners disagree on an issue that can halt the company’s progress, alienate the partners, and even turn clients and customers off. However, sometimes these disagreements seem inevitable.

The best way to deal with difficult decisions, especially decisions that can potentially divide partners, is to slow down and look at the big picture. Instead of letting the emotion and pressure of the situation cause partners to behave negatively, pause for a moment. Consider the other partner’s position and why they feel this way. Are they convinced that making the “right” choice is best for the business? Then, ask yourself the same question.

Business partners cannot always solve their disputes, but viewing them with a sense of “big picture” perspective can take the sting out and allow both sides to understand each other better. Take the time to discuss the matter with your partner, regardless of the reason for the hold-up. While it is true that business partners must make some decisions quickly, there is usually at least enough time for a quick meeting. Business partners can ask themselves and each other these questions and then reevaluate the impending choice:

What is the rationale behind my decision?
What is the reasoning behind my partner’s decision?
Are we both putting the company first, or are we placing ourselves first?
Is there a middle ground where the parties can meet?
Are we considering and valuing opinions or speaking over each other?
Do we still have a shared vision for the company?
How can we move forward?
What is the timetable for this decision?
How important is this decision in the big picture of the company?
Is this disagreement based on the decision, or is it based on the behavior of a toxic partner?

Do not let the stress of important decisions damage the company. While most partners accept that a certain amount of pressure comes with running the business, too much stress dooms the company and fractures relationships. Instead, individuals should openly communicate how they feel to their partners and strive to reach a compromise.

Also, remember the big picture. Business partners create companies based on a shared vision for profits and success. So continue to believe in the business’s potential, and try to see and understand the other partner’s viewpoint, strengths, and belief system.

Realistically, sometimes partners cannot achieve compromises. Sometimes, partners must recognize that the disagreement over a decision is not about the business decision but a toxic partner’s behavior. If this is the case, the partner must decide the toxic partner’s future with the company.

For example, Vivian and Betsy run a fashion boutique in Los Angeles, California. During the first year, the small business is struggling, and both partners stress about being able to pay the bills. Then, out of the blue, Vivian gets a call from a store in San Diego that wants to partner up with the women’s LA boutique. The terms of the deal are excellent, and the offer would inject a wealth of much-needed capital into the business.

Vivian is all for the partnership, but Betsy refuses to deal with the other store. She gives multiple reasons, such as that they will be “selling out” and the other store is not as stylish or hip. However, Betsy’s behavior has been problematic for a few months, and Vivian suspects that Betsy does not want their business to succeed. Vivian thinks that Betsy doesn’t enjoy running the business and wants their store to fail so she can return to school.

Vivian meets with Betsy and confronts her toxic behavior. Betsy admits that she hates working at the store. Since the two women cannot come to terms, Vivian is open with Betsy: she will accept the offer and buy Betsy out. Then, she will find a new partner. Finally, the two women find a way to part on good terms and wish each other luck.

Business partners must understand where each other comes from and see the big picture. There is usually a reason why the partners started the company in the first place, so try to return to that shared vision and speak openly and honestly. When partners value each other’s opinions instead of ignoring them and focusing only on themselves, there is usually a path forward.

Commit to Understanding the Toxic Partner’s Situation

We have all been in difficult positions, and we have all made mistakes. Likewise, we have all gone through periods of adversity during which we had trouble being our best selves. One’s business career is no different.

Often, business partners are stressed out and busy, even when the company is performing well. Sometimes, busy periods impact our moods and behavior because there are so many issues to think about at once. Many partners take it personally when the company is struggling and become either overly emotional or closed off.

Therefore, when one partner is behaving poorly, it is sometimes because they blame themselves for the company’s problems. For example, some people are savvy negotiators or talented entrepreneurs but cannot cope with their emotions. On the other hand, some business partners bottle everything up and struggle in the office and in their personal lives.

Sometimes, dealing with a toxic partner is as easy as sitting down, quieting, and listening. A dispute-resolution tactic commonly used in the corporate world consists of listening.

Try sitting down with your partner and agreeing not to speak for a set time. During these two to four minutes—or whatever the partners choose—simply listen to the person’s view. The toxic partner may begin slowly, but once they have the floor, they usually open up and vent. Suddenly, the other partner understands why they have been acting differently and can react patiently.

High-performing business firms around the world use this simple exercise as it helps calm partners down while providing new insight into their personalities. Listening is one of the ways to resolve conflict and understand the impetus for a partner’s actions, as opposed to simply saying “that person is toxic” and shutting down. This exercise can also prevent resentment and anger from not only forming but being perpetuated.

For example, Nick and Liza run a bowling alley in Encinitas, California. After a particularly busy summer, Nick begins snapping at Liza, showing up late, and making obvious errors. Since her livelihood is at stake, Liza’s first reaction is to grow angry. She even shouts at Nick when he forgets to charge a party of four, making the situation much worse.

Liza networks with some of her peers, and one woman suggests a listening exercise. When Liza gives Nick five uninterrupted minutes, he admits to Liza that his wife is pregnant and worries about having enough money to support the family. At the same time, his elderly father is sick, and Nick has been caring for him in the morning, hence his late arrival.

Overall, the two partners have a compassionate exchange and make some changes to the business. Nick will come in later, but he will also take on more responsibility to make more money; the partnership agreement will need updating. Nevertheless, the business continues, and the partners have never been closer.

Active listening might not be the all-inclusive remedy for all business disputes or toxic partners. Still, it is an effective tool that has helped many businesses resolve their interpersonal issues.

Contact Outside Parties for Assistance

Many business partners view “asking for help” as a sign of weakness or an added complication they simply do not need. However, we live in a world with licensed professionals ready to help. Why not contact them?

Realistically, if one business partner is involved in a toxic dispute with another, all the listening in the world may not help them see eye-to-eye. The debate will continue to bounce back and forth because there is no point of reference.

However, bringing in a neutral third party can change the dynamic of the dispute. Many company partners succeed with professionally trained mediators to handle disputes.

The mediator often encourages quicker resolutions by providing an unbiased view of the problem. Usually, both partners listen to an individual who has no interest in the disagreement and holds no sense of favoritism towards either side. Mediators provide fresh eyes on the issue and follow up with a brand-new perspective.

Once the parties hammer out a compromise, a mediator can review it to ensure it works to their advantage. Mediators enhance negotiation simply through their presence and help eliminate anger and vitriol from the room. Even the most toxic partners usually do not want a stranger to hear them hurl insults, complain or play the “blame game.”

Sometimes, a professional mediator is the best bet, but mediators can be colleagues or friends. However, remember that the mediator’s most important qualifications are neutral and unbiased.

Need Help Dealing with a Toxic Business Partner? Contact Nakase Wade

In life and business, conflicts are unavoidable. However, business partners cannot allow toxic partners, poor behavior, and business disputes to damage the companies they have worked hard for. Hopefully, the above tips will help you solve the problems hampering your business and allow your company to succeed.

For further help with business partnership disputes, questions about dealing with toxic business partners, or legal questions of any nature, contact Nakase Wade. Our business partnership dispute lawyer offer free consultations, and we look forward to using our legal experience to get your company back on the right track.

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