Dear Startup Investor: Why You Need to Know about Conflict Before You Commit

Dear Startup Investor: Why You Need to Know about Conflict Before You Commit

The truth is that starting up is one thing, but staying alive is another. Research shows that half of new business startups fail within the first five years of operation, and over 60% fail due to negative outcomes from conflict. Noam Wasserman’s research on startups, described in his best-selling book The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup, reveals this: Most business startups ‘sink’ not because of lack of planning, failure to test the market or undercapitalization, but rather due to interpersonal complexities, destructive co-founder disputes, destructive team dynamics, and people problems.

Another truth is that conflict is a necessary part of successfully running a business. This is because conflict is a natural occurrence which can happen any time two or more individuals have different ideas, wants, and needs. Conflict is normal in any environment. However, if not properly managed, conflict can escalate into disagreement and become entrenched to a point of no return for a young, fragile business.

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Save Your Company through Mediation Only?

Save Your Company through Mediation Only?

“If this thing fails, I’m not sure what I’m going to do,” Lance tells me as we finish our first call.. “And under no circumstances can our investors find out what’s going on.”

Par for the course for a mediator to hear, and quite understandable. I give him the assurances of confidentiality and a look at the powerful toolbox we as an experienced mediation team will be drawing from. And this reality check: “I guarantee that at the end of this process there will be change; and I guarantee that not everyone is going to like it.” That’s often how the “team performance sessions” begin when we get called in to support a team in crisis.

He and his cofounders are about to entrust us with some of the most important things in the world to them – their startup dreams and their identities. Sugar coating what they are about to enter into won’t help anyone.

Can a mediator singlehandedly save a company? I submit – yes, we can!  (Superhero cape not included.)

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Mergers and Acquisitions: 3 Powerful Ways to Prepare Your Team for Change

Mergers and Acquisitions:  3 Powerful Ways to Prepare Your Team for Change

In my blog about Mergers and Acquisitions and the Transitions that Can Cause Conflict I talked about the challenges that management typically faces in the post-merger implementation process – which, in fact, applies to any change management effort big or small.

What we know is that the ‘human factor’ is a key to successful change. And that conflict is the underpinning of any type of change.  As much as we try to avoid conflict or brush it under the rug…it happens, especially in response to the unsettling nature of change. We at Resologics have found that conflict can help or hurt your team, that unaddressed conflict can actually cost you in real dollars (find out how here).

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Mergers and Acquisitions and the Transitions that Can Cause Conflict

Mergers and Acquisitions and the Transitions that Can Cause Conflict

There’s at least a 34% chance that an investment in an organization will be adversely affected by destructive conflict within the team. The statistics – and stakes – can go even higher when the investment is in the form of a merger or acquisition.

The human aspects of post-merger implementation of M&A deals have been studied thoroughly in recent years, and what they find in a large number of cases is that the merger, a good match on paper, fails in the transition process. Many companies focus on the financial and business systems transition, but don’t pay attention to the human factors until it’s too late. Cultures clash, employees leave, production declines, shareholders are unhappy, things fall apart. This has even been dubbed a “merger syndrome.”  A study by KPMG found that “83% of all mergers and acquisitions (M&As) failed to produce any benefit for the shareholders.” The overwhelming cause for failure that was reported? 

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