WEBVTT - EP 113 | How to Handle A Dispute With A Partner 0:00:11.060 --> 0:00:15.230 Let's talk about how do you settle a dispute with 0:00:15.230 --> 0:00:20.090 your partner? Now, I work with thousands of business owners. 0:00:20.090 --> 0:00:25.189 We have a company with all sorts of different partnership agreements. 0:00:25.190 --> 0:00:27.830 We own businesses. And this is one of those tricky 0:00:27.830 --> 0:00:30.590 things that a lot of stuff goes behind the scenes, 0:00:30.620 --> 0:00:33.710 goes on behind the scenes as it relates to structuring 0:00:33.710 --> 0:00:36.650 partner agreements. And we give a lot of advice around 0:00:36.680 --> 0:00:39.770 how do you enter a relationship where both parties are 0:00:39.770 --> 0:00:43.070 excited about it, but also know what the structure looks like? However, 0:00:43.070 --> 0:00:46.010 we've never really created content around what happens when there's 0:00:46.010 --> 0:00:48.170 a dispute. What do you do when there's a falling out? 0:00:48.200 --> 0:00:53.270 Especially when there's family involved? I happen to work alongside 0:00:53.270 --> 0:00:56.360 my business partner and also my life partner who is 0:00:56.360 --> 0:01:00.560 my husband, and we have this very clear process that 0:01:00.560 --> 0:01:03.860 we go through. If ever there's an issue that we're encountering, 0:01:03.860 --> 0:01:06.140 and we use the same process with all of the 0:01:06.140 --> 0:01:10.700 partners that we have inside our portfolio to just navigate 0:01:10.700 --> 0:01:13.070 the disputes or the issues or the frustrations that can 0:01:13.069 --> 0:01:15.770 come up. Because if you're growing your business, there are 0:01:15.770 --> 0:01:18.080 going to be issues like, I'm just going to say it, 0:01:18.110 --> 0:01:20.630 say it bluntly. If there are issues or if you 0:01:20.630 --> 0:01:22.580 want to grow your business, there are going to be issues. 0:01:22.580 --> 0:01:24.560 So if you know that they're going to be issues, 0:01:24.560 --> 0:01:28.309 you have to have a mechanism for handling what those 0:01:28.310 --> 0:01:31.130 issues are. And it can't just be about feeling, it 0:01:31.130 --> 0:01:34.580 can't be about emotion, because all of those things distract 0:01:34.580 --> 0:01:36.230 from what you're trying to do, which you have to 0:01:36.230 --> 0:01:37.940 remember what you're trying to do. Why did you start 0:01:37.940 --> 0:01:42.770 this business? You started it likely because you wanted to grow. 0:01:42.770 --> 0:01:45.679 And so I want to walk you through our process 0:01:45.680 --> 0:01:49.280 for when there's an issue, when there's a frustration inside 0:01:49.280 --> 0:01:51.920 a partnership that either we have or maybe even I'll 0:01:51.920 --> 0:01:55.340 give you some examples of our own frustrations inside our 0:01:55.370 --> 0:01:57.950 own partnership, which might get a little juicy, but don't worry, 0:01:57.950 --> 0:02:01.070 Brandon's on board with me sharing, so let's dive into it. 0:02:01.100 --> 0:02:04.250 My first piece of advice on bringing up any sort 0:02:04.250 --> 0:02:07.010 of issue that you're running into with a partner is 0:02:07.010 --> 0:02:09.680 that you do everything that you can in preparation for 0:02:09.680 --> 0:02:14.300 this conversation, to use facts instead of emotion. Now, it 0:02:14.300 --> 0:02:17.000 shouldn't feel like a dissertation of these are the 45 0:02:17.000 --> 0:02:20.630 things that you've done wrong. However, you should know what 0:02:20.630 --> 0:02:23.300 your numbers are. You should know the details of whatever 0:02:23.300 --> 0:02:25.940 the exchanges that