Hiring Friends Won’t Destroy Your Business, But Terrible Communication Will

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“There are no benefits to having close, personal relationships with co-workers. None.”

A few weeks ago, I was cleaning out my desk drawer and found that quote written on the first page of my old journal. It was dated March 20, 2012. I can remember writing it—a little bit wobbly from boilermakers, very late at night—but couldn’t exactly remember why I felt the need to get this down on paper as an urgent reminder to my future self.

At that point, I’d been at MetaLab for 4 years, and it felt more like an ever-expanding group of friends than a successful design agency. We all spent just as much time together outside the office, whether it was grabbing dinner or beers, seeing movies, or going on impromptu trips. We even had a Facebook group where we’d post about what we were up to that night, just in case anyone wanted to join.

But there’s an obvious inevitability when a company full of men and women in their early 20s work together: everyone grows up. They realize the world is a little bit bigger than what they’d initially perceived it to be, and that their skills could take their careers far beyond where they are now. If not to a better job, then at least to a better city, or to some new experience, somewhere. Basically, we start entertaining a frightening possibility: maybe I won’t work here forever.

Mercifully, as business owners, we have the loyal people who stay with us and are steady as they get older, accumulate debt, fall in love, start families, and think about buying a house. But there are the few who stray outside the lines—the friends who veer off the path. These are the work-friends who you need to yell at, but can’t; the one you need to fire, but have too much love for.

That’s where I like to imagine that sudden flash came from: it was starting to become obvious that, yes, we probably couldn’t all be friends forever. Maybe it was a dispute about money, or a dispute about management that got blown out of proportion because we also happened to be friends. But the prospect was there that this person might leave, and that I might get burned.

At a fresh company, we often feel like we don’t have the freedom to make mistakes, and that we’re perennially one bad move away from bankruptcy. We feel compelled to throw out the baby with the bathwater at every turn, and we often make sweeping, dogmatic statements that will give us enough peace of mind to move forward. We’re obliged to get pissed off and transform that frustration into a hard-earned Startup Lesson™ that keeps us inching towards startup nirvana.

When we find ourselves in situations like the one above, we say stuff like “Don’t ever work with friends. It’s not worth it,” and pass that knowledge along to the next generation of founders who seek our advice (so, around 6 months later). This, in time, becomes conventional wisdom.

What this does, though, is prevent us from considering that maybe we need to change something. Something important.

Working with friends is the best. No, really. I'm serious.

Honestly, I’m amazed when I hear people say “Don’t work with friends,” and I’m doubly amazed that I thought that, even if it was just for a hot second.

Working with friends is the most wonderful thing in the world. Any exceptional job I’ve ever had has been done alongside people I cared about—people who mattered to me as real humans, not just as assets. It’s no exaggeration to say that working with incredible people is what makes work worthwhile. It’s what makes great ideas flourish. It’s what makes you want to actually go to work in the morning.

Hiring and working with our friends is not easy, but it’s not impossible, either. It takes a refined communication strategy and a complete willingness to be honest.

And typically, we end up working with friends out of complete convenience, which isn’t the most ideal way to begin the hard work of working with friends. But all the same, it’s how I ended up at MetaLab, and it’s how you’ll probably end up with a 24-year-old VP who’s never worked anywhere else.

Why we hire trusted contributors

The story is usually pretty dependable: things start taking off, it seems like we’re doing everything right effortlessly, and we think that maybe we’ve got the magic touch. That we’re the one in a billion outlier who doesn’t need to install real process—and part of the fun of getting started is riding without any rules for as long as possible.

So rather than conducting an exhaustive job search, we look nearby. We look towards what David Frankel calls “Trusted Contributors”—people within extremely close reach who exhibit at least some of the skills that we’re looking for.

This is, in a lot of cases, people who we’re pretty sure won’t pull rank on us—but it’s also people who feel closer to our station. As Frankel puts it, “...if you can be CEO fresh out of college, why can’t they grow into the VP role?”

After all, part and parcel with being a newly-minted business maven is the underlying idea that maybe we’re not good enough—that if someone who really, truly knew what they were doing was in the mix, they’d be appalled. Anyone—and I mean anyone—who has run a business has felt the pang of impostor syndrome, and adding some familiar faces to the mix—people you feel truly know the real you—creates some much-needed levity from the possibility that your tenuous house of cards is about to come crashing down.

Our trusted contributors are often people whom we badly want to see succeed: friends and would-be professionals who seem to us to have enormous locked potential. We tell ourselves that they’re just people who need a chance; that if we can find a way to light the fuse, they’ll take off into the stratosphere. And for the first time in our lives, we have the resources to help people in a meaningful way—something beyond getting drunk and telling our creative-ish friend what a good designer they are.

