What to Do When Your Business Partner Isn’t Pulling Their Weight
Five steps to evaluate the business relationship — and what to do should you need to go your separate ways.
Recently, I spoke with Samantha. A first-time founder who had been working on her business for the last three years. Samantha and her co-founder had recently achieved product-market fit. They were doing great, except that Samantha was having a hard time working with her business partner. She recounted frustration after frustration and how things were getting worse after her co-founder, who had promised to quit by year three so Samantha could go at it alone, decided to stay on. However, her business partner wasn’t pulling her weight, and now these broken promises were also weighing on the business relationship. The prospect of working together was causing problems. Samantha wanted to either buy out her business partner, re-work the equity since she wasn’t putting in as much time as her, or quit.
It was a make-or-break-it moment.
Samantha’s situation is not unique, however. It’s common that by year two or three, disagreements between the founders pop up. Like any relationship, business partnerships also require that the people involved work to keep it high-functioning.
As a mediator and executive coach for seed-funded to Series B startup founders and established teams, I speak with a lot of potential clients about their situations to see if I can help them. Business partners and founders argue about all sorts of things:
- The differences in time and energy each person puts into the business
- The inability to agree on the business vision/next steps
- Executing differently than your business partner might
- Not meeting KPIs/OKR expectations
- Personality clashes that make business hard
These disagreements are common — but it’s how you disagree about them that ultimately matters.
When you fear that your business partner may not be pulling his or her weight, diagnose it. And come at it tactfully, so you hopefully come out better. Depending on your situation and how bad the situation is, use one of the following five steps to do that effectively.
Step #1: Diagnose the Problem
When to use this: When the problem you’re discussing is relatively new, you just noticed it, or you need to bring up the issue again.
Why use this: If you can’t diagnose a problem objectively, you won’t be able to discuss it with your business partner rationally. This step is a simple way of figuring out and naming the problem accurately.
How to do this: to diagnose the problem, observe the behavior and describe the impact on the business. Below is a formula for this:
Observation + Impact on Business = The Change You’ve Seen
An example of how this would work: “I am noticing that for the last several months you haven’t been putting in as much time as you use to [OBSERVATION] and that’s starting to affect our timelines with the product launch [IMPACT ON BUSINESS]. Why is that?”
The question at the end helps you understand the change you’ve seen, which is why your business partner isn’t pulling their weight, helping make the diagnosis of the problem collaborative.
This formula also helps you depersonalize the problem, which is when we start name-calling, yelling, or assuming the worst in another person when we disagree. When we personalize issues, using the above example, it could sound like this:
“I’ve been noticing for the last several months that you’re not pulling your weight anymore. You’ve gotten lazy, and I seriously doubt you’re committed to building this company like I am [PERSONALIZATION]. It’s starting to affect our timelines with our product launch. Do better.”
See the difference? This statement puts the person on the defensive while the other invites him or her to explain why they are not pulling their weight.
By accurately diagnosing the problem, observing what happened and how it impacted the business, you reinforce effective communication and also can check any misunderstandings or assumptions you may have made on your part too.
Step #2: Have a Realignment Conversation
When to use this: After you have accurately diagnosed the problem, and started the conversation with your business partner, now it is time to get into a deeper realignment conversation. That is: what was once expected versus what is expected now. The goal is to give everyone some clarity on how to best move forward.
Why use this: This is another simple tool for making a difficult conversation easier by laying out a process for what needs to be changed and how to discuss it together. This way, everyone is clear on what they need to do going forward.
How to do this: I like to call these realignment conversations. I recommend business partners have these at least once a partner so they can surface any issues that may need to be talked about. You start by defining what was once expected versus what is not expected to help you decide how to move forward together. The below breaks this down so you understand what needs to go in each section:
An example of what this could sound like:
“I know when we established our OKRs this past quarter we decided that a sales target conversion rate of 35% was doable [WHAT WAS ONCE EXPECTED]. We aren’t meeting that. I know you are putting in less time now because of COVID, and I get it. Everyone is burnout. We still need to hit a measurable conversion rate so we don’t lose our momentum [WHAT IS NOW EXPECTED]. What would be doable in your mind?
Again, this ends with a question to help you establish a collaborative conversation space. You will decide together what the new target will be. Ensure that whatever is decided upon is written down — either as an email, Slack message, or Google doc. Should you need to reference this later on, you’ll have a record of it.
Realignment conversations can be a powerful way to work through a problem and reboot the business partnership, especially if things have gotten worse lately. After diagnosing the problem accurately, these conversations should be collaborative and business-focused, shifting the problem into an opportunity to be explored together.
