Business Transition Consulting LLC

A critical conversation is one where a meaningful exchange of information and opinion occurs; it is also likely to be a difficult conversation. Unfortunately everyday conventions of conversation and emotions of the moment often serve to divert and prevent critical conversations.

The advisor must know the principles of conducting critical conversations. There are some excellent books on this topic: Crucial Conversations – Tools for Talking When the Stakes are High, Kerry Patterson, Joseph Grenny, Ron McMillan, Al Switzer, McGraw-Hill 2002; Difficult Conversations – How to Discuss What Matters Most, Douglas Stone, Bruce Patton and Sheila Heen, Penguin Books, 2000; and Fierce Conversations – Achieving Success at Work and In Life – One Conversation at a Time, Susan Scott, Viking, 2002.

Frequently owners have not had meaningful conversations, or, if they have, the conversations have gone badly, and the topics have not been revisited. If these problems of communication are significant, then a behavioral expert, such as a psychologist, should be consulted. In any case, advisors should help owners to be aware of the basic skills of critical communication and facilitate critical conversations.

Also part of the critical conversation is the feelings conversation. The feelings conversation asks and answers questions about feelings. Difficult conversations involve emotion. In fact, difficult conversations are at their very core about feelings. Engaging in a difficult conversation without talking about feelings may save time and reduce anxiety, and it may seem like a way to avoid certain serious risks. If feelings are at the core of the difficult conversation, what has been accomplished if feelings are not addressed?

To be aware of feelings requires an acknowledgement of the identity conversation going on with each owner. The identity conversation is the conversation each individual has with himself or herself about what the situation means. The answers to questions posed in the identity conversation determine in large part whether an owner feels confident and centered or off-center and anxious. Three questions are common in the identity conversation: Am I competent? Am I a good person? Am I worthy of love? For each owner, thinking clearly and honestly about values and actions with respect to those values can help reduce the anxiety experienced during a difficult conversation and significantly strengthen an owner’s foundation in its aftermath.

Stone, Patton, and Henn explain that difficult conversations have an underlying structure, the “What happened?” conversation. This conversation involves disagreement about what happened or what should happen. Difficult conversations commonly involve “crippling assumptions” made regarding “trust, intentions, and blame.” Each party adopts an assumption: I am right, you are wrong. Difficult conversations are almost never about getting the facts right. They are about conflicting perceptions, interpretations, and values. Difficult conversations are not about what is true; they are about what is important. One owner will assume knowledge about the intentions of other owners, when the owner does not have that knowledge. When intentions are not understood, frequently they are supposed to be bad intentions. Assumptions about intentions derived from observed behavior frequently are incorrect.

Talking about fault is similar to talking about what happened – it produces disagreement, denial, and little learning. It evokes fears of punishment and insists on an either-or answer. Energy is diverted into defensive actions. Talking about blame distracts the participants and prevents a dialogue concerning why things went wrong and what corrections might be appropriate in the future.

The focus of a difficult conversation should be on understanding the contribution system. Other than in extreme cases, almost every situation that gives rise to a conversation is the result of a joint contribution system. Focusing on only one or the other of the contributors obscures rather than illuminates that system.

Stone, Patton, and Henn advise the participants in difficult conversations to keep three purposes in mind. These purposes are applicable to conversations about business succession between owners. First, the owner should explore the other owner’s perspective. What information does one owner have or perceive that the other owner does not possess or perceive? What past experience has influenced an owner? What is the owner’s reasoning for the owner’s actions? What was the owner’s intention – the purpose for the actions? How did other owners’ actions impact the actions of the owner? What actions are other owners taking that are contributing to the problem? What are the feelings of the owner? What does the situation mean to the owner? How does it affect the owner’s identity? What is at stake? Second, the owner should have a goal to express the owner’s views and feelings. Each owner should share his or her story. Third, given the knowledge derived from the conversation, what would improve the situation going forward? Are there creative ways to satisfy all owners’ needs? Where needs conflict, are there equitable standards that would help to ensure a fair and workable way to resolve the conflict?

The most stressful moment of a difficult conversation is often the beginning, but it is also a moment of opportunity. Difficult conversations should be initiated from the perspective of the “Third Story.” Every difficult conversation includes an invisible Third Story. The Third Story is the one a keen observer with no stake in the problem would tell. The Third Story is a description of the problem that rings true for both sides simultaneously. The Third Story recognizes that there is a difference between the parties without a judgment about who is right or whose view is more appropriate. Most conversations can be initiated from the Third Story to include both perspectives and invite joint exploration.

Once the owners learn to have critical or difficult conversations, what do they talk about? How do these discussions help to formulate a plan which then is the basis of a buy-sell agreement to enforce the plan? To effectively plan, each owner must have defined his or her values.