Management Tools

By Jathan Janove Jun 1, 2005

HR Magazine, June 2005 Management Tools : Discover how to manage a friend without ruining your friendship or your business.

In a true Hollywood story, Walt Disney Co. CEO Michael D. Eisner hired longtime close friend Michael S. Ovitz to the No. 2 position at the company. According to court reports, within 60 days, Eisner’s and Ovitz’s business and personal relationships had completely unraveled.

According to Ovitz, at the time of his hire, “I loved [Eisner] like a brother. I was at the funeral of one of his parents; he was at the birth of my first son.” Yet within months, Eisner was describing Ovitz as a liar and a psychopath.

Before their working relationship began, the two friends spoke at least once a day on the telephone. At Disney, however, virtually all direct communication between them soon ceased even though they held the No. 1 and No. 2 positions in the same company.

After 14 months of what Ovitz described as commencing the “worst years of my life professionally,” the parties negotiated a severance package—at an estimated $140 million. This astronomical package led to multiyear litigation in which Disney shareholders sued its directors and officers for allegedly squandering Disney’s assets.

In working with managers around the country, I frequently hear about the difficulties of supervising a friend. What happens after a manager hires her friend, convinced that the job-fit is right? Or, when a co-worker gets promoted, meaning he now has to supervise his buddies?

If gaps surface between the employee’s performance, attendance or conduct and the boss’s expectations, awkwardness and tension set in. The boss may be tempted to look the other way, but eventually the problem can no longer be avoided. By that time, pent-up frustration and anxiety lead to lose/lose outcomes in both the employment and personal relationships.

Does this mean you should never hire a friend? Or, if you get promoted to a position of supervising a friend, you should either end the friendship or get your friend transferred?

The answer to these questions is “no.” Your friend may be the best-qualified or most-appropriate candidate for the position. Simultaneously successful workplace relationships and personal friendships can be maintained. There is something to be said for the trust, loyalty and commitment to mutual success that a friendship can engender.

Friendly Business

Not all workplace friendships end up like the Eisner/Ovitz train wreck. Despite his reputation as a ruthless businessman, John D. Rockefeller maintained many enduring friendships with subordinates, including former enemies such as his successor as president of Standard Oil—a man who once presided at a protest rally in which Rockefeller was burned in effigy. He once said, “A friendship founded upon business is superior to a business founded upon friendship.”

So what needs to be done to enjoy the benefits and avoid the pitfalls of a supervisor/employee relationship that includes a personal friendship? Consider the following:

  • Disable the “stupid switch” when it comes to hiring friends. People who are good at getting jobs aren’t necessarily good at doing them. They may have patented techniques for establishing rapport during a job interview, designed to lead the interviewer to flip on, as Lou Adler calls it, the “stupid switch,” in which the interviewer “feels so good” about the candidate that he or she jumps to the conclusion that the candidate is right for the job.

    When considering a friend as a job candidate, remember that trust and positive feelings already exist—the very things the good candidate/bad performer strives to create. Thus, you may be overly quick to conclude that your friend is right for the job. As Rockefeller preached and Eisner painfully learned, a good friendship does not necessarily make a good business relationship.

    Be sure to scrutinize your friend’s suitability for the requirements of the job in question. Does she possess the necessary skills? Does she have a demonstrated track record in prior employment that helps you predict her success? Are you confident she will meet objective expectations regarding performance, attendance and workplace conduct? If so, why?

  • Avoid the appearance of impropriety. In the world of legal ethics, this phrase means taking precautionary steps to prevent others from believing, even erroneously, that your motives are impure. When managing a friend, you should hold him to the same expectations and treat him the same as other employees in terms and conditions of employment.

    However, even if you are doing this, other employees may have a different impression. Certain aspects of the friendship may need to be modified if they point too sharply to the difference between the friend and co-workers in relationship to the boss. Examples might include taking joint family vacations, partying or sharing season sport tickets with your employee/friend. They may also include occurrences at work or at work-related events, such as taking frequent lunches together, hanging out at company picnics or retreats, or other actions that may create the impression of favoritism.

    This doesn’t mean you have to shed the friendship altogether. It means periodically you should put yourself in your employees’ shoes and ask yourself, “Would this make me feel uncomfortable or cause me to worry about favoritism?”

  • That was then; this is now. This message, borrowed from the title of an S.E. Hinton book, often needs to be given by a newly promoted supervisor to now-subordinates with whom the supervisor is friends. The point is to mark the transition and separate a relationship of equals as friends from the different type of relationship between supervisor and employee.

    The supervisor must now set expectations and ensure that employees meet them. A message along the following lines may be helpful: “Sally, we’ve been friends a long time, and our friendship is very important to me. As your supervisor, however, it’s my responsibility to make sure that you and the other employees are meeting expectations so that we can achieve our department goals and I can meet my boss’s expectations. When it comes to the workplace, I intend to treat you the same as everyone else so there are no double standards and no one even thinks there’s a double standard. Are you OK with this?”