you're frustrated with. You should really be 0:02:25.970 --> 0:02:28.130 able to come to that meeting prepared to talk about 0:02:28.130 --> 0:02:31.760 a very specific list of things. Don't throw every single 0:02:31.760 --> 0:02:34.760 issue in the petty little stuff, ideally, is just not 0:02:34.760 --> 0:02:36.800 even talked about. It's not. You're not worrying about the 0:02:36.800 --> 0:02:41.030 petty stuff, but the big things need to have great 0:02:41.030 --> 0:02:44.929 documentation and great preparation so that you're not winging it. 0:02:44.930 --> 0:02:47.810 And I can speak from personal experience on this whenever 0:02:47.810 --> 0:02:52.669 I'm emotional about something and I'm emotional about partnerships, not 0:02:52.669 --> 0:02:55.160 all the time, but it happens from time to time. 0:02:55.160 --> 0:02:58.070 There was an instance that happened within the last three 0:02:58.070 --> 0:03:00.680 months that I was very emotional about, and I was 0:03:00.680 --> 0:03:05.690 frustrated with the situation, and I knew that despite me 0:03:05.720 --> 0:03:08.330 wanting to call the person up right in the middle 0:03:08.330 --> 0:03:12.740 of my frustration and my irritation and my overwhelm, I 0:03:12.740 --> 0:03:15.110 knew that I just needed to wait and to get 0:03:15.110 --> 0:03:17.780 every detail that I needed to have in order to 0:03:17.810 --> 0:03:20.570 properly have the conversation, because if I would have just 0:03:20.570 --> 0:03:23.240 called them when I was emotional, it would have turned 0:03:23.240 --> 0:03:26.420 into this big nasty fight. And I don't know about you, 0:03:26.419 --> 0:03:28.520 but I hate getting in fights with people. I don't 0:03:28.520 --> 0:03:31.489 like being frustrated. I don't like people not liking me. 0:03:31.490 --> 0:03:34.820 I just want to go through every single day being 0:03:34.820 --> 0:03:37.850 excited about where we're going, pushing towards the target, being 0:03:37.850 --> 0:03:40.910 hard on the team so that everybody can achieve their goals. 0:03:40.910 --> 0:03:42.770 And when you have these issues and you bring emotion 0:03:42.770 --> 0:03:47.450 into it, it clouds everything else. So huge recommendation here. 0:03:47.450 --> 0:03:52.220 Use facts and if you're emotional, wait. Just wait to 0:03:52.250 --> 0:03:56.330 have the conversation. Okay, now the second piece. Let me 0:03:56.330 --> 0:04:00.380 just consult my notes here. This one's important. When you 0:04:00.410 --> 0:04:02.930 come into an agreement with a partner, it's not likely 0:04:02.930 --> 0:04:05.480 that you were really clear on who was doing what 0:04:05.480 --> 0:04:08.900 in terms of job descriptions or roles and responsibilities. Now, 0:04:08.900 --> 0:04:12.740 there might have been like, vague communications around this, but 0:04:12.740 --> 0:04:17.060 the things that you're fighting about probably aren't documented anywhere. Meaning, 0:04:17.060 --> 0:04:19.130 if I'm fighting about something that I thought I was 0:04:19.130 --> 0:04:21.710 supposed to be doing and they're doing something that they're 0:04:21.710 --> 0:04:24.140 not supposed to be doing, but it's involving me, or 0:04:24.140 --> 0:04:27.289 maybe it's involving my team. The nuances of that probably 0:04:27.290 --> 0:04:31.310 wasn't documented anywhere. So when I'm preparing for a conversation 0:04:31.310 --> 0:04:34.099 like this, I want to get really clear about, hey, 0:04:34.100 --> 0:04:37.280 what's my role in this situation? If I'm the president 0:04:37.279 --> 0:04:41.210 of Cardone Ventures, what is the president's role in the business? 