And perhaps expectedly, it doesn’t always work out beautifully. Business rarely does.

How we react when things go sour

There are a million different things that go wrong when a business starts to take off. Each day can make you feel like it’s genuinely impossible to carry on—that surely this is the pocket of turbulence that sends the whole mess crashing into a mountain. And in a way, we’re spoiled by certain types of drama. Say, for example, you decided to forego your usual contract for a client project, and they refuse to pay. There’s an easy lesson to learn there—next time, get them to sign that damn contract.

But a sudden litany of ‘soft’ management issues can be confounding—particularly in the age of people analytics, where even when we don’t hire our friends, we expect data, personality tests, and other heuristics to make decisions for us. As Daniel Goleman details in his excellent piece How to Coach a Smart but Clueless Leader, an ineffective employee is difficult and time-consumptive to turn around under even the best of circumstances—but it’s certainly not impossible.

The problem, though, is how we choose to react when we see a friend we’ve hired struggling, or maybe even revealing themselves to be completely unsuited to a role. We’re left to deal with someone who matters to us maybe a little too much on a personal level; in a weird way, they’ve become a ward of ours, and we get soft. The tendency when dealing with friend-employees is to become paralyzed: to be incapable of acting on either improving their standing or taking the necessary steps to remove them.

It’s an unfortunate reality that instead of viewing employees on a wide spectrum with opposing poles and making objective decisions, we have a tendency to go easy on everyone by pushing them towards the middle.

Henry Ward, CEO of eShares, detailed this illusion in “How to Hire”:

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Ward is talking about generally ineffective employees, but I think it translates perfectly to what we’d prefer to tell ourselves about a friend who may no longer be an ideal fit or who needs a serious reprimand: rather than confront the difficult decision we may need to make, we tell ourselves lies in order to punt the whole ordeal forward just a little bit, and convince ourselves that things aren’t as bad (or as exceptional) as they seem. Ward goes on to list a few of these lies, some of which I’m sure you’ve heard yourself say before:

   -He is trying really hard.

   -She deserves another chance.

   -People really like her.

   -I feel bad for him.

   -He’s good at other things.

   -He has stuff going on in his personal life.

   -She is in the wrong role.

Consider this: if we’re that bad at disciplining ineffective people under normal circumstances, imagine what we’re going through emotionally when we need to bring down the hammer on a friend, someone we really deeply care about, and whose success feels to us like a personal investment? The fact that they’re a friend just becomes another excuse as to why we can forget about their transgression.

Even though we distance ourselves from the problem, we know that there is one, and in the case of friend-employees, their distinction sticks out like a sore thumb: they were hired and are currently at the company under very specific, very preferred circumstances.

We take stock of their fuck-ups and say, “This would be so much easier to deal with if we weren’t friends,” but we’re really just looking for the ripcord: the easy way out of doing the hard work of good, honest communication. We say that hiring friends doesn’t work, but we typically make Startup Lesson™ statements like that in the precise moment we’re wading through a frustrating, seemingly insurmountable swamp of crap. During these times, we don't seek truths; we're too desperate for a conclusion to even bother looking.

The immediate dividends of hiring a pal

Think about what you’re getting when you hire someone you’d consider a friend. Right off the bat, you have someone with whom you’re comfortably honest: as just friends, you’d tell them if they did something to hurt you. You’d tell them if you were going through a rough patch (and if you wouldn’t, maybe you aren’t as close as you thought you were).  

This type of relationship, while not necessarily easily transposed to a work environment, lays the extremely difficult groundwork of a trusted team—the lack of which stunts so many young companies.

Several years back, Lynda Gratton and Tamara J. Erickson studied the collaborative behavior of 55 large teams and published their findings in the Harvard Business Review. One of their findings was the importance of what they termed “heritage relationships”—a team of people familiar with one another, either as friends or as people who have previously collaborated.

In particular, they found that if a team started out as a group of strangers, they were forced to invest a significant amount of time in the work of just getting started: things like building trust, which can exist out of the box if you’re hiring a good friend.

However, it’s not when things are going well that we run into problems with working with friends: it’s down the line, past the honeymoon period of great honesty and trust. It’s then that we need to throw some shade, and lay down the law.

The important task then, and seemingly where most fail, becomes maintaining that initial trust and exceptional communication with your friend, extending it to all areas of your relationship with them, and ensuring that your once-friends-now-employees are being treated as equitably as possible. This demands that, for better or worse, you maintain the honesty that made you such close friends to begin with, but can also do what you need to do if things go south.

