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6 leadership lessons for successfully working with family


Working with family and friends is a common practice for many small and medium-sized businesses, especially when a company is just starting out.

According to the U.S. Small Business Administration’s Office of Advocacy, almost 20 percent of U.S. businesses are family-owned. And many innovative companies got their start with two friends sharing a good idea.

But managing people you’re close to isn’t always smooth sailing. Problems can happen when loved ones don’t live up to your expectations, or your personal relationships interfere with the way you treat them at work.

It’s important to make sure you’re not giving family and friends preferential treatment or coming down too hard, and that you keep some separation between your home life and the office. How do you strike the right balance?

Start with these six leadership lessons:

1. Inquire before you hire

 Before hiring family and friends, consider the potential risks of working together. What would happen if you disagreed at work? What if you had to discipline or fire them?

Ask yourself, would the relationship survive conflict at work? If the answer is no, don’t do business with this family member or friend. The number of personal relationships wrecked because of business disagreements are legion. It’s not worth the risk.

2. Set expectations in writing

If, after weighing the risks and benefits, you decide to give working together a try, make certain to start on the same page. Set up and document parameters covering performance, attendance, compensation and other job essentials.

Even if it’s just a simple email between you and your family member or friend, that should do the trick, at least in the beginning – instead of a verbal agreement open to misinterpretation.

If you only say, “I’m expecting you to sell the same number of widgets as other employees,” your friend or family member might not hear the same message. But if you put it in writing, you have clear documentation.

3. Keep it separate

Carving out separate spheres for your work and personal life can be challenging. But do the best you can to keep a professional tone in the workplace. How that works will be different for each business leader.

For example, some leaders hire family members or friends, as long as they don’t have to manage them directly. Married couples who work together might take separate cars to work, eat lunch with other coworkers, and make a point not to talk about business at the dinner table.

Indeed, it makes good sense to limit discussing personal matters at work and work matters at home, whenever possible.

Frequently sharing childhood stories about your favorite nephew Joey, who’s working in sales, may give other employees the impression you favor him, breeding resentment. Conversely, if you berate him, or bring up negative or embarrassing stories from his past, you may damage his reputation with his coworkers.

And when you bring business home, you don’t get a break from work, and you potentially risk bringing work conflicts into your personal relationships.

Another word of caution: Don’t discuss work-related conflicts involving family or friends with mutual family or friends. Bringing family into the situation will cause more family tension and make the problem exponentially worse. The issue needs to stay in the workplace.

4. Discipline with compassion

Few business leaders relish the thought of disciplining employees, let alone family or friends. But it’s a necessary evil in cases of poor performance, excessive tardiness or absences, or behavior problems. If you let these problems continue unchecked, your other employees are bound to notice.

With that in mind, follow your basic approach to discipline, but add an extra layer of sensitivity with friends and family:

  • Discuss in private. You may be used to calling out your friends or family members on the spot at home, but that’s not appropriate here. Bring up your concerns one-on-one in a private setting, away from the watchful eyes of your other employees.
  • Give them the benefit of the doubt. To avoid the appearance of favoritism, business leaders may overcompensate and come down too hard on employees who are family or friends. Keep that tendency in mind when deciding how to discipline. Would you use the same approach with other employees, or would you be more lenient?
  • Break the news gently. Deliver feedback and disciplinary measures as sensitively as possible, and with the relationship in mind. Don’t mistake closeness with family or friends for being given carte blanche to be brutally honest. If your family and friends leave the meeting resentful and angry, then you will have to deal with two problems instead of one.

5. Praise with care

What if your friend or family member is doing a great job? Make sure you have a significant amount of proof that they’re accomplishing their goals before publicly acknowledging or promoting them.

It may be helpful to have another manager vet your family or friends to more accurately gauge their performance and to make and announce promotions, to avoid personal bias.

Always aim to distribute work and rewards equitably. Giving family and friends the best clients, projects and perks escalates talk of preferential treatment and sinks employee morale.

6. Be aware of family and friend dynamics

In spite of your best efforts and good intentions, the complicated dynamics between you and your family or friends will inevitably bubble to the surface, like brothers and sisters reverting to squabbling siblings at holiday get-togethers.

But this kind of behavior doesn’t fly in front of your employees.

If you find yourself on the verge of a knock-down, drag-out fight over a business issue, take a moment and ask yourself why. Are you letting personal emotions get the best of you?

Do your best to avoid a heated argument in front of your employees, meeting in private if necessary. Losing your cool is unprofessional and reflects poorly on you as a leader.

Working with family and friends can be challenging, but it can also be a rewarding experience for business leaders. What’s better than working with people you like, and who want to see you succeed (and vice versa)?

Business leaders who successfully master working with friends and family will benefit immensely from adding these loyal employees to their growing workforce. For more lessons on leadership and management, download our free e-book: The Insperity guide to leadership and management.