0:04:41.240 --> 0:04:43.820 What is the purview of the decisions that I should 0:04:43.820 --> 0:04:46.040 be making? So let's say Brandon and I are having 0:04:46.040 --> 0:04:49.010 a discussion and we're frustrated because he's stepping on my 0:04:49.010 --> 0:04:52.039 toes or I'm stepping on his toes and the business 0:04:52.040 --> 0:04:55.430 just feels hard. And we're married, but we're also partners. 0:04:55.430 --> 0:04:57.440 What I'm going to do is I'm going to say, okay, 0:04:57.440 --> 0:05:01.190 as president of Cardinal Ventures, this is what I'm responsible for. 0:05:01.190 --> 0:05:05.570 My understanding as CEO is this is what you're responsible for. 0:05:05.570 --> 0:05:10.220 You are encroaching on my responsibilities. So is it because 0:05:10.220 --> 0:05:12.050 you don't trust me in this area? Is it because 0:05:12.050 --> 0:05:14.719 I don't have statistics in this area? What is causing 0:05:14.720 --> 0:05:18.140 you to not focus on your job, but do my job? 0:05:18.140 --> 0:05:21.919 Or if the opposite is taking place? Let's say I'm 0:05:22.070 --> 0:05:25.279 negotiating some deal and I didn't bring Brandon into the 0:05:25.310 --> 0:05:27.530 into the deal. And it was something that he was 0:05:27.529 --> 0:05:30.470 supposed to be working on. I bypassed him for some reason. 0:05:30.470 --> 0:05:32.180 I would have to then look at his job description 0:05:32.180 --> 0:05:35.060 and say, yeah, you're right, I did that. And let's 0:05:35.060 --> 0:05:38.299 say I, I frustrated him in the process because I 0:05:38.300 --> 0:05:39.740 didn't keep him in the loop. And then he looked 0:05:39.740 --> 0:05:42.620 silly talking to somebody else I would have to own. 0:05:42.650 --> 0:05:46.070 You're right. I did do your job. And in our 0:05:46.070 --> 0:05:49.909 little scenario, what would be really important is for me 0:05:49.910 --> 0:05:51.500 to say, I don't want you to have to do 0:05:51.500 --> 0:05:53.870 those things any longer, because I think I can handle them. 0:05:53.870 --> 0:05:56.090 And I'd like to take that off your plate. But 0:05:56.089 --> 0:05:57.799 if I didn't communicate that ahead of time and we 0:05:57.800 --> 0:06:01.670 didn't get clarity on who's responsible for what and why, 0:06:01.670 --> 0:06:04.969 the stepping on toes is taking place, that's where all 0:06:05.000 --> 0:06:07.640 of the frustration lands, and that's where all the emotion lands. 0:06:07.640 --> 0:06:12.140 So having these job descriptions, although it sounds ridiculous, is 0:06:12.140 --> 0:06:16.520 so beneficial to constructively moving the conversation forward. Because if 0:06:16.520 --> 0:06:20.180 you believe in your partnership. Most partnership conversations end in 0:06:20.180 --> 0:06:24.830 fights about money. So if it's how you're managing expenses, 0:06:24.830 --> 0:06:28.250 if it's what your travel and expense policy looks like, 0:06:28.250 --> 0:06:31.099 if it's how you're taking and distributing cash out of 0:06:31.100 --> 0:06:34.700 the business, all of those financial components, if you're the 0:06:34.700 --> 0:06:37.760 person that's responsible financially for the organization, then you should 0:06:37.760 --> 0:06:40.700 have clear documentation and policies in place, and that is 0:06:40.700 --> 0:06:43.820 in your purview. Ideally, you guys aren't 50 over 50. 