Partnerships: Delightful or Disastrous?

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Author John Towler, Ph.D.

How to create strong lasting business partnerships.

Partnerships are like marriages. Some are sound and last for years; others are in trouble from the beginning. Some can be saved with a little tender loving care, while others are doomed to failure and end in a breakup. What distinguishes the good ones from the bad? Why do some last while others are in perpetual trouble? There are a few basic psychological principles which govern the success or failure of partnerships. By following these rules, you cannot guarantee your partnership will survive, but you can increase the chances and make life much easier for yourself and your partners, even if there is a breakup.

Perhaps the easiest way to understand partnerships is through the marriage model. Partnerships, like marriages are the joining of people (who at least start out liking each other) for a common purpose. As in marriages, there is a certain amount of emotionalism involved, some irrationality at times, a great deal of optimism at the beginning, and an unforeseen element of danger in which egos can be bruised, bent, or destroyed. In fact, to carry this analogy even further, we can say that splitting up a partnership is like getting a divorce where there are no children. It really isn’t hard to understand why this is so.

Partnerships often involve friends, colleagues, and relatives. When people are faced with either the failure of a business or the ending of a personal relationship, there is a great deal of room for misunderstanding, hurt feelings, anger, and resentment. However, by applying sound business practices, a little psychology and some common sense, you can avoid most of these problems.


Psychologists have identified several types of marriages, and these classifications can also be used to describe certain kinds of partnerships. You will probably be able to recognize some marriages and partnerships you know in the following models.

The best type of marriage is the total marriage, one in which both partners share almost everything equally and see the other as an extension of the self. There is little tension in this arrangement, but when conflict does arise, they can resolve it quickly and easily.

A second type of marriage is the vital marriage. In this type, the partners usually agree on essential matters, but each has a separate identity and operates according to different values. These partners may disagree on fairly significant matters, but they work together to resolve the problems.


In the devitalized marriage, the excitement and much of the pleasure have gone out of the arrangement and the partners share very little in the way of interests, goals, or values. Conflicts may arise frequently, but they are handled by one partner’s giving in to the other. The partners stay together only because it is easier to do so than to break up. This type of marriage can easily be moved to a divorce by a crisis.

The worst kind of marriage is the conflict-habitual marriage. This type is characterized by continual fighting and an attempt by one partner to dominate the other. At best, the conflicts are discreet and controlled. At worst, the fighting is bitter, loud, and similar to open warfare. These marriages generally end in divorce, much to the relief of everyone concerned.

Sound partnerships can be developed and maintained if you know how. Partners should first agree that each will share the workload equally. This is even more important than whether they contribute money equally. A partnership will not last long if one partner is not pulling his or her weight. Spell out from the beginning what each partner is going to do and who is responsible for what jobs, and review these arrangements on a regular basis. As the business develops, the partners may have to assume new duties. In addition, as time goes on, their personal lives may create pressures and demands that result in an inability to spend the agreed upon amount of time on business matters.

While the partnership was founded on mutual trust, this can change in unforeseen and uncomfortable ways, unless you make a conscious effort to keep the lines of communication open at all times. Be sure that everyone feels comfortable about telling everything and anything that may have an impact on the business. Many businesses have been ruined when partners forget to keep each other informed of changes, new ideas, different arrangements, or simply suspicions about the others. For example, one partnership broke up because the partner responsible for obtaining financing failed to tell the others that a sizable portion of the funding had come from a relative with the understanding that the loan could be called at any time. Another business broke up when one partner chose to interpret the profit sharing arrangement in a new way and let his partners find out about it after he had withdrawn and spent the funds.

One of the most important rules is to get everything in writing. Write down what everyone is going to do, how much each will invest, and how you will share the profits. At the same time, write out a business plan for marketing, production, and dealing with the normal, foreseeable concerns. Writing it all down will force you to plan your business, record what you hope to achieve, and protect everyone from misunderstandings. With regard to the latter, it is a good idea to have each partner sign the document so there can be no confusion about who agreed to what.

The last but one of the most important tasks is to draw up a formal agreement (usually with the help of a lawyer) governing what will happen if the partnership fails, if you want to add new partners, or if one partner wants out of the business. While no one wants to think about what will happen if the business fails or if one partner turns out to be a crook and runs off with the comptroller, this is the time to consider what should happen under these circumstances. Similar to a marriage contract, this kind of agreement can save months of time and avoid expensive and bitter legal battles. For example, by agreeing on how to evaluate the partners’ contributions if and when you sell the business, you close the door on a partner who later decides that his or her contribution is worth more than anyone else’s.

A wonderful way to combine resources, partnerships can pay off handsomely. They should be created with some outside expert help and, once in place, they can’t be taken for granted. As in marriage, you must work at maintaining your partnership just as hard as you do at maintaining your business.

John Towler is a Psychologist and the founder of Creative Organizational Design. Please send comments about this article to jtowler@creativeorgdesign.com. For more information, please contact us.

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