"Co-founder conflict is the biggest value destroyer in my VC portfolio” said a friend of mine a few weeks back. This resonated with me, as I have over the years consciously observed how organisations handle conflicts at the ownership level and prevent their escalation! I have also stepped in to resolve issues in some of them. A simple 3 step process has evolved through these experimentation's observations and reflections. Our learnings and a snap shot of the process are in the attached note. Would be interested to hear experiences of people who have successfully implemented mechanisms to surface conflicts and prevent escalations. People who are grappling with live challenges in resolving such conflicts can also reach out.

1. Co-Owner Conflict
Learnings
M P Sriram

2. 2
Differences exist between co–owners either because of
1. Differing world views or
2. Differing personalities
Illustration:
• One wants to grow through leverage and debt , the other is debt averse
• One wants everything to run as per a pre-set plan , the other is very comfortable making changes
as the situations evolve even if the plan is turned on its head
Co-owners typically discover these differences somewhere along the journey
They figure out ways to communicate with each other when they start getting uncomfortable
with specific actions of the other
They also learn to live with differences that they believe are not high impact
Differences do exist

3. 3
Differences invariably become conflicts when feelings are not acknowledged or are dismissed off
by the other person without getting to the root of what is giving rise to those feelings
Causes
In an organisational context the causes invariably are hurt egos and feelings arising out of
• Perceived erosion or inequity in responsibilities /decision making powers
• Loss of power and prestige in front of other stakeholders (employees, customers, investors
etc.)
• Inequity in sharing rewards
When they are unable to communicate their discomfort /disagreement to the other expect conflict
to surface
They become conflicts when..

4. 4
Designate a Father Figure
To ensure differences don’t escalate into full blown conflicts, it is important for the investors/board
members/ co owners to informally designate one person who plays a “Father Figure” role
The role
• She/he will be clued in and keep engaging with the co owners
• She/he will listen to each person’s point of view and perspective and offer impartial advise on
a need basis
• She/he will help resolve issues
• She/he will also raise issues to the appropriate decision making body when required for
resolution
The above is in addition to mechanisms that the co-owners would have evolved to communicate
among themselves
What can be done to prevent escalation ?

5. 5
1. One who is perceived to be fair and impartial by all
2. Who is respected by all the owners
3. Who has the personality and skills to hold the various owners together
In firms that have unrelated people co-owning it and running it , it can be third
party they all trust ; a respected board member or an advisor in many a case
In family run businesses it’s one of the above or the Patriarch/Matriarch
Who can be this father figure ?

6. 6
• If a conflict escalates in spite of the above it needs to be acknowledged and
addressed at the earliest
• The more you ignore the more difficult to resolve
• We have crystallised a simple 3 step process to address conflicts once
they have escalated
What if Conflict Escalates ?

7. 7
• 1-1 meetings with all key stakeholders
• Objective: Help them understand and explore the issues from their perspective, their expectations, priorities,
interests, real needs, the underlying emotions, the financial and emotional consequences that their decisions
would have on themselves and their close people and the willingness to resolve differences
Understand
the seen and
the unseen
• 1-1meetings, joint sessions
• Delineate what is at stake upfront
• Process in terms of sequence, participants, number of sessions to be decided basis assessment in earlier
stage) and shared with all stakeholders
• Objective: Help the stakeholders understand the perspectives of the others and their feelings without
compromising on the confidentiality of the information that has been shared with the facilitators
Generate
Options and
reality testing
• Either independently or jointly and directly or through the facilitator
• Objective: Help the stakeholders evaluate options that are generated
• Finalize, orally reconfirm and record in writing the terms of agreement when an agreement is reached
Assessment
of options
and closure
3 Stage Conflict Resolution Process

8. sriram@aventus.in
(+91)9895345133
www.aventus.in
Performance and Change Consulting