Excerpted from the book on mindful business management, Business Black Belt
“A friendship founded on business is better
than a business founded on friendship.”
~ John D. Rockefeller, oil magnate
By hiring someone because he or she is your friend, you can really paint yourself into a corner — here are a few ideas to consider if you are thinking of hiring one.
Ugh! I’ll just reaffirm the advice I’m sure you’ve already heard about not hiring friends.
When you realize that you have to fire your friend, that’s an ugly situation.
I hired a friend I’d known for some time. We’d gone to school together, he told great stories of the business activities he’d been involved in, had lots of great contacts, and so on.
Here’s my mistake: Because he was a friend, I thought I knew him. I didn’t really feel the need to check him out like I would anyone else.
If I’d been cultivating my relationship with the guys who I knew knew him or called the people he had worked with, surely I would have gotten a different story. He had some good ideas, but he would never act on them and make them happen himself. Apparently, he thought his presence, advice, and friendship with me were enough to get by. Unfortunately, it was. I didn’t evaluate his performance like I would anyone else because he was a friend. I thought he was a good guy and I kept him on because I thought I saw potential that would someday pay off, plus I was afraid that our other friends would think I was a jerk for firing such a smart guy. In the final analysis, he generated nothing.
Friends or not, you need people who will generate 10 times what you pay them. Whether your payroll is $5,000 or $50,000 a month, you can’t afford to have slugs working for you. Friends cannot be considered special.
Another aggravation is that my “friend” was constantly pitching me on his activities. At social events, he would invariably bring up a low-priority business project he wanted to pursue and relentlessly discuss it. It was like Chinese water torture.
After I finally fired him, I heard from several mutual acquaintances who confided that he was a great guy socially, but they never would have hired him themselves. Over the next few years, I heard from others, who knew him personally as well as professionally, who told me a few more horror stories. Yeah, I was a fool — a few phone calls to these people (who I knew knew him!) could have saved me tremendous aggravation and him a lot of embarrassment.
Why are they here?
If you must hire a friend, make sure your friend really wants to be there because of the business. You don’t want them there if they think they’re getting a free ride from you. “Oh yeah, I can get a job with Burke because he likes me; we’re friends. He’d never fire me. I can do whatever I want.” A good employee must have a passion for the business or for the work.
I’ve met few people with a passion for my business who have also become my friends. Most of my friends have a passion for what they are involved in. Because I’m passionate about what I do, I attract people who are also intense about what they do. What makes us interested in each other is that we can appreciate the passion the other has for his or her work. But we’re not necessarily in the same business. So, when friends come along who want to work for me, I seriously question their reasons. I want to hire people who have a passion for what our products and services are providing for our customers.
Hire only the smartest…
because you’ll never get all the people you want.
~ overheard Microsoft hiring credo
Unless you get rid of your incompetent people (especially friends) immediately, your other team members are going to think (and probably not say), “You are responsible for managing this situation. Do something about it.” With any other employee, it would be easier. But if the problem is your friend, it makes things worse. Other employees can’t talk to you about the problem because they know the person is your friend. You’ve created a barrier between you and the other employees who need to talk to you and to whom you should listen.
No matter what, use a contract
To add insult to injury, he sued me! I had been paying him for 9 months… He had failed to close any deals… So I let him go, finally! A year after the new VP sales had closed the deals, my “friend” sued me! Ugh!!!
But we hadn’t used a real contract to spell out our deal. How dumb was that? After all, we were friends. I don’t care who they are, they must sign a contract with you stating clearly your expectations, how much they’ll be paid and what qualifies for payment. (And when commissions stop.)
A friendship can weather a disagreement over a contract to potentially do business together, but if you disagree after there is money on the table, it’s likely the friendship will suffer irreparable damage. Understand, agree and write your contract presuming the business relationship will eventually end, but the friendship will be preserved.
Even then, draw up a detailed agreement that especially covers their job responsibilities, results (sales volume for example), and projects to complete when you do part company. How much will you pay for an incomplete project? Or, how will you handle completing it? If they are getting a commission, be sure to spell out how long after they leave your company they will qualify for sales to customers they worked with. Agreements with these specifics are necessary for any employee or contractor. (Our “Sales Rep Agreement” is one of my favorites! Take a look at our AgreementBuilder® software.)
It’s easier to end a working agreement when you can appreciate what the person contributed to the business. You can give the person glowing references because they left to do something else and not because you got frustrated and had to fire them.
It’s a small world and you may even be working in an incestuous industry. Building and nurturing healthy relationships is a must—they’ll be back in a couple of years.
Business Black Belt Notes
- Don’t get sucked into hiring friends. Choose first: your business or your social life.
- If you must hire a friend, do the same due diligence as you would anyone else.
- Make sure if hiring a friend that he or she really wants to be there and has a passion for the business, not just because they want a free ride from you.
- Before you become friends with an employee, make sure he or she is a productive, long-term contributor to the business.
- Be sure you can end your business relationship and still preserve your friendship.