10 Cardinal Rules for Working with Friends

Marissa Levin
Marissa Levin
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Ask any business owner if they’ve ever worked with friends, and you will likely get a yes. How they answer you (with a scowl or with a smile), will determine if it turned out well.

One of my clients is WAKA, an 18-year old company that has put kickball and social sports for young professionals on the map. The three owners  have been friends for more than two decades. They have mastered the art of “working with friends.” This doesn’t mean they haven’t experienced turmoil or conflict. In fact, one of my key roles in working with them was to help them move through some inertia that was stalling their continued growth. They have aggressive growth goals over the next 3-5 years, and decision-by-consensus was slowing momentum.

Nevertheless, these three life-long friends have managed to maintain and strengthen their brotherly bonds as they’ve built their business. So how have they done it? They’ve followed what I have identified as the 10 cardinal rules for working with friends.

1: Alignment of core values regarding life and business. It would seem natural that our friends would share our values, but this isn’t always the case. If we’re going into business with anyone, there must be alignment of values. If you are a high-value service provider but your friend is focused on being a low-cost service provider, you’re not driven by the same outcomes. If you are a workaholic, but your friend is focused on work-life balance, you are misaligned regarding focus. Misalignment of values is a non-starter.

2: Clearly defined roles & responsibilities. What is expected of each person? You would never hire a stranger without clearly defined roles & responsibilities. Clearly spell out what you expect of anyone you work with, and what they can expect of you.

3:No exceptions to any rules: All restrictions/processes apply. When I started my first company Information Experts 20 years ago, I hired a friend as a sub-contractor. She was required to sign a non-compete and a non-disclosure agreement, like all of my subcontractors. If I showed favoritism, this would have set a precedent that rules only apply to certain people in my company. Sadly, she violated both documents. She stole my content, and solicited work directly from my client. Again, I had to set a precedent with this situation. Our attorney issued a cease-and-desist letter, demanding that she cease solicitation. My client broke ties with her, I fired her, and that was the end of the friendship. This goes back to Rule #1: Alignment of core values. She valued money more than our friendship.

4: Respect of financial arrangements. The mixing of money and friendships, especially in business, is a potential landmine.  Should you decide to work with a friend, do whatever is necessary to minimize financial friction. Stay away from loans and promisory notes. Pay your friend on time, in accordance with the agreed upon terms. Working with a friend is not permission to take financial advantage.

5: Respect of the value and worth of each party. This past week, I had conversations with two good friends that own businesses, who are experts in their fields, that feel disrespected, devalued, and taken for granted by friends they’ve worked with. They both chose to charge their friends significantly discounted rates for their services. This is a terrible idea, and almost always backfires. A true friend would not expect another friend to decrease her market rate, which is essentially communicating, “I don’t think you are worth what you are charging others.” Conversely, the friend that discounts her rate ends up feeling as if she’s giving away her services. “I felt bad” or “I felt guilty” is almost always the outcome.

6: Establishment of a way out of the business arrangement. Every business arrangement requires an “out” clause, and this situation is no different. Discuss ahead of time the possibility that one may want to terminate the arrangement. Should that occur, exit gracefully and graciously. Don’t make it personal, and don’t take it personally.

7: Respect of confidentiality. As with any business relationship, do not discuss your business with others. Don’t share proprietary company information, don’t discuss the relationship challenges, don’t gossip. Treat the business part of your relationship with utmost respect and confidentiality.

8: Ability to have difficult conversations. Difficult conversations are stressful. Especially when we blend our personal & professional lives, there is a lot at stake if a difficult conversation goes wrong. However, not having the conversation is even worse. Trust that you can have a respectful, constructive dialogue, and make it happen to move past any feelings of resentment or anger that may be building.

9: Care and feeding of your friendship outside of the business. To preserve the friendship, set aside time to just be friends. Grab lunch, go to a movie or a museum, or text/email/call with no business agenda – just to say hello.

10: Finally, Remember Rule #6 from my last column. Don’t take yourself so seriously. It’s just business. Businesses come and go, but our most important friendships endure.

A Note about mentorship, service donations, and trades

We all have much to contribute to others! Mentorship and pro-bono or discounted services are wonderful ways to help others move forward, especially when we can help socially impactful organizations fulfill their missions. When we agree to mentor someone, or donate our services to a non-profit, we still must spell out the terms so that both parties know what to expect. The only thing missing is the exchange of money.

I have done many successful trades for service as well. Again, spell out all terms & conditions so that there are no surprises. These arrangements are still business relationships.

In Other SC News….

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Successful Culture accepts applications for its TransformU coaching program on a rolling basis. All one-on-one coaching spots are currently filled, however, we will open more spots in 2nd quarter. The TransformU coaching program is only for CEOs and leaders seeking a high level of accountability, who are ready to build the right foundation, and move to the next level of growth. All engagements follow a customized road map to move the client from current state to desired state. A mandatory skype interview and online assessment will determine if the TransformU program is a fit. You can learn more about the TransformU program on the Successful Culture website here. Please email me at [email protected] with any questions.


The Annual SC Customer Appreciation Luncheon Was Amazing!

I recently honored about 40 SC clients at our annual Customer Appreciation Luncheon. I spoke about the gifts that each client brings to the world every day in their own business accomplishments, and expressed my gratitude for their trust in my leadership to move them forward to the next levels of growth. Everyone made important connections too! I can’t wait for our Spring community gathering. Will you be engaging Successful Culture to help with your growth, and joining us too?

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