Why Is Goal Incompatibility Among Business Co-Owners at Exit Practically Inevitable?
7.12.2017
Ironically, growing the business often increases the likelihood and degree of exit-goal incompatibility among co-owners.
It is helpful to understand this from the get-go because co-owners and the people around them (close family members, employees, advisors, etc.) may see the signs of co-owners struggling with exit-goal incompatibility and interpret it to be a relationship problem, which is not always the case.
Goal incompatibility at exit has nothing to do with the quality or duration of the co-owners’ relationships. (It is true, however, that co-owners who already are not getting along well will often experience deeper discord once they realize that their exit goals are in conflict.) Rather, exit-goal incompatibility is a natural, almost predictable event, rooted in the practically unavoidable differences between two or more people. No two business co-owners are exactly the same.
Their biographical and situational differences plant the seeds which blossom into different goals at exit. The following table, taken from A Tale of Two Owners, written by NAVIX founder Patrick Ungashick, lists fifteen owner differences, each of which can lead to incompatible exit goals among co-owners.
This list is not exhaustive—co-owners could experience a variety of personal, cultural, or psychological differences that can contribute to different goals at exit. Most business co-owners will have multiple differences between them, any one of which can lead to incompatible exit goals. As the number of co-owners increases, the number of differences usually increases exponentially. As a result, it should be easy to see why incompatible goals at exit occur so frequently and predictably.
Download The Story of the Paralyzed Partners Case Study (PDF)
This case study highlights the importance of co-owners in a business recognizing their exit objectives may not be aligned. Owners need to plan their exit years prior to the event and work with an experienced team of advisors.
Tim is a Consultant to Business, Government and Not-for-Profits Organizations specializing in innovative and challenging ways for organizations to survive, to thrive and to build their teams.
