When Business Owners Do Not Speak to One Another

It is often said that being in a business is like being in a family. There are purported “one-big-happy” families. There are also dysfunctional families. And it is the same with businesses. When owners of a business stop speaking to one another, it is no different than when family members stop speaking to one another, and the business often becomes dysfunctional. The reasons for cutting off communications are emotional and complicated. There are usually good and logical reasons for communication to continue, but these reasons are not strong enough to overcome the emotions causing the cutoff.

Owners of a private business typically are the policy decision-makers for the business. When owners stop having conversations, the decision-making function becomes more difficult. In some cases where businesses are operated with separate divisions or departments, those functions can continue on a short-term basis. But for the long term, when business owners quit communicating, it suggests a result where the owners not communicating will no longer be in business together.

So when the cutoff in communication begins what are the owners in dispute and the other owners to do?

Initially, it is important to respect the complexity of the problem. Rarely is it appropriate to call the situation “silly” or attribute the actions to “pride” or “stubbornness.” There are cases where issues can be discussed after a cooling-off period, and, if so, so much the better. However, the fact that a cutoff has occurred indicates significant emotional trauma in the relationship. That cannot be ignored.

In my experience, the source of many business controversies has to do with the real or imaged betrayal of a party where the betrayed party has perceived, rightly or wrongly, a value of the other party that has been misrepresented or dishonored. This betrayal is often one perceived by one party and not by the other, who then feels betrayed by the one party’s perception of the betrayal. This happens when owners do not have candid and sincere conversations with one another about their values. These value conversations should not be about general allegiance to certain moral values but expressing personal values with specific application to the business. These are difficult conversations, and the owners often do not have the skill or the inclination to have these conversations about values.

Because the problem is complex, it will not be solved quickly or easily. The overall solution to the problem may be possible, but it will not be accomplished in the short-term. The practical aspect and the tact to take is to see what can be accomplished notwithstanding the cutoff in communication. If the cutoff causes a deadlock in decision making, the possibility of legal action becomes greater. In most states, the result of business dispute litigation involving deadlock situations is liquidation of the business – a very negative result. Therefore, all measures should be taken to avoid a deadlock situation.

If there is planning in place, the execution of the current plan should continue as much as is possible. In the long term, the plan will have to be revised, hopefully with the policymakers communicating, but if that is not possible, planning must continue. If there is no planning in place, the fact of the cutoff mandates that a plan be implemented considering the circumstances of the cutoff.

Given that policymakers should be setting goals and that goals are set based on values of the owners articulated to one another, owners who are not communicating will make that task more difficult. Owners not involved in the dispute may be able to function as messengers and make the necessary communication possible. The strategic (long-term) course of a business will depend on the alignment of the values of the owners. If these values cannot be in alignment, the planning must consider that. If the planning ignores that misalignment, the execution of the plan will not be successful.

Often the involvement of an independent third party is helpful. Involved professionals rarely can accomplish the independence that is needed to communicate with all perspectives in an ownership situation. A professional, such as an accountant or a lawyer, even if not previously involved, will still have issues of conflict of interest and professional confidences that must be maintained. A consultant can intervene in an ownership situation from the perspective of one who will keep no confidences – with all parties duly warned that something shared with the consultant will be shared will all involved. This transparency is often the path to some consensus which can be the beginning of the implementation of an effective plan.