Gitana wrote:... but what do you do when you already started a business with that someone 4 years ago, when that someone was very efficient and active for almost 4 years, until now? This slow-down happened only "lately".
It is the sunk cost fallacy, a cognitive bias where we continue to invest resources and energy based on past rather than current information. You have built something over 4 years, but your decisions about what to do moving forward need to be based on who he is today, not who he was previously. You cannot recover previous resources. They are sunk. This is not a bad thing as sinking those resources established a 4 year business, but you don't want to make decisions moving forward based on some previous level of efficiency or activity on his part.
What are "escalating series of understood consequences" when dealing with your business partner?
You need to have a very clear, agreed upon understanding. For instance, missing a meeting hurts the bottom line. You need your partner to acknowledge this basic concept and then accept that if either of you miss a meeting it comes out of whatever pay/profits. A type of fine that applies to you both. Same could be said for an email that goes unanswered. The fine of say $200 for missing a meeting is a consequence, but it is more symbolic than anything else.
Most companies have a progressive system. You get a verbal warning, then written up, then a one day suspension, then termination. That gives a person 3 times to screw up and the 4th time the business relationship is terminated.
The way i see it, I can either stay, or go (and therefore terminate our business), hence my asking for "constructively"dealing with this - do i have other options?
If it is strictly a business relationship, there are not really other options. It is a business, not friendship, family, a charity, etc. Escalating consequences followed by termination of the relationship. It doesn't matter why his performance has deteriorated.
But when it is a family owned business or life long friendship, when there is an emotional attachment, then the business approach is not very palatable. It is cold, detached. If this is the case you try and work with them, helping them through the problem. In the meantime you, the business, and business relationships will suffer.