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According to Harvard Business School Professor Noam Wasserman, 65% of high potential founder-led firms fail due to conflict among co-founders. In fact, co-founder bust-ups are up there with lack of market demand and cash flow issues as one of the top reasons for startup failures.
In the hustle to launch and grow a business, founder alignment is often neglected, and yet it is central to running and scaling a business successfully. So, what exactly is alignment, and how do you achieve it?
Alignment is reaching a working understanding on all the topics that will be critical to the businesses’ future success and exit. When I coach founder-led businesses, I take them through an alignment audit that looks at three areas: business future, their leadership, and their personal future aspirations.
Business future encompasses goals, mission and strategy; vision and values; target audience, product and market; and success measures. Leadership looks at founder roles; leadership team and structure; and succession. And personal future covers equity and ownership, and personal red lines around exit.
After hosting many of these conversations, here are my five tips for achieving co-founder alignment:
1. Embrace conflict I like to apply the rules of Fight Club– one fight at a time, fights will go on as long as they have to, but you have to fight! Although lots of us are conflict-avoidant, it’s better to face into your disagreements, rather than having artificial harmony with festering undercurrents.
2. Data-backed vs emotional arguments As W. Edwards Deming said, “In God we trust, all others must bring data!” Using data gives a grounding in facts rather than emotions. It allows you to measure to manage better, identify patterns and new opportunities, and see the bigger picture.
3. Get clear on your red lines I call this the Spice Girls clause– tell me what you want, what you really, really want. Founders may well have different personal ambitions, timelines, and exit goals, and it’s helpful to get clear what these are early on.
4. Aim for a collaborative process When things get heated, I encourage founders to really listen and understand each other’s viewpoints, to hear each other out. The fifth habit of Stephen Covey’s The 7 Habits of Highly Effective People applies here- seek first to understand, then to be understood. You may find that my view, plus your view, equals a better view.
5. Be open to professional help Founders have a tendency to try to do everything themselves, but having an external person hold space for the difficult conversations can really move things forward. Leave the office, have a facilitator, and don’t leave the room until you have a resolution!
Being proactive in making a regular commitment to review your strategic leadership of the business is the best way to avoid terminal blow-ups. Consistency and accountability in ensuring founder unity is thus the fastest way to release the energy you need to grow a business at pace.
Related: Turning Your Creative Talent Into A Successful Business: The How-To
