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• Author: Fowler, Mark H.
• Position: Business Management - Business enterprise partnerships

Business failure can occur when two or more stakeholders--who must work together because of operational or financial arrangements--view a situation differently. Call it "philosophical discontinuity." Disagreements and undercurrents of dissension can chip away at a company's foundation for years until one day management discovers that the business has been irrevocably altered.

When families, friends and associates decide to build a business together they often focus only on the positive. They agree on everything from the company's long-term vision to its operational basics, and quickly sweep away any philosophical disagreements. They grant concessions to make the new enterprise work. By doing so, however, they are really setting up the business for difficulties and possible failure.

Once operations begin, the parties form their own ideas about the company's direction. The singular vision, once held by everyone, diverges into two, three or even more mind-sets.

Sometimes team members discuss their ideas and reach consensus. Often they don't. But even if they communicate on smaller issues, they frequently fail to confront the major questions of how to run the company.

It's easy to agree on what the company should manufacture or what services it should provide. But how this is done is the important question and an area in which differences in style, experience, education, culture and mind-set quickly emerge.

You see this in professional firms. Their purpose is to support and service clients--basically, make clients happy. However, one partner might do this by giving great advice, but not adequately charging for it, while another partner is focused on the value of advice and is not afraid to bill for it.

This philosophical gap can lead to arguments about billings and collections, profitability, staffing and partner distributions. If it continues, crisis rules.

Such a philosophical misalignment can lead to poor staff relations, high turnover, low productivity and a culture riddled with growth and profitability challenges. The net result could range from the firm splitting to it failing.

SYMPTOMS OF PHILOSOPHICAL DISCONTINUITY

Companies that are struggling philosophically often experience the following:

* Projects don't get done, promises aren't kept and issues aren't resolved. When people feel forced into something, they often won't give their best effort or worse. What's worse, there may be times when they find ways to undermine the efforts of...