Relationship Economics: Transform Your Most Valuable Business Contacts Into Personal and Professional Success [3 ed.] 1119855896, 9781119855897

Citation preview

RELATIONSHIP ECONOMICS

RELATIONSHIP ³ ECONOMICS rd

EDITION

Transform Your Most Valuable Business Contacts into Personal and Professional Success

DAVID NOUR

Bestselling Author of Co-Create and Curve Benders

Illustrations by Lin Wilson

Copyright © 2023 by David Nour. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Revised and Updated edition published by John Wiley & Sons, Inc., Hoboken, New Jersey, 2011. Published simultaneously in Canada. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-­copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-­8400, fax (978) 646-­8600, or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-­6011, fax (201) 748-­6008, or online at http://www.wiley.com/go/permissions. Trademarks: Wiley and the Wiley logo are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries and may not be used without written permission. All other trademarks are the property of their respective owners. John Wiley & Sons, Inc. is not associated with any product or vendor mentioned in this book. Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Further, readers should be aware that websites listed in this work may have changed or disappeared between when this work was written and when it is read. Neither the publisher nor authors shall be liable for any loss of Profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762-­2974, outside the United States at (317) 572-­3993 or fax (317) 572-­4002. If you believe you’ve found a mistake in this book, please bring it to our attention by emailing our reader support team at [email protected] with the subject line “Possible Book Errata Submission.” Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic formats. For more information about Wiley products, visit our web site at www .wiley.com. Library of Congress Cataloging-­in-­Publication Data: Names: Nour, David, 1968- author. | John Wiley & Sons, publisher. Title: Relationship economics : transform your most valuable business contacts into personal and professional success / David Nour. Description: Third edition. | Hoboken, New Jersey : Wiley, [2023] | Includes index. Identifiers: LCCN 2022046785 (print) | LCCN 2022046786 (ebook) | ISBN 9781119855897 (hardback) | ISBN 9781119855910 (adobe pdf) | ISBN 9781119855903 (epub) Subjects: LCSH: Social networks–Economic aspects. | Social capital (Sociology)–Economic aspects. | Business networks. Classification: LCC HM741 .N68 2023 (print) | LCC HM741 (ebook) | DDC 650.1/3–dc23/eng/20220928 LC record available at https://lccn.loc.gov/2022046785 LC ebook record available at https://lccn.loc.gov/2022046786 Cover Design and Images: Lin Wilson

  To Wendy, Grayson, and Justus. Thank you for your love and support of my work. To Mom who sadly passed away in Istanbul, Turkey on Thanksgiving morning in 2021 from viral pneumonia due to Covid-19. She was an amazing relationship builder, collector of great stories, and spent her entire life caring for others.

Contents Acknowledgments ix

Introduction: Welcome to the Age of Hybrid Relationships

1

Chapter 1

Networking = NOTworking

21

Chapter 2

Growth and Business Relationships

51

Chapter 3

Six Phases of Strategic Relationships

79

Chapter 4

Strategic Relationship Planning in Your Organization

Chapter 5

117

Reputation Capital and Professional Net Worth

155

Chapter 6

The Role of AI in Strategic Relationships

187

Chapter 7

Relationship Economics, Co-­Create, and Curve Benders

213

About the Author 247 Other Books by David Nour 249 Index 253

vii

Acknowledgments

A

book is always a journey, one that you seldom take alone.

I’m grateful to long-­time friend Shannon Vargo at John Wiley & Sons for her grace and patience as I struggled with Mom’s passing, hectic work demands, and some personal time away to get this book written. Huge thanks to Shannon for investing in me and my ideas over the years and, more recently, Sally Baker for marshaling this work through the publishing process. The incomparable Lin Wilson, who designed both the cover of this third edition and all the illustrations in this book, has been working with me since 2015. In our strategy visualization and agile alignment work, he consistently demonstrates incredible talent, patience, and resolve to help global leaders visually clarify, communicate, and cascade their ideas. I’m proud to call him a colleague, a friend, and a 2 AMer! Elaine Devine, our director of operations, is world-­class in her organizational skills and diligent stewardship of every facet of our business. Jenn Cordz, my business partner who runs our RevOps practice and leads our Learning Expeditions, is brilliant in her work and great fun to be around. This book and all my advisory, speaking, and coaching work wouldn’t be possible without an incredible group of global clients. I’m indebted for their trust, vote of confidence in our work together, and friendship. I admire their steadfast leadership in the post-­pandemic world and how they build incredible relationships within, and external to, their organizations and model the right brand and cultural norms daily. I’m grateful for their willingness to listen, push back healthily and respectfully, internalize our discussions, and explore ideas to create enterprise value. You are the constant source of my learning, growth, and aspirations. Thank you.

ix

x

Acknowledgments

I would be remiss if I didn’t mention Mom and Dad back in Iran. As you read in the dedication, Mom, unfortunately, passed away on Thanksgiving Day 2021 from complications caused by COVID-­19 during our visit to Istanbul, Turkey. She was an amazing source of strength, resolve, and love for God, family, and friends. So much of what I share about relationships, I learned by observing her willingness to help complete strangers, embrace anyone in need, and work relentlessly to ensure our family’s safety, security, and happiness. Dad and I miss her every day. I’m grateful to Tug for his tireless help during that tough month abroad. Let me close with one of my favorite quotes: Do justice, love kindness, walk humbly—­sometimes they come together in a single encounter. The late Thurgood Marshall, Supreme Court Justice, who was one of the young lawyers and argued the Brown v. Board of Education case, which ended the injustice of legal school segregation, once said, People are people Strike them, and they will cry out; Cut them, and they will bleed; Starve them, and they wither away and die. But treat them with respect and decency, Give them equal access to the levers of power, Attend to their aspirations and grievances, And they will flourish and grow and . . . Join together to form a more perfect union. Here is to all of us doing our part—­in work and life—­to form a more perfect union. —­Nour

Introduction: Welcome to the Age of Hybrid Relationships When I began my advisory practice back in 2002, in search of a viable market-­fit opportunity, I went on a listening tour, asking 30+ business relationships a single question: “What do you believe I do exceptionally well?” From Paul Young, a wealth manager at UBS whom I had known through a men’s prayer group, to Dale Jones, who during the 1996 Olympics had a business next door to my office and later became vice-­chair and partner in charge of the CEO and board practice at Heidrick & Struggles, the response was, “You network better than anyone else we’ve ever met; if you can teach others how to do that, you’ll succeed!” “Networking? As in meeting and engaging others?” I thought, “Isn’t that taught in undergrad or grad schools as part of understanding how the world works? How about every company’s new hire training program to set up employees for success out of the gate, management training to help them transition from an individual contributor to managing a team, or leadership development programs to get anything done as a leader?” Sadly, I found very little evidence to support my assumptions. I knew most business professionals could benefit from networking, but how could I package it as a repeatable, predictable process focusing on one’s desired outcomes? Two events led me to many insights you’ll read in this book. 1. I gathered a handful of business relationships around a table in my home and asked for their help in subconsciously capturing what I had done for years. If I was going to teach others how to network with more consistent and remarkable

1

2

Relationship Economics

outcomes, I needed a process and a set of practices that could be taught. 2. I reached out to Alumni Relations at Goizueta Business School at Emory University. They had the website/shopping cart and the facilities, and I offered to put on a half-­day class—­any revenues, we’d split 50/50. They agreed, and I emailed roughly 100 contacts. Business relationships from Sony, Chick-­ fil-­ A, Goldman Sachs, KPMG, and several other marquee companies showed up! I couldn’t believe these friends from highly respected organizations hadn’t been exposed to these ideas in formal learning and development opportunities in their illustrious careers. Shortly after these two incidents, I began proactively sharing my ideas in article submissions, videos, speaking engagements, training sessions, and early advisory work. As a result, I have become a crusader for the view that business relationships should be more intentional, strategic, and quantifiable. Several crises later, such as the Internet bubble burst of the early 2000s, the housing crisis and subsequent great recession of 2008, and the pandemic, have proven ideas such as Relationship Economics®, Relationship Currency™, Reputation Capital™, and one’s Professional Net Worth™ to be timeless and relevant. In my advisory and coaching work, I observe business professionals engaging in bizarre relationship-­ centric (or lack thereof) behaviors. Regrettably, there is much misinformation, and everyone suddenly seems to be a relationship expert. For example, search for “Business Relationship Expert” and get 686  million references! Unfortunately, most you’ve never heard of, and you’re likely to be highly disappointed by hacks sharing clickbait or lousy advice, overcomplicated tools/tech, or obvious “motherhood and apple pie” guidance with little value. Let’s start with several foundational, if not philosophical, wrong ideas about business relationships.

Introduction: Welcome to the Age of Hybrid Relationships

3

Business Relationship Myths and Misperceptions Over the years, I’ve heard ridiculous excuses by people to deflect responsibility, accountability, or otherwise simply doing their jobs, based on business relationship myths and misperceptions: 1. “Relationships are just a soft skill”—­Today, building business relationships is still seen, spoken of, and considered a soft skill. For instance, a recent article in Business Insider lists the ability to form relationships as one of the top  20 soft skills that business leaders need for success.1 But relationships are not soft skills! Throughout this book, I’ll reference the quantifiable value of your business relationships, such as time-­to-­market of a new product, time-­to-­impact by a new employee, opportunity costs of investing in the wrong business relationships, and needs-­ based segmentation when implemented alongside a strategic relationship road map. 2. “Networking is easy; anyone can do it”—­Many believe business relationship development is easy and straightforward. But, as you may have already experienced, it is not! At best, it’s episodic and is carried out in organizational pockets by a few individuals. In many organizations, it’s not institutionalized, consistently led, measured, celebrated, learned from, or seen as a valued asset. 3. “She’s just that way”—­Many believe relationship building is in one’s natural DNA. Some people are born with the innate ability to strike up conversations, get others to act on their behalf, and connect the dots between that initial conversation and some fantastic outcome. Nonetheless, we’ve proven that it can be taught, and many introverts build incredibly valuable, authentic, and lifelong relationships.  Allana Akhtar and Caroline Hroncich, “20 Soft Skills Every Leader Needs for Business Success,” Business Insider, September 2, 2020, https://www.businessinsider .com/soft-­skills-­leaders-­need-­for-­success-­2016-­4 1

4

Relationship Economics

4. “Wo/men have it made”—­Some attribute women’s networking success to their friendlier natures or fantastic storytelling tendencies. Others point to men’s success in getting deals done on golf or fishing trips. Both perspectives may contain contributing factors, but there is more to the gender gap in how we identify, build, nurture, and sustain value-­ based business relationships. 5. “I’m just here to get a deal done”—­Isn’t networking just schmoozing, manipulating, or pulling fast ones over others? Sure. In the next chapter, I distinguish highly transactional networking from deep, meaningful, value-­ based business relationships. 6. “Networking is just part of the job”—­One expects business professionals in sales, marketing, channel/distribution, investor relations, or other externally facing roles to be naturally relationship-­centric. But why would I care about relationships if I’m in accounting or software development? The last time I checked, none of us is an island. Even the accountant and the software developer must work with others to get things done. 7. “Watch Sam; he’s a fantastic networker”—­Most organizations believe that their employees should pick up relationship development best practices through osmosis! In reality, most people learn relationship development skills from their parents or by modeling their managers’ right (and wrong) behaviors. I wonder what relationships you and your leaders are modeling—­more on this later. 8. “4.0 GPA; can’t get a job!”—­Our high schools and universities are doing every student a disservice by not teaching business relationship fundamentals to every student before graduating. Beyond their foundational education and whatever professional accolades they can acquire, their portfolio of business relationships will be their biggest life-­ long asset! 9. “We focus on core competencies in our world-­ class L&D Organization”—­Every organization is handicapping

Introduction: Welcome to the Age of Hybrid Relationships

5

its employees by not training and developing their interpersonal communication and interaction, influencing without authority, and engaging in productive conflict. These are relationship-­based skills, knowledge, and behaviors. Instead, we train these employees on products, services, competitors, marketplace, processes, technologies, and NOTHING about how to succeed by developing a lifelong passion for authentic and value-­ based business relationships, both within and external to their organizations! 10. “Relationships don’t belong in our Objectives and Key Results (OKRs)”—­Every leader I’ve ever met wants their team to become more relationship-­ centric. They expect exceptional customer experiences, their teams to go above and beyond the minimum requirements of the role, to demonstrate that they care, to pay attention to details, and so on. Yet, none of these relationship skills, knowledge, and behaviors are part of the interview, onboarding, peer review, promotional consideration, or anyone’s compensation or bonus structure! If we don’t inspect what we expect, how can we believe relationship development will flourish in our organization? 11. “Coworkers from the Middle East, Asia, or Latin America—­. . . are friendlier, warmer, more hospitable, and are natural huggers,” a training participant once told me this. Born in the Middle East, I can attest that those attributes are a big part of our culture. But, beyond painting with a vast brush, keep in mind (a) not always, so don’t make geographical judgments; and (b) I have worked with plenty of warm and friendly huggers from the Midwest, parts of Europe, and South Africa. 12. “We can automate relationships!”—­I’ve been blessed by technology for most of my professional career. I, however, have yet to find a suitable technology that replaces you and me, meeting in person, shaking hands, or looking each other in the eye. Want proof? Have you noticed most organizations leave out the relationship in their Customer Relation­ ship Management (CRM) systems?

6

Relationship Economics

13. “We have a family culture here”—­There is a perception that small companies or family-­owned businesses retain a family-­like culture where employees genuinely love, look out for, and support each other. Undoubtedly, as every organization grows, expands its market scope, and scales, it infuses differing personality types, likes, dislikes, backgrounds, behavior styles (many healthy, a few not), and the potential for conflict. However, I’ve met several organizations that have maintained a fantastic culture as they’ve scaled. 14. “She gets me!”—­Remember the high school lunchroom and the different cliques that would sit together, excluding those who didn’t fit their requirements. Or the principal’s daughter, who always seemed to get special treatment. Regrettably, that still goes on in many organizations. Yet, visionary leaders tend to gravitate toward meritocracy (the value and impact of your work) much more so than mediocracy (attributes such as tenure, or “Just keep your head down, get along and go along!”). 15. “We don’t do relationships”—­That’s what one procurement leader once told me, trying to emphasize the importance of “best value” in their blind auction system where vendors blindly bid on a piece of business. I wonder what happens when that faceless transaction needs a relationship to bail it out of a jam, escalate a problem, or expedite a necessary shipment. Lack of a relationship is another reason many business professionals see functions such as procurement, HR, IT, or legal as business inhibitors rather than enablers! 16. “I’m not a people person”—­What does that mean, exactly? You’re the Unabomber?! If you want to read more or become a better person, God Bless You. You don’t need anyone else to do that. But, conversely, if you want to get  almost anything else done in business, you’ll need relationships to help you. So stop with the negative self-­talk. It’s not helping you. 17. “Who do you know that can . . .”—­Ever noticed people asking this vague question for an introduction or a referral

Introduction: Welcome to the Age of Hybrid Relationships

7

to someone they need to meet? I always want to reply, “I know a lot of people. Yet, the vague nature of your question leaves me baffled as to who exactly do you want/need to meet and why.” Specificity conveys credibility. 18. “By the end of the day .  .  .”—­Work with anyone who always demands that you prioritize their needs above and beyond everything else? Don’t you want to say, “You’re right. I have nothing else on my plate, and I’d be happy to drop everything else I have going on to prioritize your needs!” We’ll discuss relationship Givers, Takers, and Investors later in the book. 19. “Me, Myself, and I . . .”—­A professional acquaintance I’ve met at an industry association we both belong to is painful to be with because every story at every gathering is always about him. From how he has performed surgery (not a medical doctor, by the way), to how he’s been in space (again, not an astronaut), to his 1,000-­page book that hundreds of publishers couldn’t wait to publish (it was self-­ published), to his global offices in eighteen different countries (no one I know has ever been to any), he’s a complete bore. And an ass because he’s socially inept for someone who seems intelligent! 20. “We’re very focused on the what and the how at the moment!”—­This is one of the worst excuses for ignoring the impact of business relationships. Whenever we’re faced with a challenge or an opportunity, we often ask, “What should we do,” or “How can I do it,” but seldom “who”-­ questions! I believe there are no new challenges or opportunities, only those you haven’t thought of yet. So, throughout this book, we’ll talk about asking more “who” questions and a disciplined process for connecting the dots between what you seek and the relationships you already have! 21. Bonus: “Kids today . . .”—­We tend to paint the next generation, Millennials or Gen-­Z, with a vast brush. I’m often told that they don’t know how to build relationships—­that’s not true. They simply build relationships very differently

8

Relationship Economics

than the generations before them.2 Not right or wrong; just different, perhaps more digital-­led, often transactional based on their immediate needs, yet it’s a mistake to assume they’re incapable or that they’re doing it wrong.

