* The Succession Institute, LLC is not a CPA Firm

Construction Industry Resolving Ownership Conflicts

Posted: October 2, 2007 at 9:33 am   /   by   /   comments (0)

Owner or partner conflicts occur every day.  Most of the time, they are easily resolved through conversation, negotiation and compromise.  However, once the conflict issues raised fall within areas such as personal strategy (how you want to live your life, etc.), personal values/ethics, and/or desired outcomes (how big you want the business to become, who is next in line to take over the business, etc.), the conflict becomes personal, and it is often one person’s will against another. This tension quickly can shift into organizational dysfunction as different owners of a construction company convey conflicting messages to employees, vendors and stakeholders.

Most commonly, “dysfunctional owner conflicts” flourish in construction companies that lack one or more of the following:

  • Defined and agreed-to strategy (with an open and honest communication driving that strategy),
  • Decision-making authority (because someone has to hold everyone accountable),
  • Agreed-to organizational chart (which clearly communicates the hierarchy of authority),
  • Defined job duties and responsibilities (which provide important insight as to expectations for each role),
  • Standardized operating processes, procedures, and policies (which help support and raise the minimum standards bar for performance),
  • Clear, objective accountability (because people do what they are rewarded and motivated to do),
  • Willingness to:
    • Quickly address issues (because time does not make problems go away; it just makes them fester),
    • Address the conflict in a timely manner (to prevent small, but neglected conflicts from turning into “time bombs” that do serous damage),
    • Enforce consequences (because accountability cannot work if there are no consequences for inappropriate actions or behaviors),
    • Take a step backward in order to move forward (e.g., be willing to let an owner go even if he or she has generated significant profits for the contractor, or fire a bad client even if it is one of your biggest; invest in foundation systems even if it reduces current income; every day, consider steps that might hurt in the short term but are the right thing to do to protect the long-term viability of the firm).

We work with contractors to help them move forward. This is not about determining who the good or bad partners/owners are, but rather about discovering the misalignment of personal goals and values between owners/partners. In the end, regardless of the outcome, owners are better off when their personal and professionals values and goals are in alignment with what they are doing. We help contractors identify what is important to them, help them create a strategy for change, and help them align that personal strategy with their business.

In addition to resolving owners’ conflicts, we also work with project teams to help contractors resolve conflict on construction projects.  This topic is covered under our section on “Partnering for Complex Projects.