Boundaries

I have written before about the risks of going into business with friends. But what if you find yourself becoming friends with employees you hire in your business? This is the question that one of our student entrepreneurs asked while we were chatting in my office the other day. He had observed other young entrepreneurs becoming buddies with his employees and wasn’t so sure that was a good practice.
In a small business becoming friends with employees is natural. A small group of people working closely with each other toward common goals often develop friendships. You all suffer together through the trials and travails of start-up and early growth, which can create strong bonds. We know that facing common adversity is powerful for building teams. Such camaraderie can be a critical element in building a strong culture in the business and in creating loyalty among your staff.
But it is important for the entrepreneur to keep certain boundaries as such friendships develop.
No matter how strong the team becomes, the entrepreneur is the one person who is ultimately responsible for the outcomes of the business — the one who personally has everything on the line. Hard decisions will have to be made at critical points in the growth of the business. And no matter how hard it may be, the entrepreneur must make the best decision for the future of the business even if it may not be in the best personal interest of all the individual employees.
Although employees can become intensely committed to your business, they are never as invested in the business as the entrepreneur. At some point to them it is just a job. Even if they become your friends, their loyalty will have its limits and at some point their self-interest will kick in. While the entrepreneur has no real ability to exercise a better option if one comes along, any and every employee does.
There are certain things you should never share with your employees, even if they have also become your friends. Because they become your friends you may feel that you can share with them your deepest fears about the business. This is a mistake. First and foremost you are their leader. It is your job to communicate confidence and commitment to the vision, even when times are tough. You need to be what I call their emotional shock absorber through the tough times. They will know when things are not going well. Your confidence and commitment will be what can keep them on task doing what needs to get done to make it through rocky times. If you share your fears and doubts as you might with a good friend, you run the real risk of creating a climate of hopelessness and defeat in your company.
To understand what friendships between employees and entrepreneurs are all about, we have to understand the root of friendships in business. Some are true friendships — they transcend and outlive the limits of the business relationship. I wrote a while back about such a true friendship between my father and his mentor. While their friendship began through work, it endured for many decades after their work life together had ended.
Some friendships at work are more instrumental in nature. Being your friend is part of the whole package of employment or some other business relationship. At its core it is a friendship tied by economic bonds.
The difficult aspect of friendships in business is that you never know which type is which. Is it a true friendship or an instrumental one? Most entrepreneurs who have been through an exit, be it through a sale or through closing a business, talk about how very quiet the phone can get after they exit the business. Many comment how much more open their social calendars become.
The good news is that those who remain friends are people who are truly your friends. One entrepreneur told me how surprised he was as to who these true friends were. They were not the people who had seemed so intensely connected to them when they were in their business. Rather, it was people who had seemed a bit more on the periphery. So we may never really know which are merely instrumental until the economic nature of the friendship is severed.
At the end of our discussion my advice to the student entrepreneur was that it was okay to become friendly with employees, but to maintain certain limits. It is alright to socialize, but remember that you are the owner and the boss 24 hours a day, seven days a week. It is not unlike the parent/child relationship as the child moves into early adulthood. While parent and child find their relationship can evolve more and more into one of friendship, their remains a certain boundary based on their familial relationship. Friendships with your employees need to also have these boundaries.