Never dangle a deal that you can’t or won’t make good on. I’d just left a meeting with two clients who were attempting to renegotiate their partnership agreement when I made my first notes about this.
They had been working together for years. They were both major contributors to the success of their business. They were very comfortable with each other, collaborating on all kinds of issues and learning from each other’s perspective and experience.
Although they have entirely different personalities and leadership styles, both are highly respected by staff and clients alike.
Admittedly, this was personal. It potentially put numbers on their individual contributions to the business. So self-worth and respect would be reflected in the outcome.
But they had dealt with these deeply personal issues in years past and reached mutually agreeable solutions.
So what was the problem?
Four years earlier the senior partner had said that he’d allow the minority partner to become equal to him in share ownership when their current agreement expired.
Now, in spite of the minority partner’s outstanding performance, the majority partner was saying no to equal shares.
“I must be the sole final decision maker. I’ve worked 20 years building this business and I will not sign a deal that gives anyone an equal say.”
The minority partner replied, “Robert, I must work with you, not for you, in building this business. That’s what I’ve been working towards these last four years.”
If equal shares had not been dangled, if the minority partner had not felt misled, this dangerous and uncomfortable situation would have never happened.
I say dangerous because this issue, if left unresolved, had the potential to completely undermine their relationship and, worse, divide the firm.
I’m sure that some readers will think, “This is obvious. Of course you shouldn’t dangle a valued partner or employee with an ownership deal you can’t or won’t honour when the time comes.”
But I’ve seen variations on this story time and again, often with devastating consequences.
It usually ends with the offended party leaving, often taking staff and accounts and setting up a competing firm.
A competing firm not only fueled by a desperate need for survival but also with a deep desire for revenge and retribution.
Consider for a moment the individuals who are offered deals like this. In my experience they are the top performers: sales and account directors who have deep, rich client relationships; creative directors who’ve received major acclaim for their work and drive business to the firm as a result; chief operating officers who run and manage offices or regions.
So why would an intelligent, thoughtful leader dangle a deal that they know they will not make good on when the time comes?
The day will come
Because they fear that the person will leave if they don’t offer such a deal.
Offering it in the future seems to ensure a bit more productive time before the day of reckoning. Perhaps they think they can wiggle out of it down the line.
Or perhaps they just haven’t thought through their own feelings on it. Maybe they have a self-destructive streak.
But in any case, when the day comes you can bet on the fact that unless they fulfill their promise in a manner that meets the other party’s expectations there will be, at best, a difficult discussion and, at worst, the demise of their firm as they know it.
Happily, Robert and his minority partner did reach an agreement. Robert apologized for misleading his partner and his partner graciously said, “I understand why you dangled me.”
He went on to say, in essence, “I forgive you.” In this case their relationship was strong enough to weather the storm. But it easily could have gone the other way.