Step #3: Renegotiate Roles/Responsibilities
When to use this: If your business partner isn’t pulling their weight, is consistently not meeting expectations, and you’ve had several conversations about it — it’s time to renegotiate their role and responsibilities to the business.
Why use this: This can be seen as a drastic measure by the business partner whose role/responsibilities may change. But it doesn’t have to be. How the conversation is framed will ultimately determine that. This change can be temporary until their performance improves or can be seen as a proactive positive if the founder can admit that things have changed on his or her end.
How to use this: Get clear on what your business partner can commit to and if they need additional support. Questions to ask yourself and your founder include:
- Do we need to hire a coach to improve their performance?
- Do we need to hire other team members to cover some of their tasks in the interim?
- What Objectives and Key Results (OKRs) or Key Performance Indicators (KPIs) do we need to switch?
- Are we objective and reasonable in what is expected from each other?
Rely on the tactics from Steps 1 and 2 to help ground this conversation. Depersonalize the issue. Make it business-focused in order to lower defensiveness and work through the problem together. Ensure that whatever you agree to has a timetable and reasonable evaluation metrics for the new roles or responsibilities.
💡 Pro tip: If they need to permanently decrease the amount of work or time that a founder can commit to the partnership, make them an advisor. Whatever equity they have vested in that time is theirs, but decrease their equity too to compensate for this change. And pay them a salary if possible.
Step #4: Restructure the Equity
When to use this: Steps #4 and #5 should be considered last-resort steps after you’ve tried to talk things out, realigned expectations, and looked at their role duties.
Why use this: This is a serious conversation that can have drastic consequences if done incorrectly. If you do this, you put the founder or business partner on notice that their continued bad performance or not meeting expectations has consequences.
How to use this: Approach the conversation strategically. Make it less about a reprimand and more about an opportunity to explore how you two can continue working together. Here’s a sample template for how you can approach this conversation with your business partner:
“Tom, look, after months of trying to get realigned and make things work between us, it seems like the problems keep occurring. We’re having a hard time working together. I want to have a conversation with you about our current equity split and how we can move forward. Let me know when would be a good time to chat.
You can keep it vague while letting them know that the intention is to explore the equity structure. Remember, your business partner’s initial reaction will be that something will be taken away from them, which means they will work to fight for it. Your task is to overcome this initial reaction by asking questions and seeing if they agree with you. Ground the conversation in facts while validating the work they have done to date.
💡 Pro tip: involve a neutral third party to help facilitate the conversation. He or she can be a mediator, a trusted advisor, or someone from your board. You want someone to provide a neutral assessment and provide a safe space where you can have the conversation and discuss the issue openly.
Step #5: Dissolve the Business Partnership
When to use this: This is the last resort option. And how you navigate the ending of the relationship will have you evaluate the level of risk for the business versus securing your own interests.
Why use this: When the relationship has gotten to the point that it is beyond repair, use this step (but do it gracefully).
How to use this: Here, you may want to reach out to an attorney, a mediator, or someone with extensive knowledge of business dissolutions. If you have significant intellectual property and your partnership agreement does not say what happens in the event of a business breakup, you will need to negotiate on who gets what. For more information on what to consider when breaking up with your business partner, read the following article:
Special Consideration: Ask Your Board
When to use this: Not every company has one. But it can be useful when you need an external assessment to help negotiate the next steps or need an objective third-party to help navigate a difficult conversation.
Why use this: A board member has a fiduciary duty to the company. As such, they will bring a level of discernment and good judgment that’ll help ground the conversation (hopefully).
How to use this: Ask. You should, ideally, have a good relationship with your board members and can bring this matter to their attention. Provide a history of the issues, either through an email or Google doc. That way, they know what is going on before they get involved. And come with a specific ask so as to not waste their time and they can start providing value asap.
Bottom line: a business partnership is like any relationship. And when you observe that your partner is not pulling his or her weight, talk to them. It’s when things have gotten bad and past the point of no repair that you should resort to more drastic measures like restructuring the equity or dissolving the business partnership.
Who am I & why should you listen to me?
I am a mediator that specializes in resolving co-founder disputes.
I have had the unique privilege of brokering deals between founders when the stakes are high, restructuring their equity, or helping transition a founder out. I have found that no two conversations are ever the same, and it really comes down to the founder’s willingness to move forward together. For that reason, I use a blended, collaborative form of mediation that empowers founders to come up with a decision that is fair and reasonable.
To learn more about my personal style of mediation, check out my article:
