How do I resolve a disagreement with a business partner?

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Business partners disagree all the time. It often leads to a healthy discussion of potential solutions, but sometimes can degenerate into a conflict that derails the business. Here are some ideas for maintaining a positive, productive relationship.

When you disagree with a business partner about a strategic or tactical business decision, here are a few techniques to achieve a positive outcome for the business. This will help de-escalate the conflict by removing the emotion, as well as provide a way to measure the decision’s results to reduce future conflicts.

Avoid Confirmation Bias

Entrepreneurs are naturally driven and strong-willed. While these are usually strengths, they can create conflict when they lead to stubbornness or closed-mindedness. For example, if you strongly believe you know the best way to solve a problem, are you open to alternative ideas? Or, do you focus solely on convincing your business partner that you are right?

Confirmation bias is the natural tendency to favor your pre-existing beliefs. It causes a person to downplay or ignore information that contradicts their beliefs rather than being open to different perspectives.

To avoid confirmation bias, ask questions of your business partner with a genuine curiosity about the answer. At a minimum, your partner will know that you’re listening to them and value their perspective. At best, you will trigger a brainstorming process that results in a better solution than either partner originally thought of.

Focus First on Goals and Assumptions

Conflicts often result from business partners having a different understanding of the goals and assumptions. A disagreement on the best solution for a problem may actually be the lack of a shared understanding of the problem being solved.

For example, let’s say you want to close your business on Mondays because it’s your slowest day. Your business partner wants to remain open. The goal might be to increase profitability, reduce staff, improve work/life balance for the partners, or something else. Start by defining the shared goal and then brainstorm potential solutions based on that. If the goal is improved profitability, closing on Mondays might be a good solution but there may be better ways to achieve that goal.

Assumptions work the same way. Perhaps one partner assumes closing on Mondays will improve profitability, while the other assumes it will alienate loyal customers and ultimately hurt profitability. Talking through the assumptions will ensure a shared understanding of the basis for a partner’s proposed solution. This does not mean agreement, but understanding is the first step towards agreement.

Analytics as a Third “Business Partner”

Business intelligence tools can provide a unique, unemotional perspective on business decisions. So when there is a disagreement about raising prices, adding a new product line, changing store hours, and so on, let the data provide the answer so you can move forward with a decision. This approach is especially helpful in validating the assumptions behind each proposed solution.

You should also use analytics to measure the results of the decision, which can then inform future decisions in that aspect of your business. This approach can hopefully reduce future disagreements since it provides a methodology for making decisions and measuring their success (rather than relying on “gut feel”).

The key is to define your success metrics in advance so you have something to measure against after the decision is implemented. For example, if you decide to extend your store hours on weekends, you should define expectations for the increase in revenue from those hours as well as the minimum acceptable profit margin. This way, you can determine if the change was successful using a measurable, unemotional approach.

Next Steps

Most disagreements can be resolved if the business partners are willing to (1) recognize and actively avoid cognitive bias by asking questions with genuine curiosity, (2) clearly articulate goals and assumptions (not just solutions) to ensure alignment, and (3) use analytics to provide an unemotional perspective and to measure the outcome to inform future decisions.

Also, if you use Square or Clover, take a look at Sprk™ to help make better-informed decisions. Otherwise, make sure your analytics tool is designed for decision-making rather than for accounting (most of them are not) so you make the best-informed decisions about your business.

Next Up: How do I choose a Business Intelligence (BI) tool for my business?