Physical, Digital, Global As I wrote in my most recent book, Curve Benders, the COVID-­19 pandemic illustrated how woefully underprepared we were. Entrepreneurs and leaders alike were no strangers to a crisis, as it’s a fundamental part of every role—­often an accelerator of real and lasting change, technology adoption, and market innovation. After the dot-­com crash of 2000, e-­commerce, social media, and highly interactive web experiences accelerated their proliferation. After the 2008 global financial crisis, Uber and Airbnb emerged as gig economy giants. Similarly, the pandemic has dramatically elevated the role of telehealth, remote working, online education, and micromobility (transportation for fewer individuals over shorter distances).3 Beyond the initial supply shock, subsequent demand shock, and lack of resilience quotient in many leadership teams, it became abundantly clear that many organizations were not video cultures. Because most of the workforce came into a physical office every day and traveled to meet customers, partners, and different teams, we were much more comfortable initiating and nurturing our business relationships physically and in person. 2  Tracy Francis and Fernanda Hoefel, “‘True Gen’: Generation Z and Its Implication for Companies,” McKinsey, November 12, 2018, https://www.mckinsey.com/industries/ consumer-­packaged-­goods/our-­insights/true-­gen-­generation-­z-­and-­its-­implications­for-­companies

James Collins, Good to Great: Why Some Companies Make the Leap and Others Don’t (New  York: Harper Business, 2001). Kim Parker, Juliana Menasce Horowitz, and Rachel Minkin, “How the Coronavirus Outbreak Has and Hasn’t Changed the Way Americans Work,” Pew Research Center, December 9, 2020, https://www.pewresearch .org/social-­t rends/2020/12/09/how-­t he-­c oronavirus-­o utbreak-­h as-­a nd-­h asnt­changed-­the-­way-­americans-­work/ 3

Introduction: Welcome to the Age of Hybrid Relationships

9

The minute the global economy shut down and we were forced to meet online, day after day, week after week, the business community’s inability to engage and influence each other digitally became obvious. Most hunkered down to focus on fewer, already established relationships rather than casting new nets, far and wide, as the uncertainty of the times prioritized the known and the familiar. Leaders created daily huddles of their immediate direct reports to get updates from the field, share crisis communication from the top, and solidify a game plan to cascade immediate priorities quickly. Individual safety concerns necessitated corporate policies for no travel, mask mandates, and empathy for working parents with homeschooling obligations or those directly affected by the illnesses and deaths from the pandemic. Our family had just returned from a spring break trip in early March 2020 from Cancun, Mexico. Global travel was starting to shut down. Offices and schools were instituting “temporary” work and learn-­from-­home campaigns. It dawned on me that my 208 days on the road while delivering some 60+ global engagements a year was a thing of the past. It was time to recalibrate. So I doubled down on three key areas: 1. Amplified Digital Presence—­the webcam in my laptop was inadequate. On several early Zoom meetings, I noticed that one or two others showed up with exceptional clarity and an almost 3D appearance. I quickly decided to get educated and invest in a dramatic upgrade of my digital brand with a 4D camera, fiber access to my home office, multiple lights, a quality microphone, and physical banners in my background. (I hated the virtual ones where half of your body disappears each time you turn!) I upgraded my infrastructure with a virtual studio and multiple monitors. I quickly learned how to navigate digital tools such as Zoom, Miro, Canva, mmhmm, and Anchor—­in essence, my tech stack. See Figure I.1. 2. Top 100 Relationships—­I began making a list of my most valuable business relationships. It was easy to reach the first ten: existing clients I was already helping. I went on to helpful

Productivity Email

Creative

G-Suite

Calendar

LayOut

CRM

Notes Canva

Salesforce

Content Repurposing

Social Distribution

Otter.ai

EM Marketing

Later.com Active Campaign

Podcast Creation

Auxbus

Blog Website

Zencastr

Wix

Podcast

Anchor

Webinars GarageBand

AWS

GoToWebinar

Catch Engine

Training Portal Quizes Zoom

Audience Engagement

Mentimeter

Eventbrite

Miro

Figure I.1  Sample Personal Tech Stack

10

Introduction: Welcome to the Age of Hybrid Relationships

11

coaches, mentors, and sounding boards, and then to prospects in discussions before the shutdown. Then, I added neglected relationships that I was hoping to revive. I reached 100 contacts. I was intentional about reaching out—­not to sell them anything, but to ask, “How are you doing, what are you hearing, seeing, thinking, or doing differently?” Their answers were insightful, moving, painful, and inspiring. All were gracious and appreciated our conversations. During our talks, I had noticed unique needs—­this person needed personal protection equipment, while others had excess supplies. Another had to implement a reduction in force while others were searching for talent. Yet another needed a new supplier since the Chinese one could no longer fulfill their needs. So I began to connect seekers and solvers without asking for anything in return. I also shared insights and best practices from noncompeting organizations to help others struggling with communication, collaboration, and the right priorities with their available data. Finally, I put leaders across industries together through “Virtual Friends of Nour” gatherings and shipped care packages to their homes. 3. A Global Perspective—­ I can’t take credit for this one. Through his MG100 program, Marshall Goldsmith had the brilliant idea of daily Zoom calls early in the pandemic to give, and get, updates from his strong portfolio of global relationships. Along with the vice-­chair of Global Alliance for Vaccines and Immunisation, Alan Mullaly, former CEO of Ford, and Dr. Jim Kim, former CEO of the World Bank, executives of global companies in Italy, Brazil, China, Australia, coaches, scientists, educators, advisors, public-­ private partnerships all shared real-­time daily global updates on what they were hearing and seeing on the ground. Similarly, I also joined the Atlanta Chamber of Commerce’s weekly updates, where CEOs of companies such as Delta Air Lines, UPS, Home Depot, the CDC director, and the Georgia governor would give the small group of participants updates on the number of Covid cases, hospitalization, and agile pivots in their strategies, market presence, and relationships.

12

Relationship Economics

These three investments proved invaluable, and they’re paying dividends 18–24  months later. Subsequent conversations with my top 100 relationships pointed to similar investments by other leaders, particularly in their physical, digital, and global relationships. This new lens on hybrid relationships created new challenges, such as wondering, “Are they thinking or is their video frozen?!” But it also created new opportunities—­executives were suddenly available, accessible, and eager to connect due to lack of travel, in-­person office meetings, and the need to continue handling their respective functions. In addition, it led many of my clients to gain customers and thrive—­in the case of The Wine Group, Samsung, and Humana, to name a few, due to the highly pandemic-­friendly (wine, electronics, and remote health care) nature of their businesses. As a result, they could access new capital, add new offerings, experience atypical revenue and profitability increases, and hire talent that ordinarily would have been unavailable. Others lost customers and found that they discontinued some offerings, experienced atypical revenue declines (several restaurant groups, retail, and the entire travel and hospitality industry), and furloughed or laid off employees.4 For example, a Marriott executive friend revealed that they had furloughed 95 percent of their corporate headquarters staff. Another hospitality client told me that 90 percent of their hotels were closed. At the same time, an executive of a chain of casual dining restaurants shared that their revenues were down 95 percent in the first six months of the pandemic. Many companies changed their product mix, supplier base, customer counts, employee situations, and revenue predictability. Particularly fascinating to me have been the fundamental shifts in their business models: in-­person businesses such as consumer services and retail implemented health measures, distanced themselves to reduce contact, and aggressively went online. Apple stores, globally known for their high-­touch and in-­person vibe, asked customers to schedule their visit, pick up or drop off what they needed, and promptly leave with only a socially distant number of customers in the store at any time. Conversely, many online retailers created 4  Darren Dodd, “Pandemic Winners and Losers,” Financial Times, April 23, 2021, https://www.ft.com/content/52026a57-­ed8d-­4877-­9663-­ed8884f6c7a1

Introduction: Welcome to the Age of Hybrid Relationships

13

brick-­and-­mortar presence, pop-­up click-­and-­pick-­up locations, and home delivery options. The dramatically reduced in-­ person contacts significantly impacted important relationships we all needed to develop and maintain. Every leader had to navigate changes in these relationships, from the board of directors to investors, suppliers, customers, employees, and fellow team members. Virtual contact created a need for more frequent communication to maintain business relationships. The constant barrage of disheartening news around the pandemic created the need for more morale boosting and team building to keep employees connected and engaged. Changing suppliers meant more time negotiating with partners and demonstrating greater flexibility. For many, sales cycles became lengthened and profoundly increased the value of flexibility, service, and consistency on everything from delivery time frames to pricing and fulfillment processes. Many facets of business relationships—­ from identifying and engaging to investing in, influencing, sustaining, and capitalizing on them may, in fact, have changed forever. For example, many investors believe they would be willing to fund a company without meeting the founders in person, even though most would have never done that in the pre-­pandemic world.5 This is only one example of a considerable change to the critical formation phase of essential relationships. How about those who joined organizations amid the pandemic and never met a colleague in person? I worked with several clients on projects without meeting them in person until recently. In the business-­to-­ business (B2B) sales world, Mary Shea, former principal analyst with Forrester Research, forecasts that in-­person meetings might decline by as much as 80 percent in the post-­ pandemic world as companies increasingly discover that digital interactions are effective and dramatically less costly.6 5  Taylor Soper, “This VC Firm Just Led a Startup Investment without Meeting the Founders in Person: Here’s How It Went,” Geekwire, June 16, 2021, https://www .geekwire.com/2020/vc-­firm-­just-­led-­first-­investment-­without-­meeting-­founders-person-­ heres-­went/

 Mary Shea and Meredith Cain, “The State of Digitized Selling,” Forrester Research, April 5, 2021, https://www.forrester.com/report/The+State+Of+Digitized+Selling/ RES150015 6

14

Relationship Economics

According to McKinsey research, jobs with the highest physical proximity will likely continue to be disrupted.7 Their study of 800 occupations grouped in 10 work arenas according to their proximity to coworkers and customers highlights interpersonal interactions on-­site and indoors, factors that will continue to make in-­person relationship development and nurturing challenging for the foreseeable future (Figure I.2). Your personal and professional growth will be similar. You know your core competencies and career hopes. However, you can’t possibly know all the obstacles in your path. Beyond your professional background, your biggest assets in that growth journey are the insights from your portfolio of authentic relationships.

Battle Tested What I don’t believe will change in the post-­pandemic world are critical attributes of the most productive and value-­based business relationships throughout our careers. These are the attributes that I’ve discovered: • Irrefutable laws – Gratitude, reciprocity, and paying it forward • Fundamentals  – Likeability, integrity, and indisputable trust (“Zero or One”) • Cadence  – Consistent touch base, not going dark on your most valuable business relationships • Breadth – Deep generalist, creative, resourceful • Depth – Competencies, capabilities, reliability, and outcome-­ focused • Impact  – Business results, significance, differentiated, and materially better off 7  Susan Lund, Anu Madgavkar, James Manyika, Sven Smit, Kweilin Ellingrud, and Olivia Robinson, “The Future of Work after Covid-­19,” McKinsey Global Institute, February 18, 2021, https://www.mckinsey.com/featured-­insights/future-­of-­work/ the-­future-­of-­work-­after-­covid-­19

Figure I.2  McKinsey & Company Overall Physical Proximity Scores by Work Arena Source: McKinsey & Company.

15

16

Relationship Economics

Relationship Economics is not about networking, manipulating others to get what you want, or the transactional nature of how many people do business. Instead, it is unequivocally about the role of strategic relationships in every facet of your personal and professional success, your team’s evolution, and your organization’s transformation. From strategy to prioritized pursuits, dynamic organizational structures, fluid resources, metrics and milestones, compensation, real-­ time dashboards, analysis, and course corrections, I believe every vital facet of your success heavily depends on the relationships you choose to invest in. And make no mistake about it, it’s a choice. On any given day, you have the option to engage many people. Which ones? How do you know? And, if you believe that relationships are an investment, and you cannot invest in everyone equally, how will you choose which ones to invest in? My journey began more than five decades ago when my dad would walk me through the bazaars of Iran during our Friday errands. I didn’t understand the notion of relationship economics then, but I certainly do now. Dad got things done by getting a plumber to the house that afternoon or gaining access to an influential politician by leveraging his most valuable relationships in the thriving favor economy. The local version I saw then is not very different from the global one where I operate now. I don’t know any organization that can cut its way to growth. So where will the subsequent significant enterprise growth and value creation campaign come from? It may be worthwhile to consider that some of your organization’s most promising opportunities are among its current portfolio of relationships. The challenge is that no relationship exists between buildings or logos! It’s always between individuals, and from frontline contributors to senior leaders and board members, every single person in every organization has both the opportunity and the tremendous responsibility to identify, nurture, sustain, and capitalize on its most significant asset: its portfolio of relationships. This book is a how-­to guide. Apply the ideas within and go beyond exchanging business cards, working in a room, or getting the most out of a conference. Its focus is a strategic investment in relationships for an extraordinary return.

Introduction: Welcome to the Age of Hybrid Relationships

17

Having spent thousands of hours over the past two decades advising and coaching high performers in a broad array of industries, I submit that, beyond your technical, product or service, and overall market expertise, your unique and only sustainable differentiator is your ability to engage and influence others, often without authority. Yet, most of us don’t spend enough time building and nurturing the key relationships we need to succeed. That’s where relationship economics will create a far greater return on your relationship investments. The academic notion of relationship economics, inspired by the famous British economist Ronald Coase and Nobel Prize–winning economist and political philosopher Friedrich Hayek, uses economic tools to study variables traditionally focused on by sociologists. The practical notion of relationship economics isn’t about networking. Instead, it’s about learning to invest in people for an extraordinary return. It’s about exchanging relationship currency, accumulating reputation capital, and building professional net worth. It’s about learning the art and science of transforming your most valuable relationships into execution, performance, and results. In my pre-­pandemic global trips to Istanbul, Kuala Lumpur, and Dubai, I am often reminded that the rest of the world builds relationships from which they do business. In many Western business cultures, we’re so focused on the business part that if, and only if, that goes well, we’ll think about asking our colleagues about their families or that which brings them absolute joy outside of work. Even the very language used in other countries highlights the importance of building these connections. In Arabic, for example, the literal translation of bin is the son of. One’s genealogy, sources of referrals, and collective cultural history carry more weight toward business success in many parts of the world than any product or service you represent, access you desire, or project you’re trying to complete. In China, guanxi (pronounced guan-­shi) is the network of relationships among various parties that cooperate and support one another. Beyond the perceived advantages of an organization’s products or services, with the right guanxi, an organization in China minimizes risks, frustrations, and disappointments when doing

18

Relationship Economics

business; determines its competitive standing in the long run with the relevant Chinese authorities; and minimizes the inevitable risks, barriers, and setups one will encounter. In essence, relationships are the gateway to business in the rest of the world, in contrast to the West, where business is often the gateway to relationships. Unfortunately, the world economy does not understand our cart-­before-­the-­horse tactics. In many global circles, our tactics appear insincere, shortsighted, and even flat-­out rude. By understanding and developing the three types of relationships—personal, functional, and strategic—­ you hone critical skills to develop a nose for identifying significant opportunities and determining which relationships to tap for execution, performance, and results (Figure I.3).