Care personally, challenge directly

In her phenomenal talk at First Round Capital’s CEO Summit last year, Kim Scott introduced a communication concept that quickly became a popular phrase in the startup world: Radical Candor.

As shown below, radical candor is the quadrant where honesty and personal relationships—those two absolute essentials of communication—are able to live together in blissful harmony.

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Given that the primary sub-complaint of working with friends is the seeming inability to give them the gears when you need to and risk ruining the friendship, a communication strategy that advocates honesty and compassion will be your best friend. And the beauty is that even before you start working together, you’ve already experienced Radical Candor with your friends. It’s the cornerstone of any good relationship, and it’s precisely why it’s such an unbelievably powerful management tool.

To understand how important something like radical candor can be to a working relationship with a friend (and any employee, really), all you need to do is look at the other end of the confrontational spectrum: ruinous empathy. According to Scott, it’s where the vast majority of management mistakes appear. This anecdote from Scott might sound familiar to anyone who’s worked with a friend:

“There was this guy who was working for me. We'll call him Bob. I really liked Bob. The problem was that Bob was absolutely terrible at his job,” she says. Whenever Bob would express worries about his performance, Scott would try to reassure him. But after nearly a year, she realized that Bob’s weak performance was impacting her whole team — and she was in danger of losing several top performers as a result. Trying to be 'nice' to Bob, she'd been unfair to the people who were doing great work. And things didn’t work out so well for Bob, either.

Having never criticized Bob for 10 months because I was trying to spare his feelings, I was now sitting in front of Bob firing him. Not so nice after all,” says Scott. When I told him, Bob pushed his chair back, looked at me, and said, ‘Why didn't you tell me? Why didn’t anyone tell me?’”

When we aren’t able to be honest with an employee—for the sake of their feelings, or our relationship with them—absolutely nobody wins. Scott’s employees lost confidence in her ability to run a tight ship. Scott, of course, had to fire someone who she’d spent months praising. And poor Bob lost nearly a year of his career doing something he wasn’t good at, and likely felt humiliated by the dismissal.

An important reality to recall is that while the friend you hire may owe you a debt of gratitude, you owe them, too. They’re entrusting you with their career, their future, their hopes and dreams. No matter what happens, they don’t deserve a career that stagnates because of your inaction. Saying “well, I guess you shouldn’t hire friends,” and letting that individual wallow is completely, unforgivably irresponsible. Everyone deserves complete honesty—especially your friends, if you still choose to call them that.

Scott recommends encouraging all of your employees to be radically candid, so that even if you have a hard time giving your friend the feedback they need, numerous other people on the team might not have an issue being so direct. And if it can become institutional, you might find yourself giving your friend the feedback they sorely need without even noticing.

The real problem: Communicating with everyone

Thinking back to that piece of paper from 2012, I can’t help but remember all the anxieties that were an undeniable part of every single workday. There were whole weeks when it seemed impossible to do anything right; that no matter how much effort we put into the business, the returns were tepid. Sometimes, the things that worked exceptionally well stopped working. Sometimes, the wild guesses were the biggest bullseyes.

When we’re starting out, and when we’re trying to scale, we so desperately crave axiomatic truths. They can sometimes seem like the only thing guiding us forward. But it's the pursuit of these truths that gives us stupid, misguided rules like “Don’t hire friends.”

Please, please, please don’t listen to stuff like this. You’ll risk missing out on an important opportunity to kickstart your company’s growth, the one described here by the great Gary Vaynerchuk:

When my brother AJ and I started VaynerMedia, we hired eight of AJ’s friends from college to get the ball rolling. After them, we hired a few more people to round out the organization, and continued to hire as we needed. Those initial eight people added something that I place a huge importance on: company culture. If you don’t care about your company’s culture, you will lose. We knew that these eight people would bring energy and attention to the company, that they would establish a fun, awesome culture right off the bat.”

And if you run into problems, recall that the problem isn’t communicating with the friends you work with; the problem is responsibly communicating with everyone you work with. If we aren’t shoring up communication issues early on and as we go, we’re really screwed, and nobody we hire will be able to fix the mess we made.

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-Photo:  Stan Laurel & Oliver Hardy, Sepia Charcoal on Paper, 1987, by Wasfi Akab

Laurel and Hardy's work and friendship, as told in Germ Magazine:

"Throughout their 30-year career, the magic that was Laurel and Hardy captured audiences and left them laughing long after the movie was over. But their off-screen friendship was special too as they both supported one another and remained a vital presence in each other’s lives."

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