Should You Mix Business and Friendship?

LinkedIn – In 2007, Brian Spaly and Andy Dunn launched Bonobos, originally an e-commerce company selling great-fitting men’s pants. They were roommates, best friends, fellow Chicagoans and – it seemed – complementary business partners. Bonobos wasn’t an obvious idea, but in their hands, it was one that succeeded.

I had the good fortune of getting to know them while they were students of mine at Stanford Business School. They were, and still are, phenomenal entrepreneurs and wonderful human beings with an abundance of what I call brains and heart – a winning combination. Also working in their favor is that they each brought unique value to their partnership. But they almost lost their friendship over going into business together.

Their experience spurred me to think about the different ways friendship and business intersect. If you’re considering going into business with a friend, it’s important to know that the duties of doing a good job must trump your duties to each other as friends. It may sound harsh to put business ahead of friendship – and in fact, the tensions that arise between personal relationships and business demands is worthy of an entire post. But once you’re in business together, you’ve taken on obligations to suppliers, customers, distributors and above all else, other employees, that you can’t subordinate to the friendship.

Hence, you need to make the decision to establish this type of relationship cautiously and with your eyes wide open. Enlightened partners can navigate it in a gracious way and with a spirit that allows the friendship eventually to recover. Brian Spaly and Andy Dunn are proof of this; they took the long view and realized that their good reasons for joining together as partners were even better reasons for going their own ways. Dunn is now CEO of Bonobos and Spaly is CEO of Trunk Club.

But in the majority of cases, friendships actually don’t survive business associations. So before you link up with a friend, be sure to prepare for that eventuality and decide whether you can handle the loss of the friendship. Accepting that it’s a possibility may help you figure out how to prevent it from happening.

Here are a few other suggestions on how to make conflicts between business demands and friendships a little more manageable:

1) Opposites don’t always attract, but in business they should. We generally choose our friends because they’re a lot like us. But when picking teammates, partners or those with whom we’ll be working, we need people whose strengths cover our weaknesses, whose interests lead to a different approach to problem-solving – in other words, people who are unlike us. So before you formalize your business relationship, make sure it’s a good match.

2) Before signing on the dotted line, talk it out. You’ll want to consider, and talk about, the following questions: Will we continue to socialize? How will we handle on-the-job interactions? How do we divide responsibilities so we’re not in direct conflict professionally? When we disagree, what are the mechanisms for resolution?

You’ll also need to agree on priorities around time, money and energy, as well as commit to communicating openly and subordinating your egos (by listening and supporting the imperfect qualities in each other). And in order to attract great team members, you’ll need to establish how much professional distance to maintain between yourselves in the workplace and consider how your relationship will be perceived by other teammates and potential hires.

This discussion might involve agreeing on how to split duties, pledging to support the decisions of the other or a making pact never to call in “friendship chits.” It’s likely to provide valuable information on your friend’s communication skills and could even raise important red flags.

3) Troubleshoot before trouble arises. Once you’ve partnered up, but before any issues arise, examine the potential for conflict more formally and establish the rules of resolution or separation. Answer questions such as this: If we end up in an unresolved conflict, how will we determine the terms of departure if one of us moves on? Sometimes it’s helpful to use a coach – or even a trusted lawyer – to facilitate an open discussion. However you do it, be sure to set aside ample time and make it the sole topic of discussion.

From there, dedicating a regular time to assess how things are going may be helpful – though my preference is a mutual commitment to in-the-moment feedback, which allows for instantaneous course corrections to keep the partnership from ever getting into trouble.

Success in a business partnership depends on shared values. And while working with friends adds a layer of difficulty, if both parties are in sync and are committed to some version of the above, it can also be an exceptionally satisfying way of building a business.

By Joel Peterson