Figure I.3  Relationship Types: Personal, Functional, Strategic

Introduction: Welcome to the Age of Hybrid Relationships

19

Personal relationships are the easiest for most; they’re the ones you build at home, at your kids’ soccer games, at school, and with your favorite community friends. These people like you for who you are, and your interactions with them take place in a safe environment for exposing personal challenges and seeking insights. But unfortunately, the obstacle for many is the inability to bridge relationship creation to relationship capitalization. As a result, you have no idea if or how relationships may be relevant to your professional life. Functional relationships are likewise easily understood. They are those you build at work to perform your daily functions. They’re formed with peers, subordinates, and superiors and include your exchanges with customers and suppliers distinctly focused on getting tasks at hand completed. The relationship members are not discretionary (you don’t often pick the people you work with), usually mandated by your function, job description, and key corporate initiatives—­all of which are typically driven by others. You build functional relationships with those who can support your efforts or help you overcome obstacles. Although they are practical for the time being, this relationship-­ building has little foresight and tends to keep us busy with the urgent tasks on our respective to-­do lists. They’re safe because of the context of the work you do together. Transactional relations won’t enable you to see over the corporate horizon or around corporate corners for what’s next. They will not allow you to see faint emerging trends before your competition or alert you to early warning signals that may threaten your market positions. Although personal and functional relationships help us get by, they’re seldom significant enablers of our journey from now to next. Personal relationships are a want; functional relationships are a need/obligation, and a bonus if they have a personal aspect. Strategic relationships are the ones that are most often underdeveloped. Strategic relationships elevate your efforts and thinking beyond your current realm of responsibilities and push you to think about the new business opportunities and critical stakeholders that you’ll need to succeed. Strategic relationships transcend time, function, and geographic limitations. They create accelerated access, long-­ term personal and professional growth opportunities, and new market

20

Relationship Economics

insights, and they shed light on the return on influence versus concerns about corporate politics.

This Book’s Promise An immigrant, I came to this country on May 23, 1981, as a teenager with $100, a suitcase, and no fluency in the English language. Over the past four decades, I’ve developed personal, functional, and strategic relationships to earn Eagle Scout rank, get an undergraduate and a Top  10  MBA program education, build and enhance my career, and create significant enterprise value through invaluable colleagues, customers, and suppliers. As an entrepreneur, I’ve leveraged relationships to raise institutional capital, participate in various mergers and acquisitions, attract, develop, and retain global talent, build a multitude of brands, invest in and serve on several private company and nonprofit boards, speak, coach, and advise leaders of global clients. I know how to strategically leverage business relationships toward quantifiable outcomes, and so can readers of this pragmatic how-­to book of global best practices. But it is critical to point out what this book is not about. It’s not about networking, using people, learning how to become more manipulative, keeping score, or doing for others only if they do for you. It’s not about schmoozing, working a room, or using others, in general, to get what you want. I’m also strenuously against special favoritism, nepotism, cliques, secret societies, and, in particular, any efforts designed to be antidiversity or anti-­inclusion. Instead, I firmly believe that ethnic, gender, and cognitive diversity is more than affirmative action or a diversity, equity, and inclusion checkbox. Real diversity is embracing unique walks of life and experiences, ultimately delivering a dramatically broader perspective. We are all products of the advice we take. The advice I hope to share with you throughout this book is a fresh perspective on the relationships you have today and the ones you should invest in nurturing for a brighter personal and professional future. As you read these chapters, I hope you’ll develop the mindset, tool set, and road map to fuel your personal and professional growth by better understanding your biggest asset.

Chapter 1

Networking = NOTworking JUST STOP! You don’t know anything about me, we have NO relationship, and you’re bombarding me with irrelevant products and services on LinkedIn! You’re singlehandedly ruining this platform (more leaders are disengaging from LinkedIn daily!), destroying your credibility (fastest way to get blocked!), and diluting the real impact of others who use the platform for good (research, interviews, and authentic, value-­based connections). Do your due diligence, make your outreach personable, relevant, and effective, and build a relationship first (read: invest) before you ask for a favor, a sale, or access to my relationships. This post on LinkedIn yielded over 20,000 views and 50+ comments by others who, after such experiences, felt strongly about the abuse of perceived relationships online. I’d just taken the time to schedule an intro Zoom with someone who had reached out to “learn more about your business and share unique insights I have discovered via an audit of your website.” Intrigued, I looked forward to our discussion. Instead, I left angry and incredibly disappointed. Online scams and relational laziness in doing zero homework or knowing anything about the target audience aren’t new. My anger arose from the betrayal of initial trust and the self-­serving garbage that had infiltrated LinkedIn—­and I’m far from alone with this sentiment.1 More importantly, this abuse of kindness poisons the well for others who do their homework and have a value proposition.  Rhymer Rigby, “LinkedIn and the Art of Boastful Self-­Promotion, Financial Times, July 8, 2019. 1

21

22

Relationship Economics

For far too long, “networking” has been considered a quick path to meet new contacts. When done intelligently, it can open doors to new clients, jobs, investors, and global resources to help you solve challenges or benefit from new opportunities. However, poorly attempting to connect with others waste time, dilute, or permanently damage your brand, credibility, and even friendships. The challenge is that most people network so poorly, haphazardly, or in an obligatory manner that even the idea of networking has become synonymous with schmoozing, snake oil salespeople, or never-­ending and often pesky job seekers and professional brown nosers.

The Impact of Social Capital In 1916, L. J. Hanifan, practical reformer of the Progressive Era and state supervisor of rural schools of West Virginia, described social capital as “those tangible substances [that] count for most in the daily lives of people: namely goodwill, fellowship, sympathy, and social intercourse among the individuals and families who make up a social unit.”2 Isn’t it interesting that Hanifan’s account of social capital anticipated the connective tissue in our day-­to-­day interactions as human beings? Unlike the generation before mine, which was involved in various lodges, parent-­ teacher associations (PTAs), churches, and political parties, we are becoming dangerously divided as a society, and it’s only natural to see the ripple effect in our business interactions. Indeed, repeated research reveals that America has become one of the world’s most socially distrustful nations; trust in other members of society has dropped by 33 percent since 1962.3 My intent in the following chapters is not only to illustrate a practical and applicable process for identifying, building, nurturing, and leveraging relationships critical to your success but also to help  L. J. Hanifan, “The Rural School Community Center,” The Annals of the American Academy of Political and Social Science 67, no. 1 (September 1, 1916): 130–138.

2

 Kevin Vallier, “Why Are Americans So Distrustful of Each Other?” Wall Street Journal, December 17, 2020. 3

Networking = NOTworking

23

quantify the economic value of your relationships. In short, relationship creation alone won’t suffice—­regardless of how many Zoom meetings, coffee or lunch visits you schedule. Instead, savvy professionals find opportunities to exponentially enhance, elevate, or amplify their business relationships by bridging relationship creation with relationship capitalization. One of the most valuable outcomes an intentional investment in your business relationships can create is to fuel your growth. Here are just a few examples: • Personally—­you can learn new skills, pick up new hobbies, or develop new passions through your business relationships. • Professionally—­new ways to collaborate, solve problems, or make tough decisions; expand your current realm of responsibilities across functions, business units, or geographies. Find a new job that is more rewarding and better aligned with your values and professional aspirations. • Growth and Impact through Your Team—­getting critical initiatives completed more quickly with more significant impact; access to new subject-­matter experts currently not available to you. Greater visibility up, down, and across the organization for the results your team delivers. • New Talent—­whether within or external to your organization, business relationships often lead to identifying, attracting, and retaining exceptional talent. • Real Innovation—­whether iteration (doing the same thing better), innovation (doing new things), or disruption (doing new things, which make the old obsolete), research shows that your chances of evolving your business model, launching new products or services, and uncovering real innovation are all dramatically stronger through your business relationships.4 • Net New Enterprise Growth—­new sources of profitable revenue, cost-­cutting measures to preserve margins, infusion of  Christina Öberg, “The Role of Business Networks for Innovation,” Journal of Innovation & Knowledge 4, no. 2 (2019): 124–128. 4

24

Relationship Economics

new capital, or potential mergers and acquisition opportunities drive organic and inorganic growth. In every facet of growth, three fundamental attributes create a recognizable differentiation—­ amongst your peers, across diverse teams, as well as industry competitors: 1. Trajectory of Growth—­How much growth (rise) over time (run) or slope of that growth? 2. Speed of Growth—­How fast did you get there, and is that growth sustainable moving forward? 3. Efficiency of Growth—­How many resources (time, effort, and capital) did you expend to deliver that growth, profitability, or the return on investment (ROI) of that growth? Strategic relationships accelerate all three. In delivering these attributes, two ingredients will make all the difference. The first one is the art of building and nurturing value-­based business relationships. For many, this is the ability to engage others through exchanging business cards, working a meeting or a conference, and building transactional relationships. There is little or no shortage of resources in the marketplace today to help you network. The second is more academic and complex, the science of business relationships. Social network analysis (SNA) studies human interactions and is the foundational idea behind LinkedIn, Facebook, or Twitter. It’s an essential technique in modern sociology, where social structures are studied using networks. By analyzing network structures such as nodes (think of individuals across a diverse organizational team) and the ties between them (casual interactions or deeper/more meaningful relationships), we can study how likely it is that information will circulate, the accuracy of the information spread, knowledge gains, and sentiments develop throughout the network. These networks can be visualized through sociograms representing points and ties, qualitatively assessing networks by varying the visual representation of their nodes and edges to reflect attributes of interest (Figure 1.1).

Networking = NOTworking

25

Energizers Create contagious support

Brokers Link sub-groups

Challengers Nurture productive conflict

Connectors Leverage the network

Figure 1.1  Structure-­Based Roles of Network Actors Source: Rob Cross, Heidi Gardner, and Alia Crocker, “Networks for Agility: Collab­ orative Practices Critical to Agile Transformation,” Connected Commons, 2019.

One fascinating real-­world application of SNA is mergers and acquisitions (M&A) as an enabler of enterprise growth. When many CEOs explore opportunities to boost their enterprise performance or jolt new excitement into a new, long-­term growth strategy, they go shopping—­for other companies. The process is incredibly seductive, as companies now spend an estimated $3.6 trillion yearly on acquisitions.5 Yet, countless studies put the acquisition failure rate at 70–90 percent.6 How is that possible? The studies offer myriad theories to explain this abysmal statistic—­ from executives picking the wrong acquisition targets and missing the mark on the strategic reason to do the deal, confusing potential short-­term gains with long-­term transformative growth prospects, to overpaying and completely misjudging 5  Patturaja Murugaboopathy and Gaurav Dogra, “Global M&A Volumes Hit New Record in 2021, Overtaking Last Year’s Haul, Reuters, August 12, 2021, https://www .reuters.com/business/global-­markets-­ma-­2021-­08-­12/

 David Garrison, “Most Mergers Fail Because People Aren’t Boxes,” Forbes, June 24, 2019.

6

26

Relationship Economics

what it takes to integrate an acquisition.7 Mine is a short version: lack of authentic, highly diverse, value-­based internal and external strategic relationships! Very few people understand how to identify target acquisitions that can transform a company, how much to pay for them, and how to integrate them. SNA can provide data-­driven transparency to the M&A process. Social network analysis visually demonstrates hubris (through the frequency of interactions), which fuels false beliefs about the acquiring company’s leadership, current relationships, and future aspects of those relationships when grafted into a new structure. SNA can illustrate patterns of relationship intentionality to highlight the target company’s success factors better. Data analytics and predictive modeling can quantify the talent inventory and can clarify the social compact between leadership teams. Relationship Economics—­the art and science of relationships—­is the balanced, hybrid approach necessary for anyone who needs to build and leverage relationships to get things done. Effectiveness and productivity are both measures of outputs, but efficiency also includes the amount of input required. So let’s start by looking at why most people are inefficient in business networking and building long-­term, value-­ based relationships.

Ten Reasons Why Most Networking Doesn’t Work! In recent years, we have become more likely to call a colleague who works down the hall from us—­or, worse yet, send a text or post a note on Slack—­rather than make the short trip for a face-­to-­face visit. The global pandemic aggravated this cultural disconnect. Social distancing has suddenly become social isolation. Ask many business professionals in the post-­pandemic business climate to clean up, dress in professional  Godfred Yaw Koi-­Akrofi, “Mergers and Acquisitions Failure Rates and Perspectives on Why They Fail,” International Journal of Innovation and Applied Studies 17, no. 1 (2016): 150–158.

7

Networking = NOTworking

27

attire, get in their cars, or fly to meet others, and you’re likely to be met with an incredulous objection: “Can’t we just meet over Zoom?” After several months of conference calls, voice messages, and emails on critical projects, and even attending the same company meetings, we could pass key team members in the street (or our corporate hallways—­if we ever get back into an office) and have no idea who they are! So who are you emailing, asking for resources, selling to, listening to, or asking for help? When technology, even with its vast operational effectiveness and efficient capabilities, determines the nature of our human interactions, is it any surprise that during the global pandemic, many believed that our sense of community and our ability to touch people dramatically eroded? In recent years, the popular and business press have published increasing numbers of articles under headlines like “99% of Networking Is a Waste of Time”8 and “Networking Events Are for Suckers.”9 One consistent reason people give for their frustration with networking is a lack of quantifiable results. Whether we are talking about senior executives, business unit leaders, project managers, or salespeople new to a territory, it’s incredible how many undervalue their relationships’ quantifiable value. Beyond your educational foundation, professional or industry experience, and all the skills and talents you have acquired over the years, your network’s breadth, depth, diversity, and relevance transcend geography, function, company, and often any point in time. I split business networking into three stages: preparation, interaction, and follow-­through. Ten culprits render traditional networking ineffective (Figure 1.2). Let’s take a quick look at each.  Greg McKeown, “99% of Networking Is a Waste of Time,” Harvard Business Review (January 2015). 8

 Will Yakowicz, “Networking Events Are for Suckers,” Inc., https://www.inc.com/will-­ yakowicz/key-­to-­successful-­networking-­is-­to-­stop-­networking.html

9

28

Relationship Economics

Figure 1.2  Ten Reasons Most Networking Doesn’t Work

Preparation Phase Your goals, strategies, and tactics will drive efficiency in the preparation phase.

1. Lack of Purpose Most people network without a purpose. When they ask others, “Do you know this executive at XYZ company?” most listeners think, “What is your purpose here? Why do you feel you need to get to know this person?” Most people either don’t have a well-­thought-­out answer, or their response is solely transactional and based on an immediate need, such as a new job or a new client. The purpose is your guiding light, starting with a healthy self. If you’re not centered—­ if you don’t know who you are, what you stand for, and your intent for building relationships—­how can

Networking = NOTworking

29

you articulate the same to someone else or make course corrections in your efforts along the way? There is no right or wrong answer here, but you must start your relationship-­building path with an overarching purpose. For example, there is the parental purpose: I want to pave an easier way for my children. Building and nurturing key relationships will make it easier for them to get into better schools, land more promising jobs, and have access to a greater wealth of time and opportunities than I did growing up. Others have defined their purpose as personal and professional growth: By getting to know others, I get to know myself better and can build on my strengths. By starting with a concise purpose of personal and professional development, building and nurturing productive relationships becomes your compass rather than your stopwatch. Said another way, where you’re going and getting there in your professional growth journey matters far more than how fast you’ll get there.

2. Fuzzy Goals To become a better person or read more, you don’t need other people to accomplish these goals. However, if you want to get  almost anything done in business, you’ll need others to get there. It’s easy to think about the relationships we want or may need; it’s considerably more challenging and often a struggle to develop and sustain these relationships. The other challenge is that no relationship is a stand-alone affair; no one builds relationships because they’re bored. Everyone is after a specific individual, team, or organizational outcome. Without concise, measurable, relationship-­centric desired results, many of your investments in relationship creation will be lost in those relationships’ nurture, development, and ultimate value creation. You’ll spend a lot of time and effort on unproductive coffee shop or lunch visits and have little to show for that investment. Are you new to a project team, sales territory, divisional, or leadership role? How will networking help you succeed, given the dynamics of your new role? Which relationships will help you enable, accelerate, or maximize to achieve your goals?