0:06:43.850 --> 0:06:45.800 And this is where we we have the most issues 0:06:45.800 --> 0:06:49.729 with business owners. They got into a partnership agreement. They 0:06:49.730 --> 0:06:54.020 were 50 over 50. Everything was lollipops and rainbows and 0:06:54.020 --> 0:06:57.890 fantastic at the start. And all of a sudden they 0:06:57.920 --> 0:07:01.099 are fighting because they don't see eye to eye, and 0:07:01.100 --> 0:07:02.779 the 50 over 50 doesn't allow one of them to 0:07:02.779 --> 0:07:04.850 have more say than the other. This is where you 0:07:04.850 --> 0:07:06.920 have to use the job description to say, hey, I'm 0:07:06.920 --> 0:07:08.780 proposing that this is my role and that this is 0:07:08.779 --> 0:07:11.179 your role, and we have to figure out who is 0:07:11.180 --> 0:07:14.630 actually responsible for making these decisions. Because the only thing 0:07:14.630 --> 0:07:16.280 what is this saying? I'm going to mess it up. 0:07:16.280 --> 0:07:21.290 The only thing worse than a bad general is two 0:07:21.320 --> 0:07:26.000 good ones. The only thing worse than one bad general 0:07:26.000 --> 0:07:28.880 is two good generals, because you can't make a decision, 0:07:28.880 --> 0:07:31.520 and then you're gridlocked and no one knows who to 0:07:31.550 --> 0:07:33.350 go to for what. And it feels like mommy and 0:07:33.350 --> 0:07:37.940 daddy that kills the growth inside a business. Okay, so 0:07:37.940 --> 0:07:40.940 the next thing after you have your prep, you have 0:07:40.940 --> 0:07:44.780 your job description. When you have this conversation, you start 0:07:44.780 --> 0:07:49.420 with the intention. And the intention should always be, we're 0:07:49.420 --> 0:07:52.120 here to make this work. We are on the same team. 0:07:52.120 --> 0:07:54.700 We want the same thing. I want to figure out 0:07:54.700 --> 0:07:56.710 what we can do to make this work, because I 0:07:56.710 --> 0:08:00.340 believe that there is always a way to make it work. 0:08:00.340 --> 0:08:02.800 So when you start off the conversation like that, instead 0:08:02.800 --> 0:08:05.530 of being heated and frustrated, you're like, hey, wait, we're 0:08:05.530 --> 0:08:07.360 just going to recenter. We want to make this work. 0:08:07.360 --> 0:08:11.560 What would we have to do? Knowing the problem to 0:08:11.590 --> 0:08:13.510 make it work, what would that have to look like? 0:08:13.540 --> 0:08:15.820 And then you can start from that place instead of 0:08:15.820 --> 0:08:19.420 potentially starting with a dissolution, like in my partnership with 0:08:19.420 --> 0:08:22.690 my husband, there is no potential of dissolution. We are 0:08:22.690 --> 0:08:25.360 in this thing. We are figuring this thing out. But 0:08:25.360 --> 0:08:28.810 it's worth reminding in partnership conversations, whether it's with your 0:08:28.810 --> 0:08:33.220 significant other, your business partner or any other partnership, that 0:08:33.220 --> 0:08:37.630 there is high stakes communication that's online. Clarify that your 0:08:37.630 --> 0:08:40.030 intention is to make it work and that's the place 0:08:40.030 --> 0:08:43.360 that you're coming from. That is your responsibility. Now, once 0:08:43.360 --> 0:08:48.520 you're clarifying that that's your intention, um, ideal scene is 0:08:48.520 --> 0:08:52.900 that you actually have contractual clarity. So whoever is the 0:08:52.900 --> 0:08:56.589 managing member of the organization gets to make the final decision. 0:08:56.590 --> 0:09:00.670 There was some provision in place that stated what things 0:09:00.670 --> 0:09:04.059 had to be signed off on from both partners, versus 0:09:04.059 --> 0:09:06.849 the managing member. Getting to make other decisions, like those 0:09:06.850 --> 0:09:10.929 types of things in the communication should be brought up. 0:09:10.929 --> 0:09:14.200 If you do have contractual clarity that, hey, this is 0:09:14.200 --> 0:09:16.059 what I'm supposed to do, so I need to be 0:09:16.059 --> 0:09:19.089 doing this. And if it's if you're preventing me from 0:09:19.090 --> 0:09:21.969 doing it contractually, this is what's supposed to happen. So 0:09:21.970 --> 0:09:24.580 what do we need to fix? Because this is the contract. 