The Partnership Government can learn lessons from Business owners.

The current situation with a hung parliament offers a very interesting parallel to the ways in which entrepreneurs may choose to run their business.

Typically, a business run through a limited company will have clear leadership and decision making processes, whereas a business run by a partnership will have more of a ‘decision by discussion and agreement’ approach.

At a micro level, the issues facing partners within a business when agreeing business strategies are very similar to those facing our new coalition Government.

There is no clear right or wrong approach to structuring a business, and there will be pros and cons to each approach. (Of course, this is only an issue where a business has more than one main contributor.)

In my experience, businesses tend to prefer operating as a partnership when there is a desire to retain the full involvement of all members in the decision making processes. It is sometimes felt that if authority is devolved to a particular board member to make decisions relating to certain aspects of the business, then the decision making powers of other key figures within the business will be diluted. And therein lies the challenge, both at a business and political level. But if a business is well governed, this isn’t necessarily the case.

The biggest disadvantage of the partnership structure is that decision-making can be slowed down because each time, a consensus needs to be achieved. The downsides of this are a loss of spontaneity and the ability to capitalise quickly on opportunities. All too often, it’s the “being in the right place at the right time” scenario that has meant an entrepreneur has achieved great success.

The ideal structure therefore, will be one where the experience of all key parties is harnessed, whilst enabling the business to maintain momentum and leadership.

And aren’t these dilemas exactly what is happening in Government right now? It took a number of days for the Tories and Lib Dems to strike a deal and form a coalition government. The view from business is interesting: initially a hung parliament was considered to be just about the worst thing that could have happened to the UK economy; just when it looked like the country was starting to climb slowly out of recession there was a concern that this ‘government by partnership’ could potentially mean more uncertainty and no real direction.

However a feeling is now beginning to emerge that perhaps discussion and agreement before decision-making will mean the decisions reached will be better considered and have a more positive effect. Whichever proves to be the correct view will become clear over time – in the meantime, let’s hope this new “partnership” Government can make some swift and effective decisions.

By Lesley Stalker, an EBA Expert