Yesterday, I shared an interview featuring Howard Marks and his four steps to dealing with change (see here). Toward the end of the interview, Marks talked about his partnership with one of his Oaktree Capital cofounders, Bruce Karsh. He described partnership as an important part of a healthy work environment, which he has with Karsh and other Oaktree Capital founders.

So what’s the key to healthy partnership? Marks has a simple framework. Here’s the key to a healthy partnership (in all aspects of life):

• Shared values – You have to believe the same things about how you want to operate in the world. Marks gave the example that he and Karsh shared the view that they should invest by seeking moderate gains and avoiding losses. Said differently, they would aim for consistent returns rather than grand slams. Neither believed in shooting for the stars. Their values regarding their investment strategy were the same.
• Complementary skills – The key to success is having a well-rounded team that covers all the important areas—the team is strong in all key areas although each individual is not. If you have a team of really smart people who all specialize in the same thing, the team has a skill set hole that will likely cause execution and other issues. A better approach is to work with people who are strong where you’re weak, so you complement each other. This enhances the team’s ability to execute, and people won’t be stepping on each other’s toes.

I agree with Marks. I think partnerships that have both these things can do well. My gut tells me that many people understand the second point and seek complementary skills—opposites attract. But I don’t think as many people understand how important shared values are in a partnership. If you have complementary skill sets but polar-opposite views on how to go about things, you’re bound to have a day of reckoning and maybe even a huge blowup between partners.

If you’re interested in Mark’s full thoughts on partnership, take a listen here.