CEO at SafeTech and Airome Technologies, working in enhacing cybersecurity in banks and Fintech in Eastern Europe, ASEAN and Middle East.
We are used to thinking that business and friendship are incompatible. Many business cases reinforce this idea, though there are some exceptions.
John D. Rockefeller once said, “A friendship founded on business is better than a business founded on friendship.” You might agree with the well-known businessman that friends who start a joint business often end up losing their friendship, whether due to personal ambitions or money. Money, for example, can fog one’s brain, and some are able to leave years of friendship behind when counting money or discussing a big deal.
How can you avoid this in your own company? Below are my tips for navigating friendships in business:
1. Articulate goals and intentions.
Any business is created with some goal and is based on at least a high-level plan. This might be entering the market with an idea (i.e., a product or service) for investors and later cashing out, private development followed by passive income or really any other business model.
What’s important is that the potential founders have a common understanding of the goal and plan. Should this common understanding change, a new understanding should be articulated, detailed and written down. If you pursue different goals and follow different approaches, this is a warning that serious disagreements may wait for you in the future. When my friend and I began discussing our potential joint business, we did our best to flesh out how we see our business, what values we intend to pursue, what to do if we fail to share strategic goals and what might be a trigger for us to go our separate ways.
2. Allocate responsibility explicitly.
When founding a business between friends, the key is to allocate responsibilities, work out the rules and veto cases. With everyone tending to one’s scope, the owner of their scope will have the decisive say-so. If scopes overlap, conflict is inevitable sooner or later. In our case, our competencies were our scopes of responsibility. I reserved a decisive vote for sales and marketing, and my business partner for product line development and technical characteristics. During the 10 years of our joint business, confidence in each other’s competencies has been nipping conflicts in the bud, despite conflicting opinions every once in a while.
3. Ensure you both are working at the same speed.
If a business is around for a while, one of the founders may lose the momentum that initially pushed them to work around the clock. If this happens, it is important to remain synchronized with your partner, especially if they are the one who is still working full steam. Otherwise, an imbalance might lead to hard feelings and conflicts. So, from time to time, you need to discuss the tasks that fall outside your acceptable load limits, ability to delegate, and ways to let you and your partner(s) work in sync.
From my experience, friendship in business is possible and can contribute to a company’s survival amidst turbulence, as well as its further success. In the very beginning, my partner and I each weathered several downfalls, but when that happened, the other was always standing by and offering a shoulder to lean on. We helped each other overcome the turbulence not just as a partner, but as a friend. If I heeded the warning and didn’t get into business with my friend, I believe the company would have failed to survive that initial turbulence. While doing business with a friend, it is crucial to establish your goals and responsibilities from the very start, as well as to listen to each other.