30

Relationship Economics

Management by objectives, an approach where employees collaborate with their boss on a set of goals to focus on achieving throughout the year, was introduced in 1954 by Peter Drucker.10 Unfortunately, goals have come to dominate our corporate landscape, and managers aspire to make their goals SMARTER: specific, measurable, achievable, realistic, time-­ bound, evaluated, and reviewed. What I’ve found in my advisory work is that this deeply ingrained method of an annual cycle, privately set, reviewed, and strongly linked to incentives, does more to undermine alignment, coordination, and agility in our dynamic business environment than Drucker ever imagined. Relationship-Centric Goals can accelerate strategy execution when aligned with business priorities, account for interdependencies across team and functional silos, and enable agility and course correction when the environment changes. Otherwise, individuals can achieve their SMART goals, and the organization can still fail to meet its desired outcomes. Donald and Charles Sull studied how companies like Google, Intel, and Anheuser-­Bush InBev have pioneered and refined an alternative approach to harnessing the power of goals to drive and align action. Their findings of four core principles using the acronym FAST: frequently discussed, ambitious in scope, measured by specific metrics and milestones, and transparent for everyone in the organization, are very relevant to how I believe we can accelerate strategy execution through strategic relationships (Figure 1.3).11

3. Lack of a Strategic Relationship Development Plan I’m amazed at the number of annual strategic plans created by individuals, teams, and organizations across various industries. I agree with Gary Hamel, management consultant and London Business School professor, who 10

 Peter F. Drucker, The Practice of Management (New York: Elsevier, 1954): 109–110.

 Donald Sull and Charles Sull, “With Goals, FAST Beats Smart,” MIT Sloan Management Review, June 5, 2018, https://sloanreview.mit.edu/article/with-­ goals­fast-­beats-­smart/ 11

Networking = NOTworking

31

Definition

Benefits

Frequently discussed

Goals should be embedded in ongoing discussions to review progress, allocate resources, prioritize initiatives, and provide feedback.

• Provides guidance for key decisions. • Keeps employees focused on what matters most. • Links performance feedback to concrete goals. • Evaluates progress and course corrects.

Ambitious

Objectives should be difficult but not impossible to achieve.

• Boosts performance of individuals and teams. • Minimizes the risk of sandbagging. • Forces broader search for innovative ways to achieve goals.

Specific

Goals are translated into • Clarifies what employees are expected to concrete metrics and deliver. milestones that force • Helps identify what is not working and quickly clarity on how to achieve course corrects. each goal and measure • Boosts performance of individuals and teams. progress.

Transparent Goals and current performance should be made public for all employees to see.

• Makes use of peer pressure to perform on goals. • Shows employees how their activities support company goals. • Understands other teams' agendas. • Surfaces activities that are redundant or unaligned with strategy.

Figure 1.3  FAST Goals, Definition, and Benefits Source: Massachusetts Institute of Technology.

said: “Strategy doesn’t come from a calendar-­driven process; it isn’t the product of a systematic search for ways of earning above-­average profits; strategy comes from viewing the world in new ways. Strategy starts with an ability to think in new and unconventional ways.”12 Most plans that seek to implement a vision/direction focus on the what and how but not on the who. Who will be vital to this action? Who can be helpful? Without the who considerations, strategic plans are void of any concern for the relationships the plan will impact. Most individuals I’ve met over the past two decades seem to embrace a haphazard approach to planning, much less measuring their progress along a strategic relationship development continuum. Ask  Cited in Des Dearlove and Stuart Crainer,  What We Mean When We Talk about Strategy (Infinite Ideas, 2016), 10.

12

32

Relationship Economics

them how they plan to go from meeting someone to nurturing and sustaining a long-­ term, value-­ based relationship with that person, and you’re likely to get a grocery list of transactional steps. Those folks are, at best, guessing, utterly unsure of alternative paths or plans B, C, and D if plan A doesn’t work out. You can’t improve what you don’t measure. So if you keep attending networking functions, how are you measuring the results of that attendance? You constantly meet with the same group of individuals inside or outside the sponsoring organization. Are those investments producing any meaningful results regarding your goals and objectives? One of the fundamental reasons networking doesn’t work is that most people network without a plan. They are not systematic or disciplined about which events they attend, why they attend, what they try to achieve while there, and how they will follow through afterward. Quick review: the first critical three areas in which networking fails are purpose, goals, and plan (PGP). It’s vital to consistently think about why you are building relationships and how you will drive results well beyond any single interaction.

Interaction Phase In the interaction phase, different situations mandate different skills, knowledge of the circumstance, and rules of behavior to deliver effective relationship development. Networking is not simply a noble cause but rather an endeavor to create a competitive advantage. It cannot be left to chance. Here are common culprits in this phase.

4. Haphazard and Reactive Efforts Identifying, building, and nurturing relationships requires disciplined thought and action. Essentially, this needs to become dyed in the wool, a lasting characteristic, not just a patch to cover a spot. The dye permeates throughout the wool. In many ways, the dye defines wool as a critical attribute. A patch is just that—­a bandage, a fix, a transaction. When building relationships is part of your day, as opposed to a

Networking = NOTworking

33

panic-­stricken afterthought, “Oh, my gosh, who can I meet at this event who can help me with X?” it tends to become less of a burden. We boarded a flight home to Atlanta after I had delivered a keynote in Las Vegas. As some conference attendees passed, they were kind enough to compliment me on the innovation message I’d shared. The woman across the aisle said something similar to, “You seem popular.” Never at a loss for clever comebacks and judging her to be lighthearted, I jested, “You don’t know this, but I’m kind of a big deal!” She laughed out loud, and we spent the entire flight talking about our respective jobs. Monisha became a good friend, and I  learned over the subsequent years that she’s a marketing powerhouse, more recently supporting several Goldman Sachs portfolio companies as a fractional chief marketing officer (CMO). This tiny woman, just five feet tall, is a tremendous force beneath that unpretentious exterior beyond warm, kind, and thoughtful. She has a vast portfolio of relationships. Although she doesn’t need to work, she enjoys deep problem solving and complex decision-­making when the companies she chooses to work with are at a critical juncture. My questions are: How many people like Monisha sit next to you on planes or trains? How many do you ignore as you pass them? I get it—­talking to others on planes isn’t your thing. Or you don’t want to intrude. Or it has become easier for you to stand in the elevator without greeting anyone, even though you work for the same firm, only on different floors. How many prospective clients, employees, suppliers, worthy causes, and investors are you choosing to ignore? Think of the last networking event you attended. As some articles calling networking a waste of time point out, most people had no purpose for attending. However, the organization was getting together, so showing up seemed the safest thing to do. Furthermore, most had no idea who else would be at the event and so migrated to those they already knew rather than expanding to a broader contact base. Worse yet, most were running late from another have-­to event, so they could only grab a quick drink before the program started. Most attendees didn’t allow themselves to engage current and prospective acquaintances and left immediately afterward because they felt guilty for missing family time or had yet another have-­to.

34

Relationship Economics

If this describes you, why did you pay the fee, or join as a member, and take time to attend the event if you weren’t going to be more systematic and disciplined about it? Yearning for more small talk? Now, consider another approach to that same scenario. Groups generally plan and publicize events well in advance. Hence, you devise a master list of upcoming events and prioritize your attendance by which are most strategic to your desired outcomes. You prioritize the organizations most relevant to your personal and professional goals and objectives, based on your due diligence in conversations with trusted friends/mentors. You understand their formats and which are productive and offer quality content and community (two fundamental reasons why organizations gather). Finally, you pay and register in advance and protect the commitment on your calendar from possible conflicts. Two weeks to a month in advance, you research the speaker’s point of view and the subject-matter of the presentation or panel discussion so you can arm yourself with insightful perspectives and a handful of compelling questions. Next, you invite a handful of others who you think would appreciate this event. Most events have the attendees’ name badges at the registration table, and some even publish them on the website in advance. Having identified three to five people you’d like to meet or get to know better from a previous interaction, you arrive early and proactively seek them out. When you meet someone who is not as engaging or relevant to what you do, you politely disengage—­something most people can’t do very effectively! Time and intellect are your two most valuable assets; you can’t afford to waste either. You must be disciplined enough to move on if a conversation is not interesting or productive. Most people get little value from small talk. Instead, ask more interesting questions to engage, a strategy bound to make you stand out. I’d much rather attend an event and get to know four or five dynamic, intelligent, interesting people with whom I can follow up afterward than “work the room” and collect a handful of primarily irrelevant business cards. Let me save you the time and aggravation: you can get on LinkedIn and get the same value as the stack of business cards. But if you engage others in

Networking = NOTworking

35

meaningful discussions, carefully listen to the program content, and then have a systematic process to follow through with attendees afterward, you will have used your time much more effectively. Attending events becomes much more relevant if you have thought about your goals, strategies, and tactics in advance and are intentional about your presence. The other fundamental challenge here is the reactivity of most networkers. We see this when they are seeking another job. What do they do? They network like there’s no tomorrow. Their job becomes finding the next job. They ask everyone they meet, “Do you have a job opening? Do you know someone who has a job opening?” What typically happens when they find a job? I think we’ve all seen it. Most stop building those relationships and, worse yet, forget everyone who helped them get there until three years from now when they start calling or emailing again. And what do they want? That’s right—­the next job! By establishing this pattern, they build a reputation of calling when they want something versus staying in touch and nurturing critical relationships. The law of reciprocity is one of the most fundamental in human society, as the book says, “Without reciprocity, there is no relationship.”13 I’m often reminded of Harvey Mackay’s classic Dig Your Well before You’re Thirsty. You must build and nurture business relationships well before you need them. People are much less likely to respond and react if you call only when you want something; you should get in touch to find out how they are doing through this global pandemic and how you help them think and lead differently in the post-­ pan­ demic world. “I need to network,” sounds desperate. That’s reactive. Such speakers are job hunting, behind in their sales quota, scrambling to find prospects, or in trouble with their project deliverables. Success comes from being much more proactive. I liken proactive and consistent networking to playing chess. What I love about playing chess is that you must think several moves  Glenn Llopis, “Relationships Without Reciprocity Are No Relationships at All,” Forbes, February 29, 2016.

13

36

Relationship Economics

ahead to be successful. Great military leaders engage in situational analysis. “Where am I today, what am I trying to achieve, what happens if I make these efforts, and what’s next?” Investing in your relationships is also a constant situational analysis. It’s critical to think about relationships as investments, and, like any other investment, it’s imperative to evaluate your return. When it comes to relationships, think about ROI as your return on involvement. You belong to all these different organizations and attend all these functions. What do you have to show for all that?

5. What’s in It for Them? As I cover in later chapters, you must find ways to invest in others—­or make Relationship Currency Deposits. Find ways to become an asset to others and link your quantifiable value-­added to their efforts. Those who understand the value of a relationship will find a way to reciprocate—­ maybe not today, tomorrow, or even this year, but reciprocity is a natural and undisputable law in the favor economy. Unfortunately, many people overlook the critical nature of such reciprocity in favor of focusing solely on their situation. Most people you meet subconsciously think, “What’s in it for me?” Their hands are out when they meet others, both within and without their organizations. To the audience of this behavior, the interaction is repulsive. Conversational questions come across as an interrogation, and the person probing asks intimate questions about the information that people are uncomfortable sharing with someone they don’t know well (aka like or trust). Their comments come across as scripted or manufactured. They are, in essence, harvesting conversations. Contrast this approach with one that focuses entirely on investing in others to improve their condition dramatically. Take the time to understand the other person’s issues and challenges and give them a reason to want to get to know you better. If you add value to the relevant conversation with a unique perspective, the comment you often hear is, “Wow, I never thought of it that way.” And that response sets an expectation of continued interest for further conversation.

Networking = NOTworking

37

When I meet someone for the first time, I’m not gauging if we can do business together or if that person can help me. Instead, I ask myself, Does this person understand and value relationships? And, will there be reciprocation if I start by making a deposit—­by finding a way to become an asset in solving their challenges? Through the long-­established framework of social penetration theory (SPT), sociologists tell us that establishing relationships is a natural process of successive disclosures.14 You give me a little of you. I take it and make a judgment. If each listener, in turn, is satisfied or curious about the earlier revelation, the process continues. I then give you a little of me, you absorb it and make a judgment. Everyone has a comfortable pace for these exchanges. Too much, too fast, and the  other  finds you slick or untrustworthy. Too slow or too little in  the  conversation, and you’re found cold or indifferent. Knowing this, you see it’s critical to understand the other person’s comfort level in the early stages of relationship formation. Every job has its challenges. At the next internal or external networking event, start by asking people you meet about their roles, listen intently to their aspirations, and think about how you can become an asset to their efforts. Think about whom you know who can help them and how you can make an adequate deposit in this relationship. Share a contrarian perspective they may not have previously considered and aim to add value to every interaction. I follow a “three-­touch rule.” I will make three investments without expecting anything in return. Then, as I meet individuals who are looking for knowledge, talent, or an introduction to an influential person, I’ll go out of my way to bolster their success. The fundamental challenge is that we do not have enough bandwidth to invest in all our relationships equally. Famously, British anthropologist Robin Dunbar proposed that the maximum number of connections (including close and distant) each of us can realistically maintain is 150, but research

 Irwin Altman and Dalmas A. Taylor, Social Penetration: The Development of Interpersonal Relationships (Holt, Rinehart & Winston, 1973).

14

38

Relationship Economics

suggests that actively, proactively, and equally investing in these relationships could involve as many as 40 phone calls per day!15 Given our time constraints, you should determine the relationships in which you will invest to be congruent with your RelationshipCentric Goals and objectives and your definition of return on relationship investments.

6. Engaging the Wrong People Two of the best opportunities to expand your portfolio of relationships are internal company meetings (particularly if you work for a midsize or large organization) and industry conferences. In both instances, two aspects—­ content and community—­motivate most attendees. That is, (1) What insightful information can I learn or store for later use, and (2) Who of particular interest and value will be there? At the internal company meeting—­think of an annual sales kick-­ off meeting—­the attendees come from the far corners of the organization. Field sales professionals meet to review the previous year’s results, get updates on new products or services, and hear the expectations of them for the coming year. Corporate marketing, product or service line leaders, finance, tech development team colleagues, and even international or cross-­brand attendees are also there. I’ve spoken at new acquisition team members’ first global meetings. It’s an environment rich in relationship-­development opportunities. Likewise, it’s a fertile environment for expanding the diversity and quality of your business relationships. You can explore the latest market trends and competitive landscape at many industry conferences and hear from thought leaders. Even at events with great opportunities such as these, some attendees will not be relevant to your current role, responsibilities, or aspirations. The number-­one mistake people make here is to spend excessive time and effort talking to someone who is not  Pádraig Mac Carron, Kimmo Kaski, and Robin Dunbar, “Calling Dunbar’s Numbers,” Social Networks 47 (2016): 151–155.

15

Networking = NOTworking

39

relevant to what they are doing, which sidetracks their relationship development playbook. When I refer to the wrong people, I do not mean that some are less valuable than others. I am referring to relevancy. When you need to launder your best suit, the best coffee shop in the world is irrelevant. How relevant is this person to the goals and objectives that you seek to achieve? Please understand that this should not be construed as manipulative. It’s not about an elegant way of using people but about becoming more intelligent in how you invest your valuable time, efforts, and resources. You cannot afford to invest in every person equally. A best practice here is to identify influential hubs, subject-matter experts, or those highly connected who can consistently engage and influence others over a certain period. If you think of the classic bike wheel, they represent the hub in the middle with the many spokes fanning out from that position. Certain functional roles lend themselves naturally well to this concept. The best commercial real estate agents I know are very well connected in their communities to many possible direct client or referral sources. The best attorneys, accountants, insurance agents, recruiters, nonprofit fundraisers, lobbyists, and industry consultants are often excellent hubs because of the diversity of friendships they have built over the years. You may have heard the maxim: it’s not what you know but who you know that matters. But, as one venture-­ capital-­seeking entrepreneur put it, “by the time you have VCs and big angels, it doesn’t matter who you know anymore. It’s about who they know.”16 It is critical to your relationship-­building approach to identify those hubs and find ways to become an asset to them. Read this excerpt from The Tipping Point about entrepreneur and Broadway producer Roger Horchow (termed an individual who “collects people the way most people collect stamps”) describing at length how he obtained the rights to produce the George Gershwin musical Crazy for You:

 Mina Yoo,  The Ties That (Un) Bind: Social Networks and Entrepreneurship in High-­ Technology Industries (Ann Arbor: University of Michigan Press, 2003), 147.

