> ## Content Index > Fetch the complete content index at: https://www.philsimon.com/llms.txt > Use this file to discover other available public pages before exploring further. # When Partners Break Bad: Lessons From the ADP-Zenefits Fiasco - URL: https://www.philsimon.com/when-partners-break-bad-lessons-from-the-adp-zenefits-fiasco/ - Published: 2015-07-01T12:20:20.000Z - Updated: 2025-07-13T17:10:53.000Z - Description: Think that this can't happen to your company? Think again. - Author: Phil Simon - Tags: Social Media, Trends, Disruption, Frenemies, Innovation, Security, Smallbiz, The New Small, Twitter I've said it many times: [the long term has never been shorter](https://www.philsimon.com/the-long-term-has-never-been-shorter/). You can write a book about that statement and maybe one day I will. For now, suffice it to say that fortunes, plans, and partnerships can change in the blink of an eye. ![](https://i.imgur.com/eEDrVl2.png) The recent dustup between [unicorn](https://en.wikipedia.org/wiki/Unicorn%5F%28finance%29?ref=philsimon.com) [Zenefits](https://www.zenefits.com/?ref=philsimon.com) and [ADP](https://en.wikipedia.org/wiki/Automatic%5FData%5FProcessing?ref=philsimon.com) is a fascinating case in point. No doubt that you've heard of the latter, a stalwart of American business for more than 60 years. But what about the former? Not too long after receiving funding valuing the HR software company at [an eye-popping $4.5B](https://fortune.com/2015/05/06/zenefi%20sts-funding/?ref=philsimon.com), Zenefits found itself in a very public kerfuffle with ADP, one of its key partners. It's no understatement to say that [the two are at war](https://www.businessinsider.com/adp-and-zenefits-are-at-war-2015-6?ref=philsimon.com). The issues: products, alleged security and privacy violations, and the increasingly critical issue of [data ownership](https://blogs.sas.com/content/datamanagement/2014/05/01/big-data-who-owns-this-stuff-anyway/?ref=philsimon.com). As expected, [lawyers are now involved](https://recode.net/2015/06/10/startup-zenefits-is-sued-by-payroll-company-adp-over-access-to-data/?ref=philsimon.com) and the PR battle has begun. Each company has issued [public statements](https://t.co/pd46wPwaHA?ref=philsimon.com) on the matter, and plenty of influential folks on social media have chimed in largely against ADP. (This shouldn't be surprising. Sixty-year-old companies tend not to excel at Twitter and Facebook.) For instance: ![](https://i.imgur.com/sZAV6Ma.jpg) > Hey [@ADP](https://twitter.com/ADP?ref=philsimon.com) it's my account. I can invite who I want to help me manage it. [@zenefits](https://twitter.com/Zenefits?ref=philsimon.com) > > — Mike Bergelson (@mbergelson) [June 5, 2015](https://twitter.com/mbergelson/status/606934561809784832?ref=philsimon.com) > ADP wouldn't sue Zenefits if they weren't afraid of them. So you know which to choose. [https://t.co/XcMN6T8qa9](https://t.co/XcMN6T8qa9?ref=philsimon.com) — Paul Graham (@paulg) [June 10, 2015](https://twitter.com/paulg/status/608676253235867649?ref=philsimon.com) > Zenefits cofounder: The CEO of ADP threatened me like 'Dirty Harry' [https://t.co/4smDpbiqS1](https://t.co/4smDpbiqS1?ref=philsimon.com) [pic.twitter.com/eMGcjEOBZ0](https://t.co/eMGcjEOBZ0?ref=philsimon.com) > > — Business Insider (@businessinsider) [June 10, 2015](https://twitter.com/businessinsider/status/608721339504058368?ref=philsimon.com) Who's ultimately right here? ## Lessons If pressed, I'd go with Zenefits, not that my opinion holds any water with either party or the courts. In this post, I'm not looking to assess blame or excoriate ADP for its questionable tactics. Rather, I want to look at lessons that other companies can learn from sudden and public partner breakups. ### It's never been easier to copy products. ADP isn't oblivious to Zenefits' success. The former saw that that latter was making inroads. Why forgo that revenue? Why not launch a competing service? *Lesson: Change happens faster than ever.* ### Increasingly, data access and ownership are at the center of these fights. As the first tweet above references, key questions today involve data, as in: - Who owns this stuff? - Is it my data or the provider's data? - Who should be able to access it and how? *Lesson: Make sure that you ask these questions sooner rather than later.* ### These scrums will wind up on social media. The question is not whether this will happen; the question is when. Try containing anything these days. *Lesson: Good luck with that*. > The question is not whether these scrums will wind up on social media. The question is when. ### Regardless of who is right, customers will ultimately suffer. Think about all of the small businesses that have to scramble now to run payroll and send data to insurance carriers. As I wrote in *The New Small*, smallbiz owners are certainly resourceful and can deal with last-minute fiascos. Still, they would prefer to work *on* their businesses, not *in* them. Remember that [trusted friends can quickly become enemies](https://www.philsimon.com/?s=frenemies). *Lesson: Be prepared for exactly these types of contingencies.* (For more on this, see [When Vendors Attack \[Each Other\]](https://www.philsimon.com/when-vendors-attack-each-other/).) ## Simon Says: Prepare for the worst. Hopefully your organization will never come to blows with one of its key partners, providers, and developers. Foolish is the soul, though, who believes that it simply can't happen. --- [IBM](https://www.ibm.com/?ref=philsimon.com) sponsored this post.