Tuesday, September 13, 2016

The Souring Business Relationship: Conflict Resolution to Termination

Starting a business relationship is ever so lovely for both parties. Maintaining a long-term relationship can be complex. Whether it's the business that changes or the people, conflicts will happen. Sometimes those conflicts can be resolved and sometimes it's necessary to terminate the business relationship. Conflicts can arise unexpectedly for fleeting or enduring reasons. Termination should never be a surprise for either party.

Jeffe gave an example on Sunday of an author who abruptly dismissed her agent and set fire to the bridge, the roadway, and the connecting villages. Believe it or not, there are ways through business conflicts and even endings that can allow the personal connection to survive.

The key is clarity, specificity, and confidence. 

Conflicts are no time for you to be passive-aggressive, apologetic, or vague. If you hate confrontation with every fiber of your being, this process can be the raft to which you cling. If you have the bad habit of turning a professional conflict into a personal one, this process might help with that too.

Let's assume the conflict has arisen because whatever product or service to which you agreed hasn't been delivered at all or to the level of your satisfaction.  Aka, there is cause.

What To Do If There's Cause for Conflict or Termination

1. Check Your Contract
If you have a contract with the person/agency, read the conflict resolution and termination clauses. There might not be a conflicts clause, but there should be a termination one. Make sure you have the legal right to end the business relationship. There are less-than-reputables out there who will present you with a contract that gives them all the power and you none. NEVER SIGN THOSE. Ehem, assuming there is a termination clause that allows you to end the relationship, it should tell you how many days notice, whether notice has to be written or verbal, and if there are any penalty fees. Follow the terms of the contract, with the exception of any "verbal only" requirements. Always follow-up with a written version to Cover Your Ass.

2. The Concern Call -- Desired Outcome, Improvement
With the Concern Call, you're giving your business partner the chance to fix whatever the problem is. They may be completely unaware that there is an issue. On the other hand, maybe they've long known there is an issue and dreaded telling you. The magic third hand could be that your expectations and theirs are wildly different. The call is the opportunity for everyone to get on the same page. At this point, there is still a good chance that both of you can come away with exactly what each of you wants.

Yes, this really should be a spoken conversation--phone, video chat, or in person--if you want to preserve a positive personal relationship. If your communications have always been online, then skip to the next stage. Do not, under any circumstance, do this in instant messaging or chat. That platform allows for unintended interruptions and mistimed responses that can blow the simplest of conversations out of proportion.

Before you place the call, WRITE DOWN your concerns and your expectations. Avoid statements of blame, they're counterproductive to progress. WRITE DOWN the specific deliverables/actions and the dates for those things to be completed in order for the business relationship to move forward. Limit yourself to no more than five key deliverables. All due within 30 days. All realistically achievable within that timeframe. It's okay to write this as a script if that makes you more comfortable. You're going to reuse this text in the next step anyway.

During the call, stick to facts not feelings. You want to be very clear about the severity of the situation while allowing your partner to maintain their dignity. They're already on the defensive, that's unavoidable. It's not your job to placate them. Your purpose is to lay out the path forward and to offer them the opportunity to walk that path with you. PLEASE, please make the extra effort to not dither, obfuscate your expectations, or apologize for having the expectations in the first place. It does neither of you any favors.

Before you conclude the call, schedule a follow-up meeting/phone call on the 31st day to review what's been done and whether it's satisfactory.

If your business partner refuses to meet your expectations, then the next step still happens but the tone changes.

3. Document The Caution (Immediately After The Concern Call) -- Desired Outcome, Improvement
The Caution is the written summary of your Concern Call and what agreements the two of you reached. The letter itself doesn't have to be long. Think bullet points.

Dear Bob, 

As per our phone call on [date of call] discussing my concerns about [concise nature of issue] and our ability to move forward, these are the deliverables we discussed and the dates we agreed they are due: 

Bullet points 1-5: Deliverable summary. Date due.

Thank you for your attention to this. Looking forward to our meeting on [Date, Time], to review our progress and next steps. 

Sincerely,

If the Concern Call was a disaster and there was no satisfactory resolution, you still send this summary of what you discussed and what they refused...and you combine it with The Notice mentioned below in 4b.

If you skipped the Concern Call and went straight to emailing The Caution, people who are professionals will respond, usually with a request to talk on the phone or they'll fire back an email. Expect a certain amount of surprise and defensiveness on their part. Remain objective and focused on the resolution. There will probably be some counter-negotiations. Document the final agreement and send it to them as The Caution Part 2. The point here is no surprises on a clear path forward.

People who are hiding from you will continue to do so. They will not engage or acknowledge. Regardless, they've been informed and you are armed for the next phase.

4a. Document The Improvement & The Plan for the Next 90 Days -- Desired Outcome, Continued Business Relationship
If the Concern Call and the Caution have been successful, then you're heading into the review meeting. If everything is delivered to your satisfaction, everyone is on the same page, and everyone is willing to go forward together GREAT. Send your partner a thank you note for taking your concerns seriously and outline your expectations for the next 90 days. Yes, thank them. Yes, document your 90-day expectations. This ensures that the resolution of one crisis was not an anomaly. Business relationships succeed when everybody understands the expectations and agrees to the deliverables. Will you have to have another status meeting at the end of 90 days? You should want to. If everything is going well, it should be a pleasant experience that ameliorates any weirdness or hostilities that popped up during the initial 30-days.

4b. Document The Notice of Termination -- Desired Outcome, End of Business
Assuming your business partner has failed to deliver on the items specified in The Caution and you actually have the follow-up meeting, the ball is in your court as to whether or not you give an extension or a chance for a re-do. If you choose to do so, repeat Step 3. Again, you send a follow-up note, summarizing the progress or lack thereof, the new dates, and the next follow-up meeting.

If your partner is ignoring you and/or doesn't show for the follow-up meeting then the note is very simple.

Dear Bob, 

Disappointed that the expectations we spoke about on [Date of the Concern Call] and that I laid out on [Date The Caution Email Was Sent] in the email titled [email title] could not be met by you. 

[Optional] Status updates on the bullet points from the previous letter.

As per our contract [if applicable], this letter serves as 30 Days Notice of Termination, effectively ending our business relationship on [Date 30 days from now].

By now, Bob knows this is coming. If he tries to dispute it, you have the documentation. Expect your business relationship to be dead at this point. If you're on a monthly retainer type of plan, you'll still owe them the money for the last month, just don't expect anything in return. Sad but true.

Anyone who's been in management will probably recognize the conflict & termination process as a modified Performance Improvement Plan (PIP). Being an author may not feel like being in Corporate, but there are lots of best practices we can borrow from big business when dealing with our small business.

If Your Business Relationship Is Ending due to a Predetermined Event/Time:
Even the best contracts expire and may not be renewed. Do yourself a favor and 90-days before that predetermined termination, verify that it is still happening. You don't want to be shocked by a detail that slipped past your notice or tethered by an auto-renew clause you didn't remember in the fine print. Plus, you want to kickstart the wind-down process for final deliverables, payments, and maybe even a party.



NOTE: Nothing contained in this post should be viewed as legal advice. The sample letters are intended only as illustrations.

2 comments:

  1. Great post, KAK! I love the concept of the "Concern Call." Yes - that's exactly what was missing in the anecdote I related. In fact, I privately related what the author in question told ME had been the issues and the agent had had zero idea those things had been problems. Alas.

    ReplyDelete
    Replies
    1. Thank you! it's too common to be hampered by a fear of confrontation that we allow ourselves to stew in dissatisfaction until cutting ties is the only thing that will satisfy us.

      Delete