Recipes for Business Success #3
Posted on 25.08.2021 at 17:09
By Denis Kalemberg, CEO
Part 3: Friendship In Business
Business Built on Friendship
We are used to thinking that business and friendship are incompatible. The majority of cases enforce this concept, though, there are some exceptions. “A friendship founded on business is better than a business founded on friendship” (John D.Rockefeller). You might agree with the well-known businessman that friends who start a joint business often end up losing their friendship. This is mainly due to business being based on relationships, personal ambitions, and (of course) money. Money may fog one’s brain, and many readily leave years of friendship behind when counting money or discussing a big deal.
Rule 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 (product, service) for investors and later cashing out, or 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.
Rule 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.
Rule 3: One Speed
If a business is around for a while, one of the founders may lose their momentum, which initially pushed them to work around the clock. If this happens, it is important to remain synchronized with your partner that may still be working full steam. Such 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.
Summing up, 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, we weathered several downfalls, each smashing one of us, with the other standing by and giving a shoulder to lean on helping to 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 that you trust and share common interests and values and that you are in rapport with, it is crucial to apprehend your goals and responsibilities from the very start and listen to each other.