How to manage employees that are friends

That dreaded moment as a growing business owner when you need to have a real serious “chat” with one of your employees. Not just any employee… a friend or family member

The scenario: you’re a business owner and you need something (or someone) to change - and you need it fast. Things look a little different now than when you first started. 

You want to hold people accountable and perhaps even crack the whip a little. But how is that possible when you are looking at the face of a Day 1 employee, who stuck it out during those beginner 15 hour days of pure chaos, got cuts on their hands from helping ship out those rush orders in your first year, the friends and family you have grown up with who you now employ?

What will happen when you try to change the management vibe? How will your sister react - the one whose first job ever was here, your uncle who had a job but was laid off and now helps around your office, your buddy from baseball at the park on Tuesday’s… you get the picture. 

When emotional ties are involved - it’s just not that easy. Many advisors will say “just avoid this issue entirely, don’t hire them from the start” - that’s not really hitting the mark either, and certainly not helpful advice after you find yourself in this situation. When you start up, hiring people who you trust with your business is imperative. In fact, getting into business with someone you don’t trust is a much bigger issue. 




Every bit of profit should be kept from your hard-earned sales.


But know this - if this is a problem you face, you’re not alone. 

As a business owner, it is highly likely you will find yourself in this situation at some point in your journey. You had support with friends and family who helped get your idea off the ground, but now the business is growing so quickly that you have moved into a stage where you need a specialized and skillful workforce. Your existing employees are trying their hardest, but trying is not exactly cutting it anymore. You aren't in the zone of "OK, I'll try my best", you need “OK, Already done, what’s next?”. This requires subject matter experts who can prove results - and you need them fast.

There is a way out of this - so take a deep breath. It won’t be a bloodbath either - the solution will leave both you and your friend/family employees unscathed and better off. 

As the owner facing this dilemma, what do you do?

It is time to step slightly away from day-to-day operations, my friend. 


One major difference between start-up and established business is the owners involvement in day-to-day. In order to grow, you need a layer between you and your workforce. Consider this image to the right - you are no longer directly necessary to hold up the egg. The better position for you is at the top of the egg, guiding and leading your vision forward, with your skilled workforce helping you get there. 

Here are the steps you can take:

  • Hire / recruit a finance and operations expert to take over the tasks of managing the team. In larger companies this role is known as an Operations Manager or Director - or at the highest level, Chief Operations Officer (COO). The semantics of the title is not important in your business - just that the function exists. 
    • As owner, you will still be in control of all of the activities that go on to run the business, but you won’t be as involved - and you won’t need to if you hire the right person for this role.
  • Make an announcement to the entire staff that this new layer exists and is occupied by whoever you chose, and explain that this finance and operations expert will be running the daily operations
    • Any questions from employees on how to do something? If they can take off early? On what to do for the day? Gently remind them to go to the finance and operations expert you hired - they will tell the employees the info they need (that they used to ask you about all of the time)
    • Lastly - and most importantly - let the expert do their thing. You will always have a say at the end of the day, but managing highly skilled people is a whole different ballgame than your original employees. Micro-managing won’t work here - you’ll hinder the expert’s ability to do their best, and frustrate the process. Make sure you both are a united front, and discuss concerns privately with the expert. Think of it as you explaining the vision once to the expert, and the expert executes from there.

So, if thats what you do, what does your finance and operations expert do? (aka Operations Director, COO, etc)

  • They will assess your organizations goals and where you want to be, understand the necessary requirements, and match the staff accordingly, based on their strengths
    • It can be easier - and oftentimes better - for an outsider to do this analysis. As their friend, family, and boss since forever, you have emotional ties that may bias your matching skills. Don’t be offended that your input may not be 100% used, especially if its emotional (if your justification sounds like this: "They aren't that skilled but, I really LIKE them" - its emotional.) Although this is what made your employees love working for you in the first place - it just won't help when trying to fit people into roles they are best fit for. 
  • They will set quantifiable performance metrics to measure the output of this new workforce and their roles / responsibilities - these metrics are explained to the employees, and shown ahead of time. This practice will make the environment results-oriented and not emotional
    • Any employee who is underperforming and consistently coming in under the standard will be addressed by the finance and operations expert. Typically first a discussion on what happened will be held and how to correct them, and then typically performance plans are implemented. This part can be a little awkward, since its a new kind of management - but guess what! This is the awkward part you were avoiding - and look how easy it was to hand it off to someone else!


It is not uncommon to have a bit of disarray at the beginning of these changes. Change is hard for everyone, especially when not everyone shares the same vision. You might have employees approaching the owner to either seek advice about dealing with these new changes, or worse -  complain about the changes. Here is how to handle that:


  • Do listen, and let them vent it out. Sometimes its just cathartic to get it off your chest
  • Do respond in a positive way, while reaffirming the expert is still responsible at the end of the day and you won't be overriding them. Encourage them to talk to the person you designated about any disagreements or concerns. Offer to talk as a group (rather than relaying messages and becoming a middle man). Rememeber, you didn’t want to deal with these emotional worries, so encouraging employees to take up matters with the “middle man” is the ultimate goal 


  • Don’t affirm anything negative - encouraging it will be a disaster for the morale around the office. Stay positive and explain that these are all in support of your vision for a bigger, better company
  • Don’t worry or take the shifts in emotions to heart. It is tough seeing people you care about get rocked a little, of course. But in the long run, it is this transitional period that will help get you and your team to the next stage of a professional business that runs like a machine

Not sure if this will work, or have additional questions on getting the ball rolling? Part of our services is to act as the layer between owner and employees to set structure and employ smooth functioning teams. We would love to help.

Fill out the form below, or call us directly: 833-346-6677 (833-FINNOPS).

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