How Does Cofounder Conflict Affect Company Culture?

By Dr. Matthew Jones, PsyD, licensed psychologist and cofounder coach

Most founders assume the tension with their cofounder stays between the two of them. In my work as a licensed psychologist with hundreds of founding teams, I’ve found that cofounder conflict shapes company culture long before anyone names it out loud, and the way the two of you handle stress and conflict becomes the template the rest of your company follows.

What follows is a Q&A on this topic. I hope you find it useful.

Can my team tell my cofounder and I are fighting?

Yes. Your tension with your cofounder is already in the room, whether either of you says it or not. People read body language and they feel interpersonal tension. It shows up in your meetings: who interrupts whom, who questions whom and with what tonality, how the conversation flows, and whether one of you is silent, sulking or withdrawn. The more often you fight, the louder those signals get. It also shows up in the work. If the two of you aren’t synced on priorities and sequencing, the organization isn’t either. Someone takes a task from one of you and then hears from the other that it’s not what they should be working on. Work gets redone, information gets stuck, and priorities never sync up. A fight between two people becomes the culture of the entire company.

Why does cofounder tension affect employees so much?

Your emotional state carries more weight than anyone else’s in the company. As a founder, you get idealized and propped up, and you hold status and power in multiple forms. Mostly unconsciously, people project onto you. You come to represent their parental figures and how they relate to power, so your responses carry far more weight than you’d expect. Psychologists call this emotional contagion. Elaine Hatfield, John Cacioppo and Richard Rapson laid it out in their 1994 book Emotional Contagion: emotions spread through groups as people unconsciously mirror the emotional states of those around them. Between cofounders it’s amplified, because your authority and visibility mean your team absorbs your tension faster than anyone else’s. When the two of you are tense in a meeting, the room stays tense after you leave.

The simplest way I can explain it is the relationship between children and their parents. When parents are fighting, the children often have no idea what the fight is about, and they still feel it. They read the tone at dinner, the door that slams a little too hard, the silence in the car. They can’t fix it, they can’t leave, and they depend on both parents. So they adapt. Some drift toward anxiety, some act out, some take a side, some become the peacemaker and the perfect child, and others go quiet. Your team is in the same position. Their livelihoods and identities are tied to the two of you, and they have far less control than you do. When the CEO and CTO are at war, even if nobody says the word, their distress goes up, their sense of agency goes down, and their ability to execute goes with it.

Why do employees take sides between cofounders?

Employees take sides because they find whichever founder keeps them safest. Say the CEO is telling people the CTO is underperforming. If I’m an employee, it’s in my best interest to align with the CEO: to backchannel, keep feeding them information and figure out how they think, because they hold more power. I’ll appease the CTO, stop giving him real feedback and route everything to the CEO, because that’s how I secure my position.

In family systems theory this is called triangulation. Murray Bowen, who developed family systems theory from the 1950s through the 1970s, described how a third person gets pulled in to absorb tension that gets too high between two people. That diverts attention from the original conflict, so the conflict between you and your cofounder stays frozen. Being the messenger or the ally feels good to the employee, because it says “I am valued here.” It’s also overwhelming, it disrupts their ability to execute, and over time it increases their anxiety. The first people to pick this up are often what I call parentified employees: people tuned into the emotional environment and wired for caretaking, often in roles like head of people, HR or chief of staff. Some founders make the mistake of having those people facilitate conversations for them, which creates secondary dysfunction across the organization.

You can reinforce this without noticing. An employee vents to you about your cofounder, and you’re frustrated with your cofounder too, so you sigh, agree and maybe elaborate, instead of coaching them to bring that feedback directly to your cofounder. The back channel gets stronger, and information stops reaching the founder who needs it most.

Why can’t I see how our conflict is affecting the company?

The skill that lets you build a company is the same one that hides cofounder conflict from you. Founders know how to push forward. You avoid, you sublimate and you suppress, and that helps you keep taking action in spite of challenging circumstances. So when there’s a problem in the most important relationship in your business, the default is to shove it aside, downplay it and let it accumulate while you focus on what feels more urgent. Those same defenses make it much harder to see how other people are being impacted, how much it’s slowing your decisions, and what it’s doing to your own wellbeing. Every time you see a Slack message from your cofounder you feel sick to your stomach and want to delay, and you tell yourself a story about how they’re underperforming or not committed.

How do we fix cofounder conflict before it shapes our culture?

The order matters: stop minimizing it, get realigned with your cofounder, and only then model the culture you want to create. Stopping the minimizing comes first because it’s clearly impacting you, your cofounder and your employees. Startup Snapshot, a research organization I’m part of, studied startup employee wellbeing and found that employees working under a highly stressed founder reported 14% higher rates of burnout, and that founder transparency about the company’s challenges was one of the biggest predictors of employee wellbeing. Your team already knows. Owning the impact doesn’t mean airing your problems with your cofounder to the team. It means owning, for yourself, the effect this has on them and on the organization’s performance, because it touches execution, standards, how conflict gets handled and whether feedback gets given at all.

Getting realigned with your cofounder comes before anything you do with the team. This is the work of cofounder coaching, and the Institute for Founder Dynamics keeps a directory of coaches who specialize in working with startup cofounding teams. In The Cofounder Effect I wrote out the Cofounder Conflict Navigation System, a three-phase process for preparing for a hard conversation, having it together, and building communication that holds up afterward, so teams can start realigning even without a coach. When the partnership isn’t working, it’s like rowing a canoe with one hand and no paddle. When you’re aligned, you’re rowing in the same direction at the same cadence. It’s a completely different game.

How do founders model the culture they want?

Once you’ve realigned, you model the culture you want, because your team copies what you do, not what you say. Lean into lived values, not aspirational ones. You need congruence between what you talk about, what you expect from your team and how you actually behave. They need to see you disagree and realign, or disagree and commit, because that gives them permission to do the same. Because of the power gap, watching the two of you disagree well doesn’t mean they’ll feel the same freedom and latitude. You need to ask for their pushback directly, and handle it well when it comes. Culture isn’t what you say. It’s what you reinforce. Get those three steps right, and information starts flowing through your company the way it should.

Every week the two of you stay misaligned, your team spends part of its time managing you instead of building the company. If you and your cofounder are in this right now, you can book a call with me at https://calendly.com/cofounderclarity/intro.

Author Bio

Dr. Matthew Jones is a licensed psychologist and cofounder coach, founder of Cofounder Clarity, and cofounder of the Institute for Founder Dynamics (founderdynamics.org), a nonprofit advancing the science and standards of cofounder partnerships. He is the author of The Cofounder Effect and has worked with hundreds of founding teams. Watch his videos at youtube.com/@CofounderClarity.

Cofounder coaching guide: https://cofounderclarity.com/cofounder-coaching. It’s the next read for anyone at step two who wants to know what realignment work with a coach involves.

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