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6 Ways to Use Co-founder Conflict To Your Startup’s Advantage

You know how to build a product — but it’s different from building a company. Adding a few tools and processes to encourage open communication may save your startup in the long run.

(Editor’s note: This is the second of a series of posts about how founders can and should use conflict as a tool to help them navigate co-founder relationships to make better decisions and grow their companies. The first post in the series was, “4 Reasons Why Co-Founders Leave — And How Unresolved Conflict Fuels Them”. Have a question or need advice about conflict? Tweet us @initialized and we may use it in a future post.)

Founders tend to crave the freedom to fully explore their ideas. The promise of starting a company or joining a startup might mean doing away with corporate bureaucracy and red tape in favor of autonomy: more building and less talking.

But building a product isn’t the same as building a business, and all founders need to embrace having difficult business discussions at some point. 

For founders who may be great at ideas but not as well versed in leadership, avoiding conflict might be more comfortable, but avoiding topics that need to be addressed can lead to ambiguity or assumptions that can turn into big problems later. 

This means startup founders who purposefully left the red tape of the corporate world may need to thoughtfully add back in a few processes to encourage direct communication and conflict in order to build a sustainable company. 

In my last post, I explained why I’m a big believer in using micro-conflicts to gain business alignment with your co-founders. Open and direct communication is a helpful and healthy way to better understand each other when you disagree and will help you make better decisions together, lead better, and move forward.

In this post, I’ll share some tips and tools we recommend to founders of our portfolio companies to help them use conflict in a positive way and encourage open communication.

Get coaching early

The relationship between co-founders is similar to any other relationship — from domestic partners to siblings to friends. If you’re both human, it’s impossible to avoid conflict and we sometimes procrastinate on having difficult conversations. Sometimes, it helps to get some outside perspective and communication tools. 

Personal counseling and leadership coaching — such as the services our portfolio company Torch provides — can be a forcing point for co-founders to hash out any unresolved issues. But it’s also a way to start building long-lasting communication habits. 

While some might consider co-founder executive coaching a luxury, by the time most co-founders seek help, they’re already in a pretty bad place. Most of the time, we’ve seen coaching be very beneficial and recommend getting a coach early.

Create a culture built upon empathy and listening 

Just as coaching or therapy helps people negotiate relationships, so too can honing your empathy skills. And make no mistake: being empathetic is a “skill.” While some people are naturally empathetic, it can be learned and improved with work. 

To be empathetic, you need to actively seek to understand what people care about and how they work — that means asking lots of questions and listening. The more you can create a culture of understanding and empathy, the more effectively you’ll be able to gain alignment with your team.

Leadership coaching can help in this area. Torch heavily emphasizes honing listening and empathy skills as foundational to their leadership training program. One method they teach is for leaders to ask three questions for every statement they make. Try it the next time you have a conversation with a friend and you’ll see just how much you learn in a short time. 

Another useful framework is the Thomas-Killman Conflict Resolution Model which assesses people to understand which of the five conflict modes they naturally prefer, and teaches them to use all the styles for different situations and understand when to use each one. 

Establish clear responsibilities with RASCIs

In the rush to bring on talent and get a startup off the ground, founders often fail to clearly define roles and responsibilities. The top two reasons founders in our portfolio have departed from their companies are talent mismatch and performance — and often, these issues are created by ambiguity in ownership. 

For this, we recommend applying the RASCI responsibility matrix. This matrix puts names to who is Responsible,Accountable, Support, Consulted, and Informed for functional areas of the business and/or to determine ownership for more granular tasks within projects. Owners are documented so it’s clear and can’t be forgotten when things get busy. 

We use RASCIs at Initialized and I often get asked about them by our portfolio. I’ll cover more about how and when to create RASCIs and share examples of how they’ve worked for some of our portfolio companies in an upcoming post.  

Can’t decide today? Decide on a deadline 

One way conflict escalates is through indecision. Co-founders may kick the can on resolving a conflict in the heat of the moment, then make the bigger mistake by failing to come back to it. Empathy can be a big help here as a means to understanding how different people go through their own decision-making journey, as well as knowing each other’s hot buttons. 

For example, with my project manager background, I tend to push toward resolution more quickly than some. On complex issues, my partner, Garry Tan, wants to make sure he’s considering all outcomes to get to the ideal solution and sometimes, takes more time to do so when it’s needed. After working together for years at multiple companies, we’ve learned to effectively make decisions in a way that suits both our styles. If we can’t resolve an issue or micro-conflict immediately, we give ourselves a firm deadline. 

So, if you can’t agree on a course of action today, agree on a deadline to make that decision and then stick to it. 

Create processes where transparency is the hero

The best weapon against ambiguity is documentation, and shared documentation gives you transparency. When Jack Dorsey started Square, he was determined to build a more transparent culture than the one he experienced at Twitter, back when he’d been forced out after a series of secret meetings. So, he instituted a policy that for every meeting at Square, meeting notes would be created and shared with the entire company. 

There are certain instances in which sensitive information can’t be shared broadly, but the more you can share information internally, the more context people will have to empower them in day-to-day decision making. 

Agile processes are typically very transparent as agile teams use product management tools to document and track the status of each issue. Leaders can use similar tools to both force discussions (e.g. scheduled 1-on-1s or retrospective meetings) and share outcomes (meeting notes). 

Build a comp plan before you hire 

As I wrote in my last post, vague promises about compensation are rampant in the early days of startups. Along with misunderstood verbal promises, sometimes founders fail to consider the fairness of packages offered for different roles against one another in the rush to bring talent on board. As a startup matures, early hires compare notes on their compensation packages to those of newer hires and inconsistencies can escalate into big conflict. 

Instead of negotiating case-by-case based on how much you like a candidate, founders should have a comp plan that factors in the value of the skills and experience for each role. In a future post, I’ll explain in more detail how to create a compensation plan for early hires that is future-proof and gives your organization flexibility as it evolves. 

Next up: How the pandemic has affected conflict

When the pandemic closed office doors, it also enabled conflict avoidance when Zoom replaced in-person interaction. In the next post, we’ll look at how teams can deal with pent-up conflict as companies decide how, when or if to re-open offices.

To follow this series, check our blog or @initialized, and tweet us your own question about co-founder conflict.