When “Everyone Knows” Stops Working

What are the signs that a startup’s informal communication has stopped working? In other words, when is “everyone knows what’s going on” no longer valid?

Marlene Chism: One of the first signs that informal communication has stopped working is that people begin interpreting the same priorities, expectations, or decisions differently.

The team may have once felt excited and aligned about the direction, but now decisions are repeatedly revisited, priorities compete, or people leave meetings with different understandings of what was decided and who owns what.

The signs aren’t always operational or immediately visible. Sometimes they’re emotional: growing resentment, hesitation, frustration, or distrust. These emotions often arise when people lack information and begin filling in the gaps by assuming someone else’s intent.

One of my tenets is that disagreement isn’t the problem; disrespect is. Yet when clarity deteriorates, ordinary disagreement can begin to feel like disrespect. Unspoken disagreement and untested assumptions invite people to misinterpret questions as challenges, changes as betrayals, or silence as resistance.

‘Everyone knows what’s going on’ is no longer valid when shared history is mistaken for shared clarity. That’s when it’s time for a reset, because clarity can change any situation.

You’ve coached leaders extensively about tackling difficult conversations. Which conversations do you see founders avoiding most often, and what are the consequences?

MC: If you ask founders why they avoid difficult conversations, they may say, “We’re all adults,” “It will eventually work itself out,” or “We all want the same things.”

A more self-aware founder might admit, “I dread how this person will respond,” or “I don’t want to face the outcome this conversation might create.”

At its root, avoidance is often an attempt to avoid an unwanted reality and the emotional discomfort that comes with facing it. The founder may lack the capacity to remain emotionally steady during a difficult interaction. In other cases, the founder simply lacks the conversational skills to address the situation directly and constructively. Some of the most common conversations founders avoid include telling a loyal early employee that their performance is no longer meeting the needs of the growing company, addressing a high performer whose behavior is damaging trust or morale, acknowledging that priorities have changed and that previous commitments may need to be reconsidered, confronting the reality that the founder or another key person has become the bottleneck, and clarifying roles, decision-making authority, and expectations as the company becomes more complex.

Avoidance doesn’t eliminate the consequences. It delays them and distributes them to everyone else. Employees begin compensating, creating workarounds, lowering their expectations, or quietly becoming resentful. Standards become ambiguous, accountability weakens, and the strongest employees may eventually leave. The conversation the founder avoids today usually becomes a more expensive business problem tomorrow.

Co-founders face a different dynamic. How do the conversations they avoid with each other differ from those they avoid with employees?

MC: Co-founders generally relate as peers, even when their equity or formal responsibilities differ. There isn’t always a natural hierarchy to rely on. With an employee, the authority to clarify expectations and address performance is usually established. Between co-founders, conversations about performance or behavior can become entangled with ownership, loyalty, identity, friendship, and competing visions for the company.

How should they handle it?

MC: Co-founders should decide in advance what their shared values are, how decisions will be made, who has authority in which areas, and how they will handle disagreement and resolve a deadlock. The best time to decide how you’ll handle conflict is before you’re in the middle of it.

When preparing for a difficult conversation, I use a simple four-question formula:

These questions move the conversation away from accusations and assumptions about intent. They help co-founders identify the observable problem, clarify the unmet expectation, and connect it to a business consequence. Once both people are clear about what the conversation is really about, they have a much better chance of solving the problem without damaging the partnership.

You’ve talked about how leaders fall into what you call the “Three As” when they mismanage conflict. Which of these shows up most in founders specifically, and what does it cost them as the company scales?

MC: I’m not sure that one of the Three As universally appears more than the others in founders. Under pressure, a founder may cycle through all three: avoiding, appeasing, and aggressing. But one pattern I often see at senior levels is avoidance disguised as delegation: the belief that conflict should be handled by middle management. To add another layer to the problem, it’s rare that middle management has had any training or development around managing conflict or initiating difficult conversations.

Avoiders usually recognize that they avoid and will readily admit it. Appeasers tell people what they want to hear to keep them happy in the moment. Aggressors may become angry, get loud, become overly directive, or shut down the conversation.

The truth is that all three patterns are forms of avoidance. Most people don’t think of aggression that way, but aggression shuts down dialogue and protects the aggressor from having to sit with difficult emotions, opposing viewpoints, or an unwanted reality.