0:09:24.580 --> 0:09:26.110 This is what we all signed up for. This is 0:09:26.110 --> 0:09:28.809 what we agreed to. My last piece on this. As 0:09:28.809 --> 0:09:32.290 you're going through an issue with the partner, ideally the 0:09:32.290 --> 0:09:36.100 first conversation that you bring up solves the issue, right? 0:09:36.100 --> 0:09:37.960 You have a three hour meeting or a four hour 0:09:37.960 --> 0:09:40.300 meeting or whatever. The amount of time is for you 0:09:40.300 --> 0:09:43.720 to sit down and to work through the problems. But 0:09:43.720 --> 0:09:45.760 in all reality, in the way that I've always seen 0:09:45.760 --> 0:09:48.670 this play out, it's not just one conversation that fixes things. 0:09:48.670 --> 0:09:53.470 It's multiple conversations. It's changing operating agreements. It's potentially changing 0:09:53.470 --> 0:09:58.990 a contract or employment agreements. There's there's there's legs that 0:09:59.050 --> 0:10:05.350 challenges can create. Right. There's legs that, um, that disputes create. 0:10:05.350 --> 0:10:10.990 So as you're going through this process, just remember that 0:10:10.990 --> 0:10:14.319 you are supposed to keep the main thing, the main 0:10:14.320 --> 0:10:17.200 thing with your team. So they should not have any 0:10:17.200 --> 0:10:19.510 wind of this, your team, you show up to all 0:10:19.510 --> 0:10:22.689 of your meetings. You have conversations with all of your 0:10:22.690 --> 0:10:25.300 leaders the exact same as you would have before. There 0:10:25.330 --> 0:10:29.710 is no conversation around it. There's no nattering about it. 0:10:29.710 --> 0:10:32.679 There's no like, oh, I'm so overwhelmed I can't make decisions, 0:10:32.679 --> 0:10:36.280 keep making the right decisions, make the ethical decisions, make 0:10:36.280 --> 0:10:39.400 the decisions that are in the best, uh, A course 0:10:39.400 --> 0:10:42.010 for the organization because that is the right thing to do. 0:10:42.010 --> 0:10:44.770 Even if you could start making shady decisions, do not 0:10:44.770 --> 0:10:47.979 make shady decisions. Whenever I have like there's like these 0:10:47.980 --> 0:10:49.900 little moments where I'm like, oh man, I could really 0:10:49.900 --> 0:10:52.150 jack things up right now. I think that every once 0:10:52.150 --> 0:10:54.400 in a while I'm like, not an angel all the time. 0:10:54.400 --> 0:10:57.880 And then I'm like, wait a second, I am highly ethical, 0:10:57.880 --> 0:11:01.900 I am moral, I have integrity, I want the best 0:11:01.900 --> 0:11:05.949 for everybody involved. There is no there's no issue that 0:11:05.950 --> 0:11:08.470 I want to create. I want everybody to succeed. But 0:11:08.470 --> 0:11:10.809 sometimes you have to remember, remember that and remind yourself 0:11:10.809 --> 0:11:14.800 of that when there's real life stuff happening in business partnerships. 0:11:14.800 --> 0:11:17.500 So despite all of those feelings and all of the 0:11:17.500 --> 0:11:21.010 leverage that you could have, be ethical in the process 0:11:21.010 --> 0:11:24.040 and treat somebody how you would want to be treated 0:11:24.040 --> 0:11:28.300 if you were in that same position. So those are 0:11:28.300 --> 0:11:31.570 my tips on what you do when you're having a 0:11:31.570 --> 0:11:34.510 dispute or an issue with your business partners.