Generally, the partnership management provides more advantages than running as individual ownership. However, if the partnership is not governed by clear policies, terms, it will result in chaos, affect the business as well as affect the relationship among the partners.
some of the typical challenges in a partnership firm among the directors or partners
1. Clarity on sharing responsibility and accountability
2. Communication issues
Above challenges lead to decision dilemma or delay in decision making which affects the business profitability and growth.
1. Clarity on sharing responsibility and accountability :
One of the common practices, we are seeing in most of the emerging organization is that all the directors involved in all management activities. In this process, end of the day, nobody is accountable for the business results as each one aware of the proceedings and get convinced about mediocre performance. Also, as everyone is involved in a particular business issue, the biggest dilemma arises as who has to take a final call or decision on the problem. People love to discuss the problem, challenges, ready to brainstorm and when coming to accountability on result or consequence, stuck on mainly on the decision making.
When we see this pattern in one of our client's operations, we had advised having a clear portfolio for each director by defining roles and responsibilities. (But, already they have a designation for each director with functional orientation !!) Also, we had set the KPI for each one to bring the accountability on the results.
This had resulted in clarity among the directors and they felt their personal productivity also increased. Also when coming to business decision making, the clarity on responsibility and accountability helped them to take quick decisions which affecting their function as well as the business.
2.Communication issues :
one of the reason for everyone to get involved in all activities is due to lack of structured communication process among the directors. Each one of the them wanted to be included in all activities with the intention to avoid communication problem or relationship issues among them.But this leads to only time consumption and delay in decision making.
Also, the organization instills mediocre performance culture and in some organizations, people at middle management take advantage of the multiple director's management styles.
when we come across in one of the client , we suggested two methods to overcome communication issues
1. Weekly Review Forum for all directors to share, review weekly key performance like sales , financce and other important business issues
2. Common KPI sharing among the directors on Google share
3. Monthly Executive meeting to review P&L before 10th of every month
The above solutions approach helped the partnership organization to overcome the typical challenges faced by the partners and also helped them with personal productivity !!