A more humane view of business and corporate ties

Wenceslao Casares, a successful Argentine entrepreneur, has said: “I lose my passion several times a day. It’s the truth, it’s the hardest part of this. For me the most difficult thing to undertake is to eat all the sticks that you have to eat, because there are great moments, how many? Few per year, and the rest are pure sticks, you go to sleep worried. For me that is the most difficult thing to undertake, eating the emotional rollercoaster, which in general is for the bottom, people deny it, but in general you are worried ”.

The emotional aspect in the development of business is decisive. Simply because business is run by people. The same happens with the links that are generated around those businesses, be it a start-up, a mega acquisition or merger, or simply investing in a common project.

From the moment the decision is made to carry out a business jointly with other people, it is essential that everyone is aware that the creation and development process will be dynamic and enriching, but above all challenging, provocative and frustrating at times.

For this reason, it is crucial that previous associative “coexistence” agreements are established, seeking to generate “a whole that transcends” their individual interests. Either in a traditional shareholder agreement format, or a less pretentious memorandum of understanding. The important thing will not be the form but the content and, even more, the process that decants it.

In addition to the legal aspects of this type of agreements (such as the regulation of rights and obligations of each party; the way in which special decisions will be adopted or the profitability -and loss- of the business will be distributed; the way to resolve eventual and inevitable differences; or future modifications in shareholdings), I consider it very important that deeper basic agreements are reached that arise from answering three simple questions: What will we do? How? and until when?

It seems obvious to maintain the importance of a common look at the business to be developed. However, it is common to see the initial nuances of “what we will do” transform into irreconceivable differences as the business progresses. Therefore, investing time and analysis in defining in a timely and clear manner what the common business is will be key to economizing on conflicts and going through the initial process with some success.

At the same time, defining the way in which life together will be carried out will help to improve and solidify the links between the partners, allowing them to foresee alternatives to the challenges that will arise during the process. Thinking about the “how” helps to establish common values ​​that in crisis situations will serve as a safe harbor to which to return to make difficult and transcendental decisions for the continuity of the project.

Finally, accepting in advance that every process has a possible life cycle will allow the partners to develop dynamic mechanisms of adaptability, reconversion and eventual “exit”, always seeking to protect the common value and individual interests, as well as the no less important personal ties. Knowing how to recognize “until when” will help resolve differences before they turn into irreconcilable conflicts.

Exercises of this type will help partners to think about themselves (and to think about the common business) in a holistic, dynamic and humane way. After all, an associative business is made up of people, with the challenges that this brings.