V K Madhav Mohan has worked with all hues of leadership compositions—family businesses, husband-wife founding teams, and buddies-turned-entrepreneurs—in his role as a mentor and CEO coach. Mohan says he wishes he could be more optimistic, but firmly says that in his expe­rience, the prospect of friends getting into business together, and making it big is bleak. “Very, very, very, very few people manage to do this because it takes an uncommon amount of maturity to manage these roles.” He takes us through his ver­sion of the evolution of most friends-cum-business partner relationships. It starts well enough, he says. Most people get together because of the friendship, and the trust that is at the core of that friendship. There is trust in the person’s character, integrity and bonafide intent, and also trust in the person’s competence. But, in a con­tinuum relationship, what begins as an emotional connect eventually morphs into a business relationship. Almost always, Mohan asserts, this personal aspect tends to get eroded, and a hardcore, pragmatic interest takes its place, especially when the stakes become larger.

People would imagine that discord emanates from the blame games of failure, but Mohan says success can sometimes be more damag­ing to relationships. “For example, when two friends, one who brings in technical expertise, and the other who is more of a strategy and markeing persone come together, and the business takes off. But, skills don’t always remain static. Imagine if the technical guy manages to come up to speed in other areas of busi­ness, it’s very likely for the turf war to get intense. In this example, mastering technology might be a little bit more dif­ficult, so the strategy guy might be at a disadvantage suddenly. That changes the entire balance.” In most cases, these relationships become like bad marriages—alive to keep the children stable—but unhappy and unfulfilling. It’s not an ideal way to live, but a brave facade to hide the chinks is slipped on because the cost of separation is too high. Other threats lurk as well. Employees, Mohan says, can be extremely adept at playing politics, especially senior professional manag­ers. Employees know how to exploit the different personalities founders bring. If one of the partners is a visionary, and the other a process, cost-oriented per­son, they know who to pitch their ideas to and for what. The only way friends, as well as family members who are in business together, can stay safe is by communicating constantly, and doing it very honestly. “See, everybody has a silo, and everybody has a power centre. Down the line—in the sales and the exe­cution team—sometimes these silos are at loggerheads with each other, even if the big bosses pretend otherwise in public. Not enough organisations com­prehend the huge opportunity cost they suffer because the management or founding team isn’t communicating effectively with each other. This directly impacts EBITDA.”