    If this type of message wasn’t given when you became boss, and you have concerns about supervising a friend, sit down with him at the first opportunity and give this message, including an explanation of why it is important not only for creating an effective work relationship but also for maintaining a healthy friendship.

  • Periodically look in the mirror. Although you may have gotten your ducks in a row in establishing a good working relationship with a friend, over time, a real or perceived double standard may set in. Engage in some self-scrutiny from time to time concerning whether you’ve managed to maintain the appropriate balance.

    Approaching your other employees with a “permission to speak freely” message can be useful. An example of this approach: “Bill, as you probably know, Jim and I have been friends for many years. He reports to me just like you do, and I want to make sure that when it comes to the workplace, I’m treating everybody the same, including Jim. I want you to be candid with me about any concerns or issues you might have, including whether there’s anything I should be doing differently. Please help me to know if there is something I may be missing.”

    It’s possible you may not get completely candid feedback even with such an approach. Nevertheless, the fact that you took the trouble to ask will count for a lot. In addition to approaching your employees directly, you may want to involve HR or a fellow supervisor to serve as a sounding board or a second set of eyes or ears. If the business/personal balance gets out of alignment, you will want to make the adjustment quickly and effectively.

  • When problems arise, don’t procrastinate. Especially when your employee is also a friend, you may tend to rationalize a problem in performance, attendance or conduct. You may think to yourself, “This problem is temporary; it will go away by itself.” Or, “He’s going through a rough patch at home and needs some time and space to get his personal house in order—then he’ll get his act together.” Or, “If I come down too hard, it may hurt our friendship since she’ll feel that I think I’m superior.”

    When you give in to such rationalizations, the problem invariably gets worse and you may pass the point when it could be fixed successfully. When you finally do confront the problem because you no longer have a choice, your friend may respond with defensiveness, anger or refusal to accept responsibility. The result is that both the workplace relationship and the personal relationship spiral downward.

  • Instead of avoiding the problem, “D-I-S” it. To D-I-S a problem means to approach it in a way that is “direct,” such as by using face-to-face communication; “immediate,” dealing with an issue at the first opportunity; and “specific,” avoiding generalities and precisely defining the gap between expectations and reality.

    Oscar Wilde once said: “A true friend stabs you in the front.” Although this is not the kindest and gentlest of analogies, the point is to be up front with your friend if you want to solve a workplace problem and preserve a friendship. The more apt you are to D-I-S the problem, the more likely you are to fix it while it can be fixed—and while your friendship can remain intact.

  • If your friend needs to go, deal with it like a pro. If, despite your efforts to help and to give your friend the opportunity to close the expectations gap, it becomes evident that she is not right for the job, accept the reality that she needs to go—and that you own the decision.

    Communicate it directly and promptly. Avoid Eisner’s mistake. According to reports, the fact that Ovitz was not suited for the No. 2 job at Disney was almost immediately apparent. Yet Eisner delayed nearly 14 months before making the change. Even then, he avoided communicating the message directly and delegated it to a subordinate, Disney’s in-house attorney. Ovitz testified that the attorney visited his office for the first time and told him that Eisner wanted him out of the company. Ovitz testified: “You could have hit me over the head with a two-by-four.” Ovitz then responded angrily to the attorney, “If Mr. Eisner wants to terminate my services, he should say it to my face.” Ovitz then told the lawyer to “get out of my office!”

    If you know your friend is not right for the job, you owe it to yourself, the company and your friend to avoid putting off recognizing this reality and explain face to face what you are doing and why. For example: “Mary, this pains me to say, but I’ve concluded that I am not getting what I need from your position. We’ve tried to close the gap but haven’t been successful. Unfortunately, as a result, I need to let you go. But I want to do it in as professional and respectful a way as I can. I know this decision will be painful for you and your family. However, I believe you can and will make a successful transition to other employment and find a better fit. Our friendship is still very important to me, and I very much hope it survives this change.”

​This approach to termination may not save your friendship. However, it gives it a decent chance. Moreover, it will help ensure that the termination is handled without the kind of animosity as in the Disney story—much less a nine-figure severance package and multiyear litigation.

Friends with Benefits

From before John D. Rockefeller to after Michael D. Eisner, workplace friendships between supervisors and subordinates have abounded. Sometimes they work out successfully, as in Rockefeller’s case. Sometimes they don’t, as in the Eisner/Ovitz fiasco.

Whether you’re a CEO or a line supervisor, follow Rockefeller’s example. When at work, keep the friendship founded on business, not vice versa. In this way, you should be able to enjoy the benefits of having both a good worker and a good friend.

Jathan Janove is a partner in Janove Baar Associates LC in Salt Lake City. He is an employment law attorney who spends much of his professional time training and coaching managers on dealing with workplace challenges.

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