Working with family and friends? Let’s make it work!
Source: Hindustan Times
Welcome back dear entrepreneurs. Allow me to pick up where we left off. In the last post we discussed when a business partner was really needed. In this post we will analyze the possibility of that business partner being family or friends.
The concept is a tried and tested one. While some come from business families, and some want to break away with changing times, others dream of building their own dynasties (usually with friends, late night, after a few drinks, and holiday planning).
To begin with, let’s look at the 2 critical reasons why working with family and friends is so common and why it works –
Cultural similarities – you share similar values, views, and preferences. This means people would generally follow a similar code of ethics, values, thinking and working styles. This makes it easier to communicate thoughts and ideas, and smoother work dynamic, especially in the early stages where everyone has to pitch in. By way of generalized example, entrepreneurs from Punjab are known for their bullish enterprising spirit, while businessmen from the trading communities are known for their measured understated restraint.
The downside – could be the lack of diversity in thinking which could mean fewer differing perspectives which are needed in a competitive business environment. What also tends to happen is that the person with the least say or stake often tends to be overlooked or go unheard even when they may have valuable inputs – sowing seeds of discontent in the long run.
High levels of trust – people are most invested if they have their skin in the game. After all, we don’t think our own family member or close friend with betray us or do something that will harm our joint interests. This has been exemplified with some of the largest business houses in India being family enterprises that have evolved to accommodate growing family members.
The downside – oftentimes we find people ill-suited for a role in critical functions. They could be the top boss’s eyes and ears on the ground, or because the management doesn’t know how to fire or reassign a family member or friend without upsetting the personal dynamic.
We now know the two major reasons why working with family and friends works, and where it can cause friction and complications. To avoid these, and to ensure that work doesn’t go home, and vice-versa, I recommend an easy two-stage process to my clients –
1. Boundaries – one needs to establish clear areas of operation, ideally with the effort to train or place people basis their qualification, interest and aptitude – like at any other job.
This ensures efficiency, effectiveness, and growth opportunities for the individual. It also results in lesser operational overlaps and conflict, and fewer opportunities for other work partners to exploit a fault line within the family or friendship.
2. Conflict resolution mechanism – some form of disagreement is inevitable, despite establishing clear boundaries. Given the delicate nature of personal relationships, one needs to be doubly careful.
I recommend clients to have the tough conversation about the various scenarios and what would need to be done as and when they surface. Depending on the scale of the business these could be done with the help of an HR expert, an external guide or in person.
The big pay-off – you get to keep your business and your relationships. Over the course of research in addition to my personal experience, the biggest regret and learnings entrepreneurs had was having to choose between work and relationships. Invariably losing both, or feeling like they lost both even if they managed to hold on to one of the two. Working with family and friends is trickier than hiring external talent and developing deep bonds over time. However it does not need to be an either/or situation. I do believe, in this case at least, people can have their cake and eat it too.
