The strategy session starts well. After half an hour the target picture is set: in 5 years, an agency with 30 people, and no single client bringing in more than a fifth of revenue. Same vision as on day one.
Next item: what do we do with the profit? Three hours later you haven't moved an inch. One of you wants to pay it out, because he has been working below market salary for years. The other wants to put all of it into two new hires, because otherwise the target picture stays a picture. Both of you invoke the same vision. Both of you think the other is being unreasonable.
This is the pattern that breaks shareholders apart. Not the goal, but the decisions on the way there.
You Rarely Fight About the Goal
A vision is generous. It's abstract enough for everyone to find their own version in it. Nobody says no to "We want to grow."
Decisions aren't generous. They force you to choose between two things that both sound good. Safety or speed. Keep the difficult client or let them go. And each of you reaches for your own yardstick, usually without noticing: one asks what keeps the risk small, the other asks what moves things forward fastest. Neither yardstick is wrong. But if you judge by different yardsticks, you reach different answers to the same question and take it for a dispute about facts.
Values Are the Yardstick, Not the Opinion
A dispute about facts can be settled with better numbers. A dispute about values can't. You can run the calculation three times, and the shareholder who values safety most will still find the investment too risky. He reads the same numbers through a different lens.
How your value system decides which clients and employees fit you is explained in CORE Dynamics: Why Your Value System Decides Which Clients and People Fit You. Between shareholders it gets sharper. You can let a client go. A fellow shareholder is someone you've brought to the table for years, and he has a say in the big decisions.
Your CORE Type shows how you work. Your value system shows how you measure whether a decision was right. Shareholders sometimes look at the first before they found a company together, at the second almost never. The idea behind it is explained on the CORE Dynamics page.
4 Decisions Where Co-Owners Part Ways
These 4 forks in the road come up in almost every agency sooner or later.
Pay Out or Reinvest
If you rate safety highly, you want reserves and fair pay for your own work. If you rate growth highly, every euro paid out is lost momentum. The conversation goes round in circles every year.
The Big Client with Bad Terms
A large corporation offers a big framework contract, with long payment terms and a tone that isn't good for the team. For one of you, this is the chance you've been waiting for. For the other, it means giving up what the agency was supposed to stand for.
Letting Go of a Long-Time Employee
Someone who has been there from the start no longer fits what the agency needs today. One of you asks what the results demand. The other asks what you owe this person. Both questions are legitimate, and you can't offset one against the other.
The Pace of Growth
Hire now, or only once the money is in the bank? Whoever needs predictability wants clean processes first, whoever is after results wants the people first. At some point someone says "You're planning us to death," and the answer comes back: "And you're burning through our money."
Under Pressure, the Gap Widens
Differences like these rarely wear off over time. In calm phases there's enough money and time, and small deviations don't hurt anyone. Under pressure that flips.
Picture a shareholder who always stood for "We decide everything together." Then your biggest client threatens to leave, and two days later he has sent a discount offer on his own. To him that was crisis management. To his fellow shareholder it was a breach of trust.
That is rarely hypocrisy. In normal times he lives by his ideal, and under pressure he falls back on a different yardstick. If you know that about yourself, you can say so in advance. If you don't, you'll think your solo move was necessary and your partner's anger an overreaction. How your behavior shifts under pressure, and what your partner gets hit with first, is the topic of You Under Pressure.
It gets expensive either way. A mis-hire on the team quickly costs an agency 20,000 to 50,000 euros by our openly published estimate, and the calculation is in What a Bad Hire Really Costs Your Agency. For that kind of mis-hire there are ways out. A shareholder stays. How he can leave depends mainly on your articles of association or shareholder agreement (the German Gesellschaftsvertrag), and against his will it usually takes good cause. Until you've found a way to deal with the difference, you'll fight each other at every fork.
From Fight to Translation: 4 Steps for Co-Owners
Value differences don't go away. You have to be able to translate them.
1. Name your own yardstick honestly. Not the one from the mission statement, but the one you decide by when things get tight. Look at your last hard decisions: did safety tip the balance, or speed, loyalty or fairness? The honest answer is often uncomfortable.
2. Read the other person's yardstick. Which question does your fellow shareholder always ask first? "How exactly will this work?", "What does it get us?", "What does it mean for the team?" or "What if it goes wrong?" That first question tells you more than any debate about principles.
3. Translate instead of persuading. Instead of "Why can't you see it?" you ask: "What do you need so you can agree to this decision?" If your partner needs safety, you bring the plan B. If they need speed, you bring the start date. You don't give up your yardstick. You speak in theirs.
4. Set decision areas in advance. Agree who has the final say in which area and when you both genuinely have to agree. What that looks like as a simple overview is shown in the seat map for founder duos. Which parts of it belong in your contractual agreements is something to settle with professional advice.
This article is not legal or tax advice. What applies to you depends on your legal form and country, and that is something to settle with a lawyer and tax advisor.
Co-owners rarely fall apart over the vision. They fall apart over the decisions along the way, because each of them judges what is right by their own yardstick. If you know the yardsticks at the table and translate between them, you decide faster under pressure too.
FAQ
Why do shareholders fight even though they share the same goals? Because a goal is abstract enough for everyone to agree with. The decisions along the way are concrete, and each person judges them by their own yardstick. It looks like a dispute about facts and is really a dispute about values.
Can different values between shareholders be brought into line? Rarely, and there's no need to. It's enough that you know the other person's yardstick and can translate into it.
When should shareholders talk about values? Ideally before anyone takes a stake, at the latest before the next big fork. If you only talk about it in a crisis, you're talking to the version of your partner with the least room to move.
Know your own yardstick before you interpret your partner's. What lies behind value systems is explained on CORE Dynamics. The starting point is the free QuickCheck: it shows you your CORE Type and your Best Seat. Join the waitlist and you'll be the first to know when it launches. If each of you takes it separately, you'll be talking about two honest CORE profiles instead of guesses.
About the Author
Founder
Joram Hoefs is the founder of CORE-Navigator. With over a decade of experience in business consulting and personality diagnostics, he has made it his mission to develop data-driven tools that help entrepreneurs understand and leverage their unique DNA.
More posts by Joram Hoefs