My friend Nathan will tell you I just hate people (jokingly, I think), but when it comes to business you can't beat around the bush. Is someone's work not up to par? Tell them they need to step things up. Is the client not holding up their end of the work? Sit them down and (politely) talk about what they and you can do to communicate or work together better.
Sometimes it's going to be awkward and sometimes it's going to take some time to fix. And yes, one day you'll probably inadvertently burn a bridge or two, but more often than not it saves a lot of pain and headache that'll come from avoiding the reality of the situation until it's too late.
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