"Keep your friends close, and your enemies closer." What do you think of this mentality? Does it work?

In the business world, this is not a mentality it's a strategy.  Keep your friends (your organization) close to your objectives, and your enemies (your competition) in even closer observation.  

For a business to protect its reputation, image, and maintain a favorable public perception, it must always be aware of the competition and the effect that it has on your organization.  

This strategy of self-preservation and autonomy can be applied to many other relationships in life.