Friends
It's Personal—The Real Source of Business Success
Organizational relationships determine organizational viability.
Posted November 25, 2024 Reviewed by Michelle Quirk
Key points
- Successful leaders are more likely to embrace the mantra "It's not business, it's personal."
- Having a best friend at work significantly increases employee retention and engagement.
- Organizations that successfully develop friendships among colleagues substantially outperform competitors.
Co-authored by Laura Martin
“It’s not personal. It’s business.” hits the BS trifecta: cliché, false, and ironic.
It’s cliché because it is used when people in power want a way off the hook for making heartless decisions.
It’s false because people prioritize personal and relational outcomes over business outcomes all the time, whether because people value long-term relationships over short-term metrics or because they are playing organizational politics. Regardless, the suggestion that business outcomes always take precedence over personal ones is absurd.
It’s ironic because the exact opposite is true. Businesses thrive when people take them personally and die when they don’t. That’s not wishful thinking. That’s data.
To succeed, leaders need a new mantra. It’s not business. It’s personal.
Friendtention
The first data point supporting the importance of work friends is its impact on employee retention. The costs of employee churn are well understood (up to 200 percent of salary), and companies know that improving employee retention offers transformational financial impacts.
But despite the potential and importance of reducing churn, the vast majority of employee retention efforts fail. Why? Because those efforts ignore intrinsic motivation.
Motivational science identifies two types into which all motivators fall: extrinsic and intrinsic.
Extrinsic motivators exist outside of us. Most work incentives are extrinsic, including positive things like comp, titles, and perks, as well as negative things like pay cuts, demotions, and job loss.
Extrinsic motivators can be very powerful, but they will never be as powerful as “intrinsic” motivators, which exist inside of us. If extrinsic motivation is represented by the statement, “I’m doing this because I have to,” then intrinsic motivation is represented by the statement, “I’m doing this because I want to.”
When organizations try to affect things like employee churn, they most often do so through extrinsic motivators. They try to provide people with more reasons to stay, like salary raises, promotions, or status symbols.
They focus on these things because they are controllable. But, unfortunately, we also know they don’t work.
What does solve employee churn? Having a best friend at work. Recent research from SHRM has revalidated what we have all known for a long time. When people have good friends at work, they are much less likely to leave. Cereal bars, bean bag chairs, and new titles? Not so much.
Friendgagement
A cynic might suggest that friends in the office lower productivity. The opposite is true.
Employee engagement describes the measure of individual commitment to organizational success. It is predictive of discretionary effort. Highly engaged employees lead to substantial increases in profitability, productivity, customer satisfaction, innovation, safety, and…wait for it…employee retention.
This may explain why organizations have spent more than 1 gazillion dollars on employee engagement initiatives. So where has that money gone?
Leadership training. Managers are responsible for 70 percent of the variance in employee engagement, so organizations have understandably placed their focus there.
But that is a solution that ignores the problem. Most leaders aren’t failing to engage their teams due to a lack of ability or will. They are failing to engage their teams due to a lack of time and priority. (They get promoted by hitting metrics—not by getting the most out of their teams.)
No matter how well we train our leaders, if they are working 12-hour days just to keep up with their to-do lists, they won’t be able to invest the time necessary to drive team engagement.
This is why, absent a fundamental shift in the ways we select and compensate our leaders, our best bet for driving engagement may lie in focusing on some of its other drivers. So, what are they?
There are many validated tools that measure engagement. One of the more well-known is the Gallup Q12, which identifies the 12 biggest contributors.
Number 10? “I have a best friend at work.”
Friendship at work contributes to engagement, not just retention. Now might be a good time to start humming the theme song to Friends.
Friendablement
If nurturing friendships among colleagues is the best solution to the employee engagement crisis, the best way to do that is to put people in situations and environments conducive to it—not to hope it happens organically. For any new initiative or intention to be viable, it must begin with organizational culture.
Organizational culture, as defined by Deal and Kennedy, is “The way things get done around here.” It has an enormous impact on every facet of organizational life. Much more is conveyed through organizational norms and behaviors than through words.
The availability heuristic, as defined by Kahneman and Tversky, describes the disproportionate influence of whatever is top of mind. If organizations want friendships to blossom between colleagues (or for anything to stick for that matter), the first thing they must do is talk about it, consistently.
But that merely sets the stage. People need to be brought together into situations in which bonds are formed. Team challenges, volunteering, and social outings are practical examples of how companies can nurture friendships between colleagues.
But there is one crucial rule. Work cannot be discussed during these outings. That defeats the entire purpose. (When someone brings up work, have a fun punishment waiting.)
Moving Friendward
The importance of workplace friendships is gaining attention because the effect has grown even more important, and more challenging, in the era of hybrid work, increasing the need for intentionality.
The first 5 minutes of every virtual meeting should be “no business talk allowed” to ensure people have a chance to connect on a human level first; personalizing and having fun with Zoom backgrounds can bring people together; virtual social gatherings around shared interests can create lasting friendships.
Consider why local bars thrive. Bartenders are great at helping their customers become friends with each other, creating status and a community to which people will continuously return because they like how they feel when they are there. For best results, make work feel the same. (Cue the theme song from Cheers.)
Laura Martin is the co-founder and CEO of The Glinda Group, LLC, helping organizations thrive through the application of social science. Laura has previously been a senior leader at Target, ADP, Razr, and BMS.
References
Reducing Employee Turnover With Creative Workplace Solutions. SHRM. February 22, 2019.
Katie Navarra. Workplace Romances Can Be Tricky, but Friendships Boost Retention. SHRM. February 7, 2023.
Andrea Hsu. America, we have a problem. People aren't feeling engaged with their work. NPR. January 25, 2023.