•  Good interactions are key to success in startups. •  Set your company's decision making style. •  "The ends justify the means" is a recipe for disaster.

Good companies are built on good people. It's so simple that it sounds almost simpleminded. But finding, keeping and working with good people are some of the most complex challenges any executive faces.

"One of most important things about any business is working with people you like," says Sheldon Laube. "The grand mission isn't what sustains you. What gets me up everyday is people I work with, not the grand mission. Part of the reason I love going to work is that I get to see these people and interact with them."

Laube is an expert at building companies by finding good people. He was a cofounder of US Web in 1995. Before that he had been chief technology officer at Novell, and director of information and technology for Price Waterhouse. Most recently he has launched Centerbeam, Inc., a Silicon Valley-based outsourcer of computer services for small business. He is CEO and chairman.

Laube knows from experience that startups are crucibles for relationships, with their endless workdays and intense pressure. "You need to create a culture and environment that includes people you actually like being with. That's true for the board of directors, and for the people you work with every day. You will spend an amazing amount of time with them, so it's important that you like them."

But equally important, just getting your friends together doesn't create a successful business. "It's just as important to not limit yourself to people you know," says Laube. "You don't want to limit the team pool. Half of the top people in the companies I've started have come from referrals."

How does he know when he's found the right person? They have to have the ability, he says, but they need something more: "I don't care how talented they are, if they can't create the right social interaction, then they don't belong. As a team builder and leader you can't compromise that."

Relationships Carry More Messages than Memos

The team is built on relationships, but by relationship building Laube doesn't mean becoming best buddies: "It's not about being social friends or going out together. It's about considering them colleagues and people who inspire you. There always has to be an underlying respect and a liking for each other."

Relationships are important because they determine the success of the venture from top to bottom, he says. "How the people on top get along with each other sends more messages to the staff than all the memos you write. It's just like a family -- the kids can tell whether the parents are getting along or not."

So what happens when the parents fight? "I don't agree with everything the staff says every day, but we can have discussions and different points of view, and that sets the tone for the entire company. If the company senses that the people at the top aren't getting along they lose confidence. So it's really important to be able to have those interactions."

Set the Decision Making Style

There's no magic about conflict resolution, he says. Every organization has its own style for dealing with conflict. Intel, he says, was famous for having a very confrontational style.

"The atmosphere at Centerbeam was at least somewhat more collegial. But what's most important is the ability to come to clear decisions quickly no matter what style you choose. You might have a collaborative style and be a consensus builder, or you might take input from everybody and make the decision yourself. But people have to know your style. The organization has to be able to come to a decision. I've been in businesses where the leader couldn't come to a decision. In other companies no decision could be made without everybody involved and wringing their hands for hours."

You've got to be clear about the company's decision-making style, says Laube, because it's unclear decision making processes that get in the way of relationships. "It doesn't matter what the style is. The problems come if you think you're in a consensus process and I think the decision is mine to make."

Maintaining the Fabric of Relationships

How do you convey hard news? Honestly, says Laube, because it's the only way to preserve the company's sense of its values. If someone's performance is a problem you tell him, within the context of your relationship. "You have tell him that he needs to change and you're there to work with him," says Laube. "If they aren't willing to change, that's difficult, but if you can say, "Hey, you've got a problem but I value you and I'll work with you," then you are working on the relationship."

The key is to remember that your company depends on the fabric of relationships within it, and you can't allow anything to destroy that fabric, says Laube -- even though sometimes fixing it may hurt in the short term.

"I've seen lots of companies put up with high performers who are rotten people for far too long, and I think that's wrong -- the supersalesman who's a jerk, the manager who's a bully. It's the greatest example of 'the end justifies the means,' and it's horrible. It ultimately has a horrible effect on the company's values and the fabric of relationships."

Another thing to remember, says Laube, is that nobody's perfect, even you. "I've been in meetings where I went off the deep end, where I was more emotional than was appropriate, for example. It's important to go back and repair that bridge."