- View our entire Business Blog archive.
Friendship can be a Sinking Ship
Friendship can be a Sinking Ship
So here we are, smack in the middle of at the very least an economic downturn, and you as a business owner may be facing all kinds of difficult decisions. All of that would be difficult enough, but if you are anything remotely like me, at least some of your employees are your friends. As with all friendships, that means personal loyalty and in a difficult business environment, that means making sometimes horrible decisions. Even worse, because it means just that, human nature is to procrastinate making the hard call and that can lead to disaster.
Many years ago I had a friend working for me as a salesman. He was and is a great guy and married to a wonderful lady. They were both friends of my then wife and I. The problem was that he was a lousy salesman. Our company at the time generated sales leads through public dinner seminars. The approximate cost per lead, and remember that this was 1990-ish, was about $20. That was fine with me as they were “hot” leads and usually resulted in a profitable sale for most of the salesmen, but my friend just was not selling. To make matters worse, I provided a guaranteed salary as a base so not only were the leads expensive, but he was a huge expense just sitting there. Basically I was paying him to read the Wall Street Journal.
Eventually I had to let him go. It was an awful and agonizing decision and though I would love to tell you that it had a happy ending, it did not. Our friendship was ruined as no one takes firing well no matter how you couch it. And when I went into his desk after he left, I found over 200 leads uncalled and now very, very cold.
But as an entrepreneur you have to make tough calls. In this example, I was out $4000 in leads, another $40,000 in salary, and if those leads would have panned out as did the others we gave to more competent help, about $250,000 in lost revenue. Such was the cost of friendship.
Now, I am not going to lecture you about not making friends with employees. That is impossible for the empathetic and my employees are all friends of mine to this day. But, if one of them was causing a financial hardship on the company, as recently happened, I would fire them without hesitation. Yes, this is hard, but do I want to risk potentially hurting the health of the company, or worse, closing down and costing all of our jobs, over misplaced loyalty?
You already know the answer to the question, and there is no way out but the hard way. The only consolation that I can offer is that the hard decision and the right decision are almost always the same thing.
Posted by Herb Kay on Thursday, September 11, 2008
Post Your Comments
If you would like to post comments to this blog entry, please login or register for free.