How to resolve conflicts between partners or stakeholders?

Conflicts are primarily a result of misunderstandings, and misunderstand results with miscommunication, while miscommunication happens when agreements are often done verbally in unclear terms, or with disregard to the possibility of misinterpretations. This seldom happens because of ill-intentions, and if ill-intention is the cause then it would not be possible to avoid even if all communication, particularly related to the conditionality of an agreement between partners is done in writing, let alone on stamp paper, or even in the presence of witnesses, and a layer.

So the character and honesty of intention is a prerequisite in any business relationship. Ability to execute as per commitments is another necessary trait as mere being nice does not suffice; an incapable partner will eventually fall short of his or her commitment and would keep excusing., and persistent lack of commitments can eventually lead to a potential conflict.

So finding the right partners becomes critically important, and there is no formula to guarantee if the person will fall short of his or her expectations. We cannot even say this for our selves. What is important is a mixture of character, honesty, capability, persistence, and commitment which if present would eventually lead to smooth business relations. 

The tendency to over-commitment is another possible cause of conflict, as this would lead to miss commitments, and thus toward conflict. Over-commitments could be a result of lack of self-awareness, and personal insecurities, as often people who overcommit are unable to set boundaries and find it difficult to say no when they have to.

So the key is to avoid people who are insecure, ill-intended, dishonest, and it is recommended that they are tested before taking on board as a partner. This testing is often done with smaller assignments or deals, and if they can fulfill their smaller commitments, then gradually they may be tested with bigger commitments. Often suppliers in the market test the new buyers likewise, and after a few deals they decide if they can offer supplies on credit, and if the buyer keeps honoring his or her commitments then the supplier keeps increasing the credit amount to the extent possible for them. It has been noted that often the relationship reaches a level where there is blind trust between suppliers, and their buyers (in a B2B context), and suppliers even supply more than what is asked even on credit because of the confidence they have in their buyers.

So now if the conflict has arrived, then the first cardinal rule to easily resolve is to look for misunderstanding or miscommunication, instead of doubting or judging the intentions of the other partner. As more than often the cause of a conflict is not in the ill-intentions rather in miscommunications or some other genuine unavoidable reasons. So if this principle is adopted, then eventually every conflict could be resolved by clearing the miscommunication which might have happened.

Miscommunication can also be due to a third person who might be feeding information to one of the partners regarding the other. So before entertaining such incoming pieces of information, it may be necessary to verify what this third person has said. Back bitters also need to be eliminated from the system when necessary.

Once the miscommunication has been resolved, then it may be necessary to ensure to eliminate the cause of miscommunication that may happen again in the future. Like writing down the terms of agreement paper, and agreeing on every aspect of the contract before proceeding with the actual business.

Excess profits and excess loss in business are often a source of conflict among partners when it has not been decided earlier regarding what to do in case if excess profits are to be reinvested or transferred to the personal accounts of partners, or in case of excess loss who will bear it, and in what proportion. Conflict due to excess profits and excess loss may happen in particular when partners’ level of commitment is not equal like one is spending more time, while the other is not.  To avoid this, quantification of responsibilities and level of involvement in business in measurable terms may be necessary, in advance.

In the end, it all depends on the character, and how big the hearts of both partners, and if they tend to doubt the intentions, then even self-fulfilling prophecy (when our expectations influence the behavior of the other person, and when the other person behave as we expected, we exclaim, aha!) can turn the partners against each other despite no genuine reason.