16

40

Relationship Economics

I have a friend named Mickey Shannon, who lives in New York. He said I know you love Gershwin. I have met George Gershwin’s old girlfriend. Her name is Emily Paley. She was also the sister of Ira Gershwin’s wife, Lenore. She lives in the Village, and she has invited us to dinner. So anyway, I met Emily Paley, and I saw a picture Gershwin had painted of her. Her husband, Lou Paley wrote with Ira Gershwin and George Gershwin early on, when Ira Gershwin still called himself Arthur Francis. That was one link ... I had lunch with a fellow called Leopold Gadowsky, who is the son of Frances Gershwin, George Gershwin’s sister. She married a composer named Gadowsky. Arthur Gershwin’s son was also there. His name is Mark Gershwin. So they said—­well, why should we let you have the rights to Girl Crazy? Who are you? You’ve never been in the theater. So then I started pulling out my coincidences. Your aunt, Emily Paley. I went to her house. The picture with her in the red shawl—­you’ve seen that picture? I pulled out all the little links. Then we all went to Hollywood, and we went over to Mrs. Gershwin’s house, and I said, I’m so happy to meet you. I knew your sister. I loved your husband’s work. Oh, and then I pulled out my Los Angeles friend. When I was at Neiman Marcus, a lady wrote a cookbook. Her name was Mildred Knopf. Her husband was Edwin Knopf, the movie producer. He did Audrey Hepburn’s stuff. His brother was the publisher. We introduced her cookbook in Dallas, and Mildred became a good friend. We just loved her, and when I was in L.A. I would call on her. I always keep up with people. Well, it turns out Edwin Knopf was George Gershwin’s closest friend. They had Gershwin’s pictures all over their house. He was with Gershwin when he wrote “Rhapsody in Blue” in Asheville, North Carolina. Mr. Knopf died. But Mildred’s still living. She’s ninety-­ eight now. So when I went to see Lee Gershwin, we mentioned that we had just been to see Mildred Knopf. She said—­You know her? Oh, why haven’t we met before? She gave us the rights immediately.17 17

 Malcolm Gladwell, The Tipping Point (Boston: Little Brown, 2000), 43–44.

Networking = NOTworking

41

Remember that one of the fastest ways to turn off a hub is to go to that person and say, “What can you do for me?” Although these hubs are typically genuine and go out of their way to help people, you will quickly brand yourself a Taker by approaching them in this way. What is critical to hubs or any relationship development effort is that you genuinely invest time, effort, and resources in advancing the achievements of others.

Follow-­Through Phase Systematic, disciplined thought and action will drive recognition during the follow-­through phase. For example, suppose you believe in the premise that most people genuinely want to help. In that case, it becomes incumbent upon you to not just follow up (transactional) but follow through (transformational) on the initial success in meeting and engaging interesting, relevant contacts.

7. Failing to Arm Others with the Right Ammunition When people say, “Networking doesn’t work,” they usually cite evidence that they have invested in others in the past without any reciprocity. When I inquire, “How did you arm them with the appropriate context to introduce or recommend you?” the answer is often a blank stare. I recently received a LinkedIn message to this effect: “David, this is Steve Blank, a friend of John Nobody (whose profile I had to look up; we were not connected, and, when I found him, I was reminded of why I had removed the connection! ). I was wondering if you could click on my calendar link and schedule an hour to let me pick your brain on becoming a successful consultant, an author, and a professional speaker. John tells me that you’ve become an overnight success.” You can’t make this stuff up! I continue to wonder what people think when they send these messages. What in that outreach could propel me to act? I often try to take the high road; I scheduled a Zoom meeting as intrusive and

42

Relationship Economics

completely impersonal as his note was. When I inquired about his background, he shared that he was most recently a VP of sales: “I’ve been selling for 40-­plus years and can’t possibly imagine a company out there I couldn’t help.” I asked him about possible target industries, size, or types of companies, and relevant background and applicable strengths. With each inquiry, I felt he was making me draw this information out of him. The 30-­minute meeting was excruciating due to his lack of self-­awareness. Furthermore, he never asked questions about my current role or future aspirations. That highlighted his lack of investment interest in our relationship. I couldn’t help him in the manner that he had hoped. He  wanted the benefits relationships can provide without having to invest in those same relationships! We can easily distinguish between this completely me-­centric approach, looking for a handout versus trying to figure out a way to satisfy another’s needs and wants. If you invest time, effort, and resources to get to know others, understand their business, and learn about their challenges, you can uncover ways to help them. And when you do, their logical response will be: How can I help you? That’s when you can tell them that you are in transition and looking for a VP of sales position. But making that investment in others upfront is critical, and, regrettably, many people skip or rush past it! Doug Hertz is the CEO and chairman of United Distributors, Inc. Years ago, wanting to volunteer for a cancer-­related cause, he became involved with Camp Sunshine, a summer camp for kids with cancer. With no consistent location for camping every year, several similar organizations were competing for weeks during the summer at various spots. He had a question: Why couldn’t these organizations get together and share a location, one specially designed for kids with special medical needs, and then select specific weeks of the summer to serve as hosts? The kids could be with peers facing similar challenges, and their parents would have a respite as well, a break from worrying about their child’s health and happiness. What began as seven organizations coordinating to serve 800 children 20 years ago has become three sites, over 60 programs, serving tens of thousands of children and young adults annually. How?

Networking = NOTworking

43

Doug leveraged his vast portfolio of relationships, asked a lot of questions about a journey he knew nothing about, got a lot of help from his Leadership Atlanta class, and armed highly influential Atlanta business leaders with the ammunition to get behind a fantastic cause and make a real difference in the lives of all the families Camp Twin Lakes would touch. As a result, Georgia Pacific deeded the organization a 120-­acre piece of land an hour outside Atlanta. Several competing construction companies collaborated to build a magnificent physical plant—­a legacy for Doug and his relationships.18 Arm people with the information they need to help you. Don’t make them guess. Don’t add to their already overflowing plate of priorities. Instead, succinctly share a game plan that outlines the critical content, questions, or recommended next steps to accelerate your progress.

8. No Ideal Relationship Profile or Relational On-­Ramp Most people know that meaningful and strategic relationships require an investment. But, unfortunately, they’re not willing to do the difficult work necessary. So think of a due diligence process like any other significant investment you make, such as a spouse/life partner, a home, or a retirement account. Two key areas are critical in your relational due diligence: 1. An Ideal Relationship Profile (IRP)—­This is your relationship investment thesis; and 2. Several authentic Relational On-ramps—­Because relationships are often limited-­ access, you need viable paths to enter, engage, and influence a specified part of their ecosystem The IRP should help you succinctly answer questions such as: Why do you believe this contact is viable for you to invest in? Why would she or he share confidential information, offer access to 18

 “About Us,” Camp Twin Lakes Website, https://camptwinlakes.org/about-­us/.

44

Relationship Economics

professional relationships, or invest in you with only a limited time? If you begin each strategic relationship outreach with an IRP, you dramatically improve your long-­term viability and success in working with this contact and look forward to each future value creation opportunity together. The right IRPs allow you to make time for the connections, prioritize returning their calls and emails, respond positively and proactively to requests for help in ideation, formulation, or execution, and genuinely benefit from the mutual exchange of value. This process should also help you become aware of circumstances that would create risk in your continued interactions. Remember that IRPs are more than just people’s role / realm of responsibilities, demographics, how much of what they’ll buy at what margins, their project approval process, and so on. IRPs are a deeper dive into their likes, dislikes, habits, and prejudices. It’s understanding the communication style and channels, inner circle of influence (To whom does she listen? Who listens to him?), and how to translate your interactions into perceived and received impact. Once you create an IRP, you’ll need access to a specified part of their ecosystem—­what topics in their chosen field are they particularly passionate about? In their last podcast or media interview, did they highlight a unique initiative or respond to a market disruption in a meaningful way? The abundance of available information can help you profile individuals who could be instrumental to your success. Do your homework to prepare for an insightful interaction with intelligent remarks about the company, its vision or direction, and key industry trends. Beyond basic profile information, I’m particularly interested in individuals’ perspectives, insights into their challenges and opportunities, and critical attributes, which I refer to as Relational On-ramps. Strategic relationships are like limited-­access highways with on-­and off-­ramps. Access to those people is limited, not only in number but also in content. To succeed, you need to understand answers to questions such as: What key trends have they observed through the global pandemic to help them think or lead differently? What company, industry, or market challenges or opportunities have they shared that you can address relevantly? Are their values articulated somewhere

Networking = NOTworking

45

online? If so, are they aligned with yours? What causes passionately inspire them, as Doug Hertz was inspired, to make a difference? We’re impressed when we meet people who invest the time and effort to research such facts and use them smoothly in effective outreach. Being authentic is critical because the minute you stop being authentic, others will see right through you. Your intelligence gathering should never be a means to manipulate, deceive, or otherwise bait-­ and-­switch a contact. Instead, it should help you uncover a common thread to engage, add value, or improve their condition. If you don’t invest in an IRP or a relational on-ramp, you’ll likely never get to meet an invaluable person who becomes a strategic relationship in your life or you’ll have some of the shortest interactions imaginable as you’ll get filtered out.

9. Lacking Relationship Insight Validation Another common mistake in most people’s relationship-­ building efforts is failure to check the assumptions critical to their success. Years ago, I created a process I call strategic relationship triangulation. For any person or piece

Figure 1.4  Strategic Relationship Triangulation

46

Relationship Economics

of information vital to your success, you need three independent sources to verify (Is this, in fact, the right person to engage?), validate (Are these the correct facts and figures?), or void (Your project is not a priority this fiscal year!) the critical assumptions and assertions you’re making about that person or information (Figure 1.4). Triangulation should help you answer questions such as: Is this person responsible for the outcomes/success of this project? Is this person back to in-­person meetings or still in virtual visits? In the pre-­ pandemic world, you’d hear nightmare stories of people flying to a meeting in New York only to find that the person they were supposed to meet had recently changed jobs and was now utterly irrelevant to the critical opportunities at hand. This triangulation approach helps you focus on crucial individual realms of responsibility. For example, what is this person’s real clout? What projects is this person really involved in? How many people are on their team? If this relationship is important to you, it is critical to do some research to find trusted sources that this individual works with. Hundreds of thousands of new products are created every year. But have you ever wondered why some make it onto the shelves of top retailers while others are relegated to other channels? According to buyers at two of the biggest retailers in the United States—­Walgreens and CVS—­it’s not uncommon to receive 400 to 500 unsolicited emails per day and hundreds of product samples, most of which are trashed.19 The key to getting in front of the buyer is a trusted insider or a relationship broker: someone who works with the buyers, knows you, and is willing to connect the dots. Triangulation can help you identify the influential sources in a team, a department, an organization, or an industry. For example, who are the critical organization or industry advisers? Who works with decision makers, and in what capacity? How can you become an asset  Karen Tiber Leland, “6 Steps to Get Your Product on the Shelves of Big Retailers (Like Walgreens, Whole Foods, and CVS),” Inc., https://www.inc.com/karen-­tiber-­ leland/want-­to-­pitch-­a-­product-­to-­retailers-­like-­cvs-­whole-­foods-­or-­walgreens-­ heres-­how-­to-­get-­it-­on-­shelves.html

19

Networking = NOTworking

47

to them? Knowing this lets you customize your approach and add value more effectively to the person with whom you seek to foster a mutually beneficial relationship.

10. Givers, Takers, and Investors Over the years, I’ve observed three types of networkers: Givers (God bless Mother Teresa), Takers (we’ve all known some), and Investors. Which one are you? If I asked your colleagues, customers, suppliers, superiors, subordinates, and industry contacts, what would they say you are? Some people reach out only when they want something. These are Takers. They have a very me-­centric approach to networking. What they form can’t be called relationships because their network and contacts are made solely for their benefit—­and only their benefit. They call you for an urgent task and expect you to drop everything else you’re doing to serve their immediate needs. They see you periodically in the market, exchange less than genuine pleasantries, and reiterate, “Let’s catch up,” often meaning “Let me suck out of you all the information I need about what you’re doing and what I can replicate from your efforts to improve my situation and offer no value in return.” You must deal with these people cordially, but at a distance. Be polite, but guard your valuable assets—­ knowledge, talent, insights, and most importantly, other beneficial relationships. Unfortunately, this type of behavior seldom improves. The altruistic Givers are likewise challenged. Don’t get me wrong; there is a certain nobility in being the Mother Teresa of relationship giving. All this crowd does is give. Constantly doing for others drives them, but they become sheepish when they need help. They go out of their way to help people with important projects, often neglecting their own needs, desires, or deadlines. They’re often perceived to be incredibly sweet, kind, and giving. There is absolutely nothing wrong with any of these attributes. Unfortunately, they become an open door for many to take advantage of this kindness. Gretchen Rubin calls these people Obligers: by giving too much of themselves, they end up with too much on their plate, so their own

48

Relationship Economics

priorities and needs are pushed to the back burner.20 When engaging a Giver, you must ensure that you don’t become a Taker! Always be gracious, thank them for their generosity, and consistently offer to add value to their efforts; for example, constantly ask, “What can I do to help you?” They may never accept your offer, but it’s incumbent upon you to keep the balance in a Giver relationship. It is critical to point out here that we are not talking about keeping score. But as with most things in life, too much of either—­taking or giving—­will fail to produce the desired outcomes. So instead, you must find a reasonable middle ground to form personal connections. The professional balance is a Relationship Investor. This type of person understands that you must start by giving. Then, you must invest to get a return on that investment. Long before a need to capitalize or monetize relationships, an investor has accumulated a great deal of social capital through developing a solid relationship bank. This person’s name alone creates a sense of obligation to deliver value. These are people you would bend over backward to help, not only because they have gone out of their way to help you in the past, but also because, whenever you need help, they embrace you with open arms. No one has enough resources to invest equally in every relationship, so you must prioritize your relationships and decide in which ones to invest more. Of course, you should always be cordial and gracious in meeting and engaging others. But you also must ensure they understand that authentic relationships are reciprocal, and investments in building and nurturing relationships must be realized as a value-­ added item at some time.

Corporate Relationship Deficit Disorder Business relationships are formed in a variety of contexts. One of the misconceptions of business relationships is that they are purely 20  Gretchen Rubin, The Four Tendencies: The Indispensable Personality Profiles That Reveal How to Make Your Life Better (and Other People’s Lives Better, Too) (New  York: Harmony, 2017).

Networking = NOTworking

49

an external asset or liability. As we learned during the global pandemic, intracompany relationships deserve a dramatically elevated focus. Companies, regardless of size or industry, and despite efforts to the contrary by their leadership, tend to build geographic, functional, and project-­based silos. Those silos will compete for the mind share and wallet share of the corporate headquarters and often create divides within the organization. In addition, most corporations’ functions are forced to compete for resources. Doesn’t that create fun­ctional silos? Similarly, if key initiatives tend to be organized by cross-­ geography and cross-­functional projects, isn’t each project team competing for access, influence, and resources? As such, aren’t project-­based silos not only created but also nurtured in time? Due to their structure, performance expectations, measurements, and rewards, many corporations are not conducive to collaboration and not constructed for communication. What suffers most are the intracompany relationships. If it’s broken inside the organization, external relationships such as customers, partners, investors, and the media, for example, will also take notice.