Appeasing can be particularly difficult to recognize because appeasers often see themselves as peacemakers. But underneath appeasing are frequently empty promises, inconsistent expectations, and loose ends. What creates peace in the moment creates confusion later.

Certainly, managers must be equipped and expected to address performance, behavior, and conflict within their areas of responsibility. But founders cannot delegate conflicts involving strategy, competing priorities, senior leadership behavior, cross-functional tension, or unclear decision-making authority. I’ve seen top leaders hire a coach for a direct report instead of having a direct conversation with that person. Coaching may support the employee’s development, but it cannot replace a conversation the leader owns. Sometimes a coach is needed, but not for the direct report.

When founders push those conflicts downward, middle managers are left trying to reconcile contradictions they didn’t create and don’t have the authority to resolve. What appears to be delegation is actually avoidance. As the company scales, the costs multiply. Employees stop raising concerns, commitments become unreliable, difficult decisions linger, and unresolved issues are pushed downstream. Eventually, people learn either to tell the founder what the founder wants to hear or to remain silent. The business cost isn’t limited to morale. The founder loses access to accurate information, and no company can make consistently sound decisions when people are unwilling or afraid to tell the truth. The higher you lead, the greater your responsibility to address the conflicts affecting the entire organization.

You’ve described building what you call conflict capacity. What does that look like in a startup?

MC: Conflict capacity, as I define it in my book, From Conflict to Courage, has three components: the Inner Game, the Outer Game, and Culture. The Inner Game involves self-awareness, emotional integrity, and a commitment to personal growth. The Outer Game consists of the skills and expertise you bring to your work. Culture is the workplace environment, including the expectations, support, and opportunities provided for people to grow.

Think of these three components as a Venn diagram, with conflict capacity at the intersection. As strength develops across all three areas, people become better able to sit with what is difficult and respond with discernment rather than reacting from fear or defensiveness.

What does it do for the business?

MC: In a startup, strong conflict capacity means people can hear opposing views, accept feedback, surface bad news, tell the truth kindly, and disagree without disconfirming another person’s value. They can challenge an idea without treating the person who proposed it as the problem. Culturally, conflict capacity means that the founders support the decisions delegated to their managers and that decision-makers have the authority and will be backed up.

For the business, conflict capacity produces better decisions, fewer blind spots, less rework, and a greater ability to adapt as conditions change. Problems are surfaced earlier, before they become expensive, and the company becomes less dependent on the founder to resolve every disagreement.

Earlier you described avoidance disguised as delegation. Which conversations should a founder own personally, even after hiring managers?

MC: Delegation only works when authority is delegated with it. Don’t put someone in the middle when you need to be out front.

A founder should personally own any conversation in which the founder remains the key decision-maker. If you are the only person who can ultimately say yes or no, you need to be willing to participate in the conversation that leads to that decision.

Here’s an example: I’ve had executive assistants contact me to price a workshop or retreat without being given the organization’s objectives, parameters, budget, or decision criteria, and without access to the person making the final decision. They were expected to negotiate, but they had neither the information nor the authority required to move the conversation forward.

That isn’t effective delegation; it’s putting someone in the middle. It reduces a strategic conversation to price shopping and makes it difficult for either party to determine the right solution. A price without parameters isn’t a proposal. It’s a guess.

Beyond decisions about outside expertise, founders should remain personally involved in conversations about strategic direction, major changes in priorities, organizational values and standards, the performance of their direct reports, conflicts within the executive team, and commitments only they have the authority to make.

This doesn’t mean founders should insert themselves into every decision. If a manager has genuinely been given the responsibility and authority, the founder should allow that manager to lead. But sending someone into a conversation without decision-making authority creates activity without resolution.

Either delegate the authority or own the conversation. Don’t separate the two.

Anything else founders should know? 

MC: One practical solution I offer growing organizations is The Leadership Clarity Solution. Sometimes a leadership team needs to step outside the urgency of daily operations and examine where clarity has broken down.

The process begins with individual interviews with key stakeholders. I then deliver a briefing that identifies patterns, differences in perspective, and issues that need to be resolved. From there, I facilitate an offsite retreat where the team engages in critical discussions and learns a model or concept directly related to its current challenges.

Every engagement is designed around the organization’s situation. I meet the team where they are and help them determine what needs to change to move forward.

The process reflects what I call the Alignment Chain: Clarity leads to Conversation, Conversation creates Accountability, and Accountability protects Execution. The goal is for the team to leave with greater clarity, stronger agreements, and specific next steps that create momentum.