50

Relationship Economics

Chapter One Summary • There’s a right and a wrong way to network. Networking myopically to build an extensive Rolodex is a waste of everyone’s time and effort. Only networking with intent, purpose, and discipline has the power to open doors and drive success. • While networking can yield personal returns, it rarely does so unless you, too, are prepared to be an asset to your contacts. Therefore, you should actively invest in new and old relationships as a core part of your relationship-­build­ing strategy. • When networking, spend more time asking questions and less giving opinions. • You do not have the time and resources to cultivate all relationships equally. Instead, identify relationships relevant to your personal and professional goals and prioritize your investments accordingly. • Relational hubs should be a significant focus of your networking activities.

Chapter 2

Growth and Business Relationships

A

t the onset of the pandemic, from my contacts, I made a list of my top 100 business relationships: respected, trusted, influential leaders who would return my calls and emails within 24 hours. I’ve learned over the years that highly talented knowledge workers know lots of facts; they use a great deal of information to do their work and deliver results. But, beyond the information you access, synthesize, analyze, and share, much of your success will come from connecting to, nurturing relationships with, and leveraging other people. One of my favorite relationship-­centric exercises with any team is to ask them to graph their success to date. Use the horizontal x-­axis to track time—­teens, twenties, thirties, and so on—­and the vertical y-­axis to plot however you define success (Figure 2.1).

Figure  2.1  Is my success journey to date. Hoping yours will look different, I have a few questions.

51

52

Relationship Economics

First, how did you define success? For many, it’s graduating from college, that first job, the first promotion, getting married, having children, and so forth. They subconsciously categorize key milestones as buckets in their lives—­I made more money with this job, I moved to where we live some 20 years ago, or I had children. I submit that it’s our personal and professional growth. Graduation, new jobs, career progressions, and even watching children develop often are incredible sources of joy—­but they’re also amazing lessons in shaping who we become. Second, in your setbacks, what lessons have you really learned? What impact did your own decisions make in creating those low points? Did you take a job with a startup for the founder’s vision and the inflated compensation package, only to have it go out of business six months later? Did you volunteer to lead a project that failed and painted you as the cause of that failure? Our lessons often come from our lowest points. What mistakes did you learn and grow from? What key attributes led to your recovery from an apparent abyss? What strategies did you apply to overcome gross debt, the loss of a loved one, or termination from that job? Concentrate upon the key drivers of your success after a low point so that you can call upon them to develop your resiliency and foresight in the challenges ahead. Beyond any transactional project, initiative, or momentary priority, which critical relationships along the way facilitated your per­ sonal or professional growth? Who was the first manager to take you under their wing and teach you this business? Who was that sales or project manager genuinely interested in your growth and development? Who were the formal or, more likely, informal mentors who helped you navigate the unforgiving sea of corporate politics, bureaucracy, strategies, tactics, business unit structures, new leadership, and organizational changes? I believe we’re all products of the advice we take! Which strategic relationships have helped shape the person you are today? Which had the most significant impact on your graph? And whose graph are you  affecting? Who’s under your wings where you’re teaching them more than just products or services, but rather how to become more



Growth and Business Relationships

53

empathetic teammates, more compassionate servant leaders, and better human beings?

Organizational Growth in the Post-­Pandemic Economy The pandemic has enormously affected the way companies do business. A recent survey of some 4,000 Americans found that almost half of their employers had made cutbacks due to the pandemic—­which is not much of a surprise.1 What was surprising, however, is that many of those firms withstood the worst of the pandemic, and some flourished. The difference between those that dwindled, those that survived, and those that were thriving is that these last had continually invested in their people, infrastructure, and relationships, which left them agile, enabling them to adapt quickly in the face of a crisis. I’ve never met an organization that could cut its way to growth. During the pandemic, leaders who had made prudent investments in talent, supply chain infrastructure, digital transformation, and strategic internal and external relationships found considerably stronger market positions than their competitors. Redefined customer expectations, vulnerable supply chains, and new ways of working are driving a renewed sense of adaptation and growth in the post-­pandemic economy. As mentioned in the previous chapter, three fundamental growth attributes create a recognizable difference—­among your peers, across diverse teams, and from industry competitors. 1. Trajectory of Growth—­ How much growth (rise) over time (run)? 2. Speed of Growth—­How fast did you get there, and is that growth sustainable? 3. Efficiency of Growth—­How many resources (time, effort, and capital) did you expend to deliver that growth, profitability, or the return on investment (ROI) of that growth?  Eric Van Susteren, “The Key to Successfully Navigating Crises: An Agile Organi­ zation and a Healthy Dose of Curiosity,” SurveyMonkey, April 2021, https://www .surveymonkey.com/curiosity/the-­key-­to-­successfully-­navigating-­crises/

1

54

Relationship Economics

Strategic relationships accelerate all three, and, in this section, I want to focus on how you can become more intentional in your regular contacts and what it takes to nurture and sustain those relationships along a continuum to personal and organizational growth. Most organizations understand hard assets such as inventory and real estate, and often characterize them as a barometer for measuring their company’s financial stability and leverage. Soft assets are characterized as intangible and nebulous. In recent years, savvy organizations have identified and accounted for their value. They include such line items as brand equity, human capital, and strategic relationships, perhaps identified as alliances, joint ventures, or long-­term customer or supplier contracts.2 Although they may not appear in most financial reports, they are proving to be unique, sustainable competitive differentiators and a particular barrier to entry for others. In 2019, if you had asked most leaders what had the most significant potential for disrupting their business, they’d likely have listed AI, startup competitors, or geopolitics. COVID-­19 drastically shifted their priorities from establishing consistent customer experience and aligning performance management to business strategy to amplifying digital marketing efforts and leveraging data analytics for more robust and faster decision making. In the post-­pandemic world, resilience, continuity, adaptation to new circumstances, and greater speed of seizing new business opportunities are reframing the future of the business. Let’s inspect each of the growth attributes through a set of five post-­pandemic strategic priorities I’m hearing in conversations with global CEOs and founders of private companies: Priority #1—­Aligning Resources to Objectives. According to government tallies,3 by June 2020, just six months into the pandemic, more than 200,000 companies across the United States had folded. Yet, applications for new businesses  Gary Cokins and Nick Shepherd, “The Power of Intangibles,” Strategic Finance, May 1, 2017, https://sfmagazine.com/post-­entry/may-­2017-­the-­power-­of-­intangibles/ 2

 Emily Barone, “The Pandemic Forced Thousands of Businesses to Close: But New Ones Are Launching at Breakneck Speed, Time, July 22, 2021. 3



Growth and Business Relationships

55

jumped to the highest rate in the 17 years that the government has collated this data. How can we make sense of these figures? Most organizations that survived or started anew fall broadly into one of two groups: 1. Those who were hit hard by the global crisis and forced to restructure or downsize; and 2. Those who adapted to new business models reshaped their needs for resources, capabilities, and relationships. In both groups, digital skill sets and relational competencies have become far more critical than they were or seemed to be. Priority #2—­ Integrate Strategic Relationships into the Corporate Strategy. The pandemic clarified that resilience is critical to sustainable growth. As a result, every growth-­ minded leader today has become passionately focused on their digital transformation, as it resonates with a broad array of stakeholders, deepens the organization’s current value proposition, improves customer acquisition and retention measures, and minimizes the organization’s exposure to the next potential disruption. Putting people and the relationships they value at the heart of the business has gained prominence in the hearts and minds of leaders in their post-­pandemic growth strategies. Putting strategic relationships at the center renews an emphasis on building a purpose-­driven organization, doubling down on retaining and developing exceptional and highly diverse talent in critical roles, adopting more flexible and autonomous work models, enhancing agility, and creating a culture of experimentation. More leaders are visibly rewarding iteration (efforts to do pre-­pandemic work better) and real innovation (doing new things). In addition, I see them developing apparent capability depth and management succession plans within key strategic initiatives. Priority #3—­ Accelerated Product, Service, and Business Model Innovation. WFX (Working from Anywhere, where

56

Relationship Economics

X marks the spot) has dramatically increased customer expectations via online interactions, influence, and buying, making the role of digital relationships more critical than ever. Indeed, according to a recent survey, 84 percent of managers at customer contact centers said that the pandemic has permanently amplified the importance of customer service.4 Rapidly evolving customer needs force more leaders to review and adjust their product and service portfolios and business models for more innovative and sustainable go-­to-­market strategies. For example, cosmetic companies switched to cleaning and hand sanitizing products; fashion companies introduced branded face masks; Ford and Dyson converted their manufacturing lines to produce ventilators. Even Bauer, the New Hampshire–based hockey company, shifted to making face shields for medical workers5—­see the agile alignment example in Figure 2.2.

Figure  2.2  Agile Alignment by Bauer to Pivot from Hockey Equip­ ment to PPEs 4  Tom Goodmanson, “The Upside of Change: A Bright Future of Remote Work,” Forbes, October 12, 2020. 5   Adam Kimelman, “Bauer Making Face Shields for Medical Workers Treating Coronavirus,” NHL.com, https://www.nhl.com/news/bauer-­shields-­medical-­workers-­ coronavirus/c-­316289722



Growth and Business Relationships

57

While some maneuvers were temporary and savvy in meeting short-­term market demands, others represent a fundamental shift in market demands. For example, I’m unsure how popular touch screens in ATMs, fast-­ food ordering, and airline kiosks will be if consumers now see shared surfaces as an infection risk. Will we still shake hands or use physical lock keys? Alternatively, entire industries, such as health care, have accelerated the use of telehealth, while retail and food industries leverage self-­service and QR codes. The challenge for most leaders will be determining which product/service/business model innovations are necessary to remain relevant. Priority #4—­ Actionable and Real-­ Time Data Insights. Someone recently defined data as “the new renewable energy.” Although improved data analytics was a pre-­ pandemic priority for many, the sense of urgency and perceived impact of real-­time insights drastically elevated the role of actionable data during the pandemic’s daily leadership huddles. Customer expectations are forcing the prioritization of predictive and real-­time data analytics to identify shifts in customer buying patterns, behaviors, satisfaction, and up-­, cross-­, and re-­sell opportunities early and accurately. The C-­suite and board agenda is now inadequate without leading drivers of impending change, such as sentiment analysis or social interactions, in a highly dynamic market, and not just lagging indicators such as key performance indicators (KPIs) from the last quarter. Priority #5—­New and Unlikely Alliances. Earlier I referred to the value of strategic relationships within the organization and its corporate strategy. Successful leaders understand the network effect of their portfolio of strategic partners. These enablers of profitable growth often complement an organization’s value proposition, dramatically widen its market reach, create scale by meeting unforeseen customer needs, or improve revenue and profitability. The potential advantages of these strategic relationships are overcoming pre-­pandemic barriers of viability, relevance, and even fit in some of these alliances.

58

Relationship Economics

One fascinating example is Fetch Robotics, based in San Jose, California, which has always used partnerships to build autonomous robots for warehouses, factories, and distribution/logistics operations. CEO Melonee Wise spent the early months of the pandemic vetting new partners with the engineering prowess to deliver new solutions. The strategic relationships resulted in seven new partnerships to extend Fetch’s existing robotics assistants for hospitals into unique solutions such as The Breezy One to disinfect airports and planes and The Smart­GuardUV to clean surfaces with ultraviolet lighting in conference rooms after meetings.6 Relationship-­centric growth drivers can dramatically accelerate these priorities and help future-­ proof your business. .

Logarithmic Relational Growth You have heard, “You get out of it what you put into it.” We assume a positive correlation that for every unit of effort we put into a task, we get some unit of benefit back. The challenge is that relationships are not linear. Don’t misconstrue that—­effort, hustle, and investments are all essential. However, if you expect your relationships to follow a linear trajectory, you’ll waste time in frustration. Longitudinal data analysis plays a significant role in empirical research within relationship development skills, knowledge, and behavioral sciences. For example, with whom, the manner, frequency, exchange of value, and the continued development of trust, relevance, and competence all contribute to your relational growth curve. Anything in life you try to improve will involve a growth curve. So let’s use a relationship-­centric outcome like finding a new job or growing your business with new clients. If you reach out to five people every day and track your progress over time, you’d probably get a graph like the one in Figure 2.3.  Joel Mullich, “Survey Reveals That Most Business Leaders Think New Kinds of Business Partnerships Are Driving Innovation during the Pandemic,” Business Insider, November 27, 2020. 6



Growth and Business Relationships

59

Figure 2.3  Linear Growth of Your Relationships

Here, your progress is on a logarithmic scale. It becomes increasingly difficult to improve dramatically as you improve how you present yourself or your ideas. Olympians invest an enormous effort to reduce their times by hundredths of a second. The average athlete can shave minutes with a bit of practice. Similarly, seasoned business professionals with robust networks constantly nurture those relationships for small gains. Entry-­level professionals right out of college can consistently develop a vast network. The logarithmic scale is the first type of relational growth. You see a lot of progress at the beginning stages of building relationships, but continuing progress becomes more difficult as you get busy or begin to feel well connected.

Exponential Relational Growth Now imagine a different path forward. This time, you focus on an ideal relationship profile—­a smaller but more intentional community of like-­minded professionals with a shared mission, vision, or enemy (such as overregulation). As a result, this graph is more likely to look like the one in Figure 2.4.

60

Relationship Economics

Figure 2.4  Exponential Growth of Your Relationships

This example shows exponential growth because you’re focused on attracting, not just more, but a specific profile of relationships. You aim to build depth and relevancy, adding value to each interaction. You connect different nodes of your connections to one another—­your next-­door neighbor, the brilliant professor, to an entrepreneur passionate about his HealthTech startup. Your network, influence, and engagement levels expand with each relationship. Soon job opportunities or potential clients come to you via word of mouth and referrals or invitations to unique events, experiences, and inner circles. You also notice that the quality and depth of your relationships improve and become more attractive. Over the years, I’ve noticed that most relationship-­development efforts show either logarithmic or exponential growth, even though most people expect linear progress. We tend to believe a rate, trajectory, or growth slope consistent with the past. This false expectation leads to mistakes in how we think about our business relationships, set goals, and act on them.



Growth and Business Relationships

61

One early mistake in developing our network is overconfidence in long-­term progress. You assumed a straight-­line linear growth—­ that your network would just continue to grow in the same way it has in the past, it’s logarithmic, and you’ve hit a plateau. Your progress will slow down dramatically over time if the difficulty of creating new, productive, and value-­based relationships isn’t tuned to break your complacent rhythm. Logarithmic growth is easy to slide back down the hill as well. Skip a few monthly industry association meetings, and soon you’re forgotten. The steep climb in building a network at the outset means that neglect in feeding and caring for your network can quickly lose those early gains. Keeping weight off is easier for most dieters if they lose the weight more slowly through a healthy lifestyle than if they lose it quickly. Another challenge of seeing your relationship development progress as exponential, rather than the more common linear, comes from graphs of many personal and business phenomena: tech improvements (Moore’s law), most business growth, wealth over time, or rewards to talent or career progression. Nothing else is consistently exponential. No business reaches near-­infinite values because market share becomes saturated or competitors stabilize growth. The mistakes people make here are costly. They too often give up before reaching their full potential or the desired outcomes from their network. They become disheartened when, after several interviews, they still haven’t found the right job or, after some period of prospecting for new business, they can’t seem to win a client. Job searches and business development efforts are fraught with relational quitters. Many assume networking and relationship development is linear, and when they compare their actions to their results, they give up before the exponential curve delivers the fruit of their labor. A great way to learn about your relational growth curve’s trajectory, speed, and efficiency is to observe others who have done what you want. Who has consistently found great jobs or gained new client relationships? Don’t get distracted by details; just watch the shape of their

62

Relationship Economics

relational growth. Does it slow down with their mastery or speed up with continued prosperity? Exponential growth in a professional network often looks like extended periods of struggle with little to show for it, followed by quick success. The term we hear is “overnight successes”; ignored are years of obscure toil. Logarithmic growth in networks is often characterized by continuous dedication to remaining at a peak level. Fluent speakers of a second or third language will tell you that there is no magical spark, no moment when the language “just clicked!” It requires, instead, regular practicing and using the language. Moreover, logarithmic domains often present a diminishing return once the low-­hanging fruits are captured. The second-­place finisher of a new client proposal seldom earns a reward. You generate gains only when you learn from setbacks and missed opportunities and immediately apply those learnings with insights in the next chance. Which relational growth trajectory are you on? Of course, the answer lies in your growth mindset. But, first, you must decide which domain to build and nurture relationships within. In logarithmic relational domains, you must maintain consistent habits when starting in a high-­growth, steep-­climb phase. Diligent and timely follow-­through with your commitments is the foundation of trust here. Since the growth of your network is fast initially, you must ensure that you don’t do anything to slide back down the hill once you’ve made an effort to connect, engage, and influence others. As your network growth slows, you need to emphasize habit-­breaking. You have become complacent and must make a deliberate effort to break out of your comfort zone. In exponential relational domains, you need an endurance mindset (remember, many relationships are a marathon and not a sprint!) and resilience. Nurturing a relationship over months, maybe years, takes persistence and tenacity to overcome continual obstacles. Many entrepreneurs are consumed by their vision, this condition being a vital defense mechanism to block out the barrage of naysayers. This lasts until they reach exponential growth with paying customers, known more formally as market validation.



Growth and Business Relationships

63

Relationship Strategies of Organizational Growth Build on the logarithmic or exponential relational curves above to address the post-­pandemic organizational growth priorities. • Constantly assess relationship development capabilities relative to your aspirations • Seek insights into the relationship-­development practices of market-­leading professionals, their teams, and organizations • Clarify your strategic priorities, challenges, and opportunities, and align your most compelling business relationships paths to each • Validate and refine your business strategy through a diverse portfolio of relationships • Build an action plan to help you achieve increased resilience and sustainable personal and organizational growth • Seek to understand the future growth opportunities of your business and the path to get there My research into the profitable and sustained growth of leading global client organizations amid all kinds of market conditions has shown that ambitious professionals who aim to think and lead differently when it comes to their business relationships focus their efforts on seven relationship-­centric growth drivers: 1. Customer-­Centric Relationships. Regardless of your role or responsibilities, you will develop a very different competitive advantage if you become customer-­obsessed. This notion is far greater than understanding customer satisfaction, service, or experience. It’s fundamentally making customers the focal point of every relationship you build, nurture, and sustain. “How can I continuously and dramatically improve my customers’ lives and outcomes?” should be your guiding light, regardless of whether that customer is an external or an internal relationship.

64

Relationship Economics

2. Colleague-­Centric Relationships. If you’ve been lucky enough to work in an organization where you love going to work every day, you know that your colleagues make an enormous difference in your job satisfaction. Nurturing authentic, value-­ based relationships with your colleagues will enable your visibility, exceptionally professional and leadership brand development, and mobility up and across the organization, if not the industry. One fascinating example is the notion of Centers of Influence (COIs). These individuals influence the community that holds the organization’s ideal relationships. A network community is a group of people focused on a common interest. Getting to know and developing relationships with key people in targeted communities will provide more opportunities and value in your network than a handful of scattered contacts you may know. The more community influencers you nurture a relationship with, your network strengthens (Figure 2.5).

Figure 2.5  Centers of Influence

3. Technology-­Enabled Relationships. Every facet of our professional lives will soon involve transformative technology. These tools allow us to make quicker and better decisions, respond more rapidly to evolving customer needs,



Growth and Business Relationships

65

improve business performance, and prudently manage risk. Digital, mobile, data, cloud, blockchain, and AI profoundly impact business in every industry, presenting evolutionary challenges and opportunities. Suppose you embrace a digital mindset and look at every aspect of relationship-­building for tech-­enabling possibilities. In that case, you elevate customer interactions, explore new business models, identify convergence of industry sectors, and realize the full potential of your business relationships. 4. ONE Organizational Relationship. An organization’s operational model is the connective tissue between its strategic path forward and its clarity of intent. Recent years have seen an enormous upsurge in the decentralization of business processes. This trend is expected to grow in the post-­ pandemic era as more companies embrace remote work.7 Particularly in highly decentralized, divergent, disconnected, or otherwise disengaged structures, having a precise alignment between operations and strategy will dramatically increase an organization’s ability to succeed. I’ve used Operationally efficient, Needs-­based, and Exceed expectations as an acronym for ONE in several clients engagements in the past year. 5. Financially Astute Relationships. Budgets are seldom a financial issue but always a priority issue. The best economic approach to an organization’s growth in every state should be driven by its growth strategy. The relationships you invest in must be able to maximize the benefits of these internal and external relationships from the management of available financial resources. For example, a more strategic and commercial finance function, where the CFO is the economic advisor and provides critical insights to decision makers, consistently enables the organization to outperform its competitors. On the other hand, too much available capital diminishes its value and doesn’t create prudent spending 7  Konstantin Tsybulko, “How to Stay in Sync in a Decentralized Organizational Structure,” Forbes, October 21, 2020.

66

Relationship Economics

habits, discipline around product-­market fit, or relevant customer segmentation. 6. Inorganic Relationships. The most successful leaders I’ve worked with nurture slow and steady relationships. They realize that the evolution of their business seldom comes from organic growth alone. Instead, they seek partnerships, alliances, opportunities to co-­create, strategic acquisitions of broader capabilities, a deeper and richer pool of talent, and unique market insights to enhance their growth, competitiveness, and profitability. These new, inorganic relationships quickly grasp value creation in the post-­ pandemic markets. Astute professionals realize that strategic relationships are seldom about luck. Finding the right relationships comes from aligning expectations to the overall growth strategy early and often, developing a portfolio of relationship signal-­scouts to bring a consistent set of options, and pushing back when the relationship is not the right fit or perhaps the wrong time. 7. Risk Mature Relationships. The pandemic reminded us that volatility creates ripples—­little room for error but poor conditions for good judgment. Risk is a flinty balancing act beyond quantitative analysis. Finding equilibrium is often arduous, but strong risk management reduces business volatility. Through solid and consistent relationships, maturity in risk management is strongly correlated with top-­line and bottom-­ line growth, innovation, and lasting change. At every stage of a business’s development, your willingness and ability to identify and manage risk stands out as a vital element of success in your relationships. In many organizations, relationship development efforts are episodic, geographic-­, or role-­specific. Proactive and strategic relationship builders often accelerate their success. What’s not happening is the institutionalization of business relationships—­strategically thinking about, identifying, nurturing, and capitalizing on relationships across the organization.



Growth and Business Relationships

67

Professional services (think big four accounting, strategy consultants, and law firms) and some private wealth management firms have discovered that their organizational network effect is a unique, strategic asset and a sustainable differentiator. So how can you and your team connect, engage, and influence your corporate relationships more productively? First, let’s examine what relationship-­ centric high-­ performing teams think and do differently.

Relationship-­Centricity of Your Talent One challenge with the idea of relationships is that it’s seldom a stand-­ alone concept! Think about it—­relationships don’t make sense by themselves. Instead, they enable or enhance a more remarkable outcome. The impact most of our clients seek in their business, such as the post-­pandemic growth priorities mentioned earlier in this chapter, heavily depends on a change in behavior of their people—­a fundamental shift in how they think about, identify, and invest in relationships for an extraordinary return. Some individuals can transition from purely transactional interactions to transformational relationships—­ within and without the organization. Others, unfortunately, are unwilling or incapable. The process starts with how your organization attracts, develops, and retains qualified and relationship-­centric talent. And is the key because your socially inept employees may be some fantastic individual contributors if you hire for competency only, especially in visible roles. However, they’ll never realize their full potential without the ability to communicate, problem-­solve, or decide with and through others. Mark Parrinello is the chief revenue officer at SentinelOne, an autonomous cybersecurity firm, which had its public offering on June 30, 2021. Shares jumped 21 percent on opening day to close at $42.50, valuing the company at $10.9 billion, one of the most successful cybersecurity IPOs in history.8 Mark and his team grew the company’s  Beth Kindig, “SentinelOne: Excessive Valuation Overshadows a Stellar Product,” Forbes Consumer Tech, July 16, 2021. 8

68

Relationship Economics

revenues year-­over-­year by 100 percent for the fiscal year ending January 31, 2021, to $93.1 million. During our recent Sales Community’s Tech Sales Insights podcast with my co-­host Randy Seidl, I asked how they consistently outperform their closest competitor, CrowdStrike. His answer surprised me: “We hire great sales managers with strong Rolodexes! Good chance in a new territory, they’ll have to quickly build their teams, get them ramped up, and produce results via a short runway. If they have existing relationships with quality reps, they’ll be that much more successful, quickly,” Mark shared.9 In the previous editions of this book, I referenced Topgrading by Bradford D. Smart as a fantastic resource for the war for talent. The pandemic accelerated the Silver Tsunami—­an abundance of seasoned, often technical talent retiring faster than onboarding the new generation into many industries. Although remote work has broadened employers’ talent pools, larger talent pools don’t automatically make recruiting easier. The Great Resignation, perhaps more aptly termed, The Great Reconsideration, has arisen from the forced changes during the pandemic. Some of these changes improved workers’ lives while others laid bare their uncertainty. As a result, many knowledge workers are exploring alternative work options. Researchers at MIT’s Sloan School of Management found that ratings on corporate culture rose in the first six months of the pandemic to their highest levels between March and April 2020, as measured by employee-­written reviews on the job search and business review site, Glassdoor.10 The analysis of 1.4 million reviews of 500+ leading companies gave high marks to corporate leaders for honest and transparent communications. What’s more, researchers found employees’ mentions of top leaders’ communication were twice as likely to be in favorable terms. Employees also praised their leaders’ and organizations’ integrity in addressing the pandemic, including fair treatment of employees. 9  “How to Build The Highest-­Valued Cybersecurity IPO Ever,” Sales Community Tech Sales Insights Livestream, August 25, 2021, https://www.salescommunity.com/ tech-­sales-­insights

 Donald Sull, Charles Sull, and Andrew Chamberlain, “Measuring Culture in Lead­ ing Companies,” MIT SMR/Glassdoor Culture 500, June 2019, https://www.glassdoor.com/research/app/uploads/sites/2/2019/06/Measuring-­Culture-­Final-­2.pdf

10



Growth and Business Relationships

69

Yet, this speaks to the crisis response and not to what longer-­term changes the pandemic may prompt to organizational culture. Chicago Proactive Response, a group of companies mobilizing to design tech solutions that support the fight against COVID-­ 19, recently gathered a group of 50 executives to discuss their adjustments to internal cultures to support workplace changes.11 They addressed five key areas: 1. Communication. Increased communication was the common message from these executives who sought to promote transparency while keeping employees up to date. 2. Collaboration. Major innovation factories such as Google, Apple, and Pixar designed their headquarters to encourage casual interaction among varied departments to promote “serendipitous collaboration.” A distributed workforce requires a different approach to collaborative and spontaneous interactions. 3. Mental Health. The pandemic has blurred the lines between work and home, with the dining table often serving as the conference table. This “always-­on” existence adds to personal and work-­related stress. Organizations are responding to help employees adapt to this evolving reality by boosting support benefits, promoting mental-­health breaks during the workday, and encouraging employees to discuss coping challenges openly. Other changes are to the definition of professional behavior, from video-­conference interactions with co-­workers’ children and pets to more casual work attire. Family happy hours, “Pajama Mondays,” and “Slob Chic” pandemic fashion are rewriting work rules. 4. Equity between At-Home and At-Office Workforces. As employers reopen their offices, they are keen to reasonably manage on-­ site and distributed workforces. However,   Betsy Siegler, Steven Collens, and Haven Allen, “Workplace Culture Meets COVID-­ 19: Lessons from Cross-­ Industry Leaders,” MATTER, August 12, 2020, https://matter.health/posts/workplace-­c ulture-­m eets-­c ovid-­1 9-­l essons-­f rom­cross-­industry-­leaders/

11

70

Relationship Economics

whether it is access to information or straightforward communications, the WFH employees can struggle to execute their responsibilities. Employers acknowledge this difference and ensure all employees are treated equally. 5. Location, Location, Location. Regions no longer limit the talent pipeline. A distributed workforce expands the labor pool nationally, perhaps even globally. The lack of geographic constraints is quickly redefining the traditional employment contract. Salary and benefits could be disrupted significantly. How are collaboration and camaraderie impacted when employees doing the same work are paid differently depending on the cost of living in their location? How is culture changed when co-­workers live in different time zones or countries?

Relationship-­Centric Blueprint for High-­ Performing Teams The pandemic thoroughly tested every organization’s strategic resilience. As a result, many leaders had rude awakenings as their competitive advantage weakened while others, the “antifragile” organizations, Nassim Taleb’s term for entities that became stronger when stressed, thrived with their technologies, strong brands, and breadth, depth, and relevance of their relationships. Business model innovation emerged as a critical differentiator. According to a McKinsey & Company survey of 300 senior executives in hard-­hit Europe, those who said their companies thrived amid the pandemic were 1.5 times more likely to have embraced a business model innovation.12 Their results came from five focused areas: 1. New digital experiences, products, and services respond to customer behaviors and need changes.  For example, many sports and entertainment venues moved to fully digital experiences,   Dago Diedrich, Nicholas Northcote, Tido Röder, and Karolina Sauer-­ Sidor, “Strategic Resilience during the Covid-­19 Crisis,” McKinsey & Company, March 2, 2021, https://www.mckinsey.com/business-­functions/strategy-­and-­corporate-­finance/ our-­insights/strategic-­resilience-­during-­the-­covid-­19-­crisis

12



Growth and Business Relationships

71

while a tech provider launched on-­demand fitness offerings to capitalize on the category’s surging popularity. 2. New partnerships, within and outside the industry. An insurance group partnered with a connectivity provider to set up a virtual clinic, and pharmaceutical companies teamed up directly with health-­care centers to accelerate vaccine development. Meanwhile, sports leagues banded with software companies to create virtual-­reality experiences for sports enthusiasts. 3. Supply-­ chain and operating-­ model adjustments to manage risk. Companies aimed to balance the need for just-­in-­time delivery with protection against delays or shutdowns by securing alternative sources of supply and continued work. Contact centers, for example, moved to remote operations or split teams into cohorts that could isolate in case of infection, allowing others to continue working. 4. Sales-­model changes.  Many businesses adapted how they marketed and sold their offerings, from logistics companies introducing contactless delivery to restaurants shifting to home delivery and pick-­ up orders. Business-­ to-­ business sales likewise primarily undertook remote and digital models. 5. Faster product development through more rapid iteration.Tele­ com companies, working with insurers and health-­care providers, quickly responded to the pandemic by creating telemedicine applications to assist in remote COVID-­19 testing and diagnosis. Meanwhile, a consumer-­ packaging player transformed its product development and trial process into an immersive virtual experience. Each of these examples has a connective tissue: Anthony Nyberg reported that high-­performing employees have a 40 to 80 percent greater positive impact on firm performance, agility, adaptability, and antifragility than average employees.13 The “secret ingredient” to how high-­performing employees and teams thrive in dynamic and competitive markets is not a secret to this book’s readers. Their communication  Anthony Nyberg, “Retaining Your High Performers: Moderators of the Perfor­ mance–Job Satisfaction–Voluntary Turnover Relationship,” Journal of Applied Psy­ chology 95, no. 3 (2010): 440–450.

13

72

Relationship Economics

is frequent and high quality; their collaboration is efficient and effective. Their problem solving, decision making, and support for one another, their relationship-­centricity consistently sets them apart. In our Relationship-­ Centric Blueprint for High-­ Performing Teams, Figure 2.6, there are three categories: 1. Individual competencies (self-­ motivating and self-correcting), 2. Team dynamics (competent and credible), and 3. The relationship-centric organization (decentralized and adaptive).

Figure  2.6  Relationship-­ Centric Blueprint for High-­ Performing Teams



Growth and Business Relationships

73

As the pace of change continues to accelerate, organizations that nurture fast, bold moves will likely create a material gain against their competitors. To keep pace, your strategic planning process must be highly flexible to correct as the organization, the industry, and the market at large continue to deal with high uncertainty and disruptive forces. A relationship-­ centric culture gives you four unique ways to  become more strategically resilient and to future-­ proof your organization: 1. Set bold individual, team, and organizational aspirations. My greatest fear is that we will learn nothing from this pandemic and “go back to normal”! (1) There is no going back, and, more importantly, (2) the economic disruption should be viewed as an impetus to think and lead differently. Exploring new business models requires relational courage to set bold personal and team growth goals, previously dubbed unrealistic, and bold organizational goals to reimagine, if not reinvent and reset long-­term strategy. McKinsey analyzed the 2007–2010 economic downturn and found that companies that moved early and invested firmly ahead of the recovery increased their earnings before interest, taxes, depreciation, and amortization (EBITDA) by 10 percent on average, while their industry peers lost nearly 15 percent.14 Your business relationships are often competitive, and you always prefer to be on the winning team. Wins come when you continuously outpace the market and are constantly relevant in understanding their current needs and anticipating your relationship’s future needs. As crucial trends accelerate and performance gaps widen, the sense of urgency heightens for many leaders. Suppose the teams they lead can respond speedily, doing what would traditionally take months to weeks, if not days. In that  Martin Hirt, Kevin Laczkowski, and Mihir Mysore, “Bubbles Pop, Downturns Stop,” McKinsey Quarterly, May 21, 2019, https://www.mckinsey.com/business-­ functions/ strategy-­and-­corporate-­finance/our-­insights/bubbles-­pop-­downturns-­stop

14

74

Relationship Economics

case, the organization can be more relevant in the lives of its strategic relationships—­ from employees to partners and customers. 2. Forget forecasts; develop a range of scenarios. Ever noticed what was fabulous years ago is back? No, not bell-­bottom pants or disco, but scenarios. Unfortunately, they’re often misused as forecasting tools when their real potential is helping you and your strategic relationships get your arms around uncertainties. If you create a range of scenarios as a spectrum of possibilities or eventualities, you can test them and plan strategic options. Scenario planning is where your relationships are invaluable as they can serve as signal scouts, independent sounding boards, advocates of extremes, and a litmus test for various outcomes. 3. Create a portfolio of Iconic Moves. Interbrand defines the formula of a fixed long-­term ambition and flexible short-­term action as Iconic Moves.15 It’s a brave move and common in organizations that thrive in turbulent markets, a dynamic that is accelerating how brands are built and scaled. Iconic Moves are fundamentally about anticipating relationship expectations. As your relationships become more informed, connected, and demanding in the post-­pandemic world, the static definition of a brand or its values becomes obsolete. Unfortunately, relationship expectations move faster than many organizations can react. If you look at Amazon’s behavior to date, you can identify four Iconic Moves in its hyper-­growth trajectory. Each is at the intersection of the relationship between its customers (what needs/desires will we address), experiences (through their lens, touch points, influences, and calls to action), and business model (agile alignment across the organization with the needs of turbulent markets):

 “Iconic Moves: Best Global Brands 2019,” Interbrand, https://www.interbrand.com/ wp-­content/uploads/2019/10/Interbrand_Best_Global_Brands_2019.pdf

15



Growth and Business Relationships

75

• Iconic Move #1—­In 2005, Amazon launched Prime, a subscription for faster delivery, which continuously expanded. • Iconic Move #2—­ In 2007, Amazon launched Kindle, cannibalizing its book sales but keeping growth in the company. • Iconic Move #3—­ In 2014, Amazon announced Echo (Alexa), kick-­starting the virtual assistant and the voice-­ enabled market. • Iconic Move #4—­ In 2017, Amazon acquired Whole Foods and bundled it with Prime, moving it to brick-­ and-­mortar. Iconic Moves shift the competitive landscape and capture your relationships’ imagination. As a result, employees become passionate about working, while customers increasingly reward them, driving extraordinary business results—­see the growth in Amazon’s net sales and net income from 1997–2020  in Figure  2.7.16 Iconic Moves ripple across multiple markets the organization may serve, and they are iconic because they dramatically alter relationship perceptions, choices, and behaviors. If brands are relationship stories, Iconic Moves are its chapter and verse. 4. Dynamically adapt your strategic direction. Your pre-­pandemic annual strategic planning exercise is no longer relevant. Every organization today needs a faster iteration of its plans. Several clients have shifted to monthly strategy meetings to review their priorities and update them as new challenges and opportunities arise. Forced obsolescence is no longer a luxury; it’s a necessity, and either you’ll do it to yourself, or someone else will do it to you!

 Felix Richter, “Amazon’s Incredible Long-­Term Growth.” Statista, February 4, 2022, https://www.statista.com/chart/4298/amazons-­long-­term-­growth/

16

76

Relationship Economics

Figure 2.7  Amazon’s Net Sales and Income Growth, 1997–2020 Source: Statista / CC BY-ND 3.0.

Strategic Relationship Cultures I coach every leader that the corner office has only two priorities: Brand and Culture. It’s a lesson I learned from a long-­time friend and former client, Dennis Sadlowski. Dennis diligently focused on what he called Outside-­ In-­ Leadership when he was the CEO of Siemens Energy and Automation. He convinced all his executive team that the outside-­in views of paying customers about their needs, their market challenges, Siemen’s competitors, and Siemens’ level of success in serving their current needs, as well as anticipating their future needs, were far more valuable than navel-­gazing internal discussions.



Growth and Business Relationships

77

Savvy business professionals understand that discussions, much less implementation, of any growth strategy discussed in this chapter heavily depend on the relationship-­centric culture they intentionally hire for, nurture, and sustain. A relationship-­centric culture is more than the cliché “People are our biggest asset,” so often contrasted with the hypocrisy of layoffs as the go-­to strategy as soon as the market drops. Relationship centricity must permeate every facet of the human capital agenda.

78

Relationship Economics

Chapter Two Summary • Business relationships are not static: they are dynamic like the wider business environment. The pandemic has changed how many business leaders think about relationships, forge new ones, and foster existing ones. • Recognizing how relationships drive organizational growth can help you future-­proof your business, making it resilient in the face of crisis. • Developing a relationship-­centric business culture is a core means of achieving a competitive advantage. • The highest-­performing teams are those that are relationship-­centric. • Aim for exponential growth in your relationships: focus on building depth and relevancy in your networks; fostering a connection between relationships; improving the quality of each relationship, rather than maximizing the number of connections; and adding value in every interaction.

Chapter 3

Six Phases of Strategic Relationships

L

eaders work diligently to ensure that their organization’s growth journey is the right one that can operationally scale and evolves the organization with changing market demands. They aim to place the right people, in the right jobs, with the right resources, priorities, and attitudes. They invest in this talent, measure their progress, and aim for continuous improvements. When reviewing a host of critical metrics such as KPIs, OKRs, or NPS scores, the perception is that the organization is doing well. And yet, many of these organizations struggle with very similar challenges: • Revenue Performance: Why are we struggling with customer acquisition or retention? Why are we struggling to gain mind share or consistent wallet share? Why do customer acquisition costs continue to rise against that customer’s lifetime value? Why do some of our sales cycles push each quarter, even though our revenue operations track every step of the buyer’s journey? • Isolated Exceptionalism: Why do only a few departments or teams seem truly effective while the others struggle to keep up? Why don’t the less effective teams learn from other teams’ exceptional performance? • Talent Silos: Why do all our talent and expertise in one subject gravitate to one area or department and stay there? Why do silo mindsets seem to sabotage our best intentions?

79

80

Relationship Economics

• Knowledge Transfer/Brain Drain: Why does crucial knowledge walk out the door with departing individuals? How can we elevate real collaboration in new work models like work-­ from-­home when we struggled pre-­pandemic to make collaboration happen in the office? • Market Relevance: Why didn’t we more effectively anticipate that key trend? Why are we slow to notice changing customer needs in the market? • Employee Engagement and Churn: Why are we losing great talent we should be able to retain? Why do we struggle to learn, unlearn, and relearn as teams or organizations? • Innovation and Transformation: Why is it so difficult for us to create something genuinely new instead of making minor improvements to our existing products and services? Why do I continue to hear about our competitors outpacing us with forward-­thinking products, services, and even business models, from our customers? • Differentiated Culture: Why do we struggle with real and lasting change? Why do reorganizations, mergers, and acquisitions feel so disjointed and produce lingering organizational and leadership stress points? We’ve mastered continuous improvement cycles and developed countless metrics. Yet, despite engaging an army of subject-matter experts, the above challenges continue to linger. With the global pandemic, they became even more pronounced. It’s as if something were hiding within these issues that can’t be solved through new technologies or better operations. Many leaders are missing the connective tissue in world-­class operations: a disciplined process for consistently identifying, nurturing, and sustaining value-­based, relevant business relationships. Beyond intellectually understanding that business relationships are essential, we need a path for viewing them strategically and approaching them proactively in every facet of our organization’s ecosystem. Unfortunately, most people don’t consider categorizing or

Six Phases of Strategic Relationships

81

planning regular maintenance of their business relationships. Instead, we initiate them by coincidence and sort them by context. We let relationships develop without much thought or planning and ascribe their benefits to luck or chance (when we think of them at all). For our relationships to enhance our capabilities, we first need to view relationships as valuable strategic assets that must be actively managed at the individual, team, and organizational levels. Then, we must learn how to apply the Six Phases of Strategic Relationships: Mapping, Relating, Nurturing, Requesting, Sustaining, and Capi­ talizing (Figure 3.1).

Figure 3.1  Six Phases of Strategic Relationships

In this model, we choose relationships selectively, invest in them continuously, and then capitalize on them by making proportionate and relevant requests. This model sits at the heart of Relationship Economics®.

Relationships Taken for Granted Over the past two decades, we’ve observed that strategic relationship development, nurturing, and sustaining skills are chronically misunderstood and underdeveloped competencies within many organizations. When you set a lofty goal for yourself, you need to ask not only “what?” and “how?” but also “with?” and “through whom?” Business relationships are not stand-­alone activities. They enable, accelerate, and maximize your ability to achieve your goals.

82

Relationship Economics

When organizations plan projects and strategic initiatives, they carefully define the financial investments, timeline, resources, and skills needed. They create project charters and write detailed project management plans. But few teams ask critical relationship-­ based questions—­such as “which relationships do we need and why?” On an individual level, this oversight is very predictable. Most professionals never receive formal training in relationship-­building skills, knowledge, or behaviors. Relationship-­development best practices are rarely covered within school curricula, professional-­ development programs, or corporate universities. Relationship building is assumed to be a “life skill” learned through personal interactions—­but not every individual has learned the same set of skills at the same level through their educational or professional journey. Bonding skills and acceptable behaviors vary with social context, so a person with good personal relationship skills for their own social set may need help adapting those skills to the different circumstances of professional relationships. Business leaders rarely consider this issue, and, as a result, a critical competency is missing. Amid the Six Phases of Strategic Relationships, you’re likely to engage three disillusioned archetypes: 1. The Bystanders: Some professionals simply don’t know how to start. They mistakenly assume that strong relationships likely require some combination of natural charisma and good luck. Most of their relationships arose from chance meetings or introductions by mutual friends, and they expect most business relationships to begin the same way. (A bystander does not engage in any of the Six Phases of Strategic Relationships.) 2. The Networkers: Other highly motivated professionals instinctively sense that relationships can produce game-­ changing results, but they don’t know where to start. So, they spend time networking, making casual acquaintances, and collecting business cards—­hoping that someday, somehow, all their activity will pay off. (A networker spends almost all their time in the Relating phase.)

Six Phases of Strategic Relationships

83

3. The Idealists: Some people become frustrated with business networking because they seek a more noble cause. They struggle with navigating the various phases and are turned off by those who “work their network,” attempting to quantify their efforts or seek reciprocity.

Why Organizations Leave Relationships Unmanaged, Unguided, and Untapped Many organizations compound this problem by assuming that relationships will take care of themselves. Unfortunately, this attitude creates a persistent blind spot that exposes the organization to significant unnecessary risk and limits growth. Professional management is built upon a principle: if you don’t measure it, you’ll struggle to manage it. Moreover, weak and unmanaged processes constrain growth. Therefore, organizations require fluency and competency in essential business activities—­ financial management, supply chain management, risk management, process management, and so on. When it comes to finance, a dedicated team under the CFO’s leadership closely monitors financial well-­being. It proactively ensures that the organization has the available resources at the right time and place and within critical strategic priorities to sustain growth. Moreover, the financial stewardship extends across the entire company as managers are entrusted with profit and loss (P&L) responsibility to ensure the company saves, spends, and invests its limited financial resources prudently. By comparison, most organizations leave strategic relationships to chance. Perhaps a small internal team in the customer success function cares for a few strategic accounts; this team may handle their retention and care after the initial sale. However, when you look deeper within most organizations, you find no enterprise-­wide strategy for identifying and growing strategic relationships. As a result, significant negative consequences occur in: • Intra-­Company Relationships: Departments find themselves trapped in silos and incentivized to work inefficiently or at cross-­purposes;

84

Relationship Economics

• Partner Relationships: Channel and alliance partners aren’t equipped with the support they need to produce success; therefore, the organization isn’t top of mind; and • Customer Relationships: Evolving customer needs remain undiscovered and unmet. Deep, highly relevant, mutually valuable relationships can help organizations anticipate unforeseen challenges and discover new growth opportunities in the post-­ pandemic, highly volatile world. In addition, viable and timely strategic relationships can dramatically reduce learning curves, adoption timelines, and time to productivity in many critical parts of the organization. Most people can learn how to build and capitalize on fantastic business relationships. The Relationship Economics platform is a balanced, hybrid approach necessary for anyone who needs to build and leverage relationships to get things done. It offers individuals a reliable, repeatable process to select and build relationships with integrity, relevance, and mutual value. It provides a straightforward methodology to quantify those relationships’ benefits to the organization. Relationship creation alone won’t suffice. We must plot a course from creation to relationship capitalization by recognizing the Six Phases of Strategic Relationships. We must understand the process before we can access its full value by capitalizing on it. We must avoid the false dichotomy of Takers and Givers and, thereby, miss some of those phases and, then, relationships’ full potential. As with becoming a financial investor, time and practice are needed to become a sophisticated Relationship Investor. Before learning these skills, the would-­be investor must develop a mindset that puts relationships at its center. Then, you need a road map and tool sets you can apply. Finally, you need an investment of time to digest the concepts and practice these skills in a safe environment to learn and grow through the process. Everyone has a unique pace in mastering these skills and behaviors. But over time, with coaching and support, most people can attain proficiency, and many can achieve mastery. Learning and applying relationship-­development skills can be incorporated at the organizational level as a scalable, manageable, and

Six Phases of Strategic Relationships

85

measurable process. Individual contributors, managers, and leaders with a relationship-­centric mindset: • Become more intentional about their investment efforts; • Prioritize fewer yet highly diverse and elevated quality of their relationships; and • Think about their business relationships as investments (and regularly evaluate their ROI).

Relationship Value Pyramid A fundamental challenge with business relationships is the way we approach them. They tend to be transactional, focused on the deal, the project, or the need of the moment, and they are generally set aside once that transaction is complete or that need is met—­at least until we have another need. Seldom do we think about maintaining them or giving back, as we would with a friend. As a result, the relationships within our portfolio naturally skew towards the lowest level of relationships in the Relationship Value Pyramid (Figure 3.2). • Situation Relationships: We occasionally engage with these people to accomplish projects or tasks. We connect with them only during business hours (maybe a short social drink after work). • Investment Relationships: These are our stable, cooperative relationships where we can begin to rely on each other to provide advice and support (extra effort). We’re comfortable sharing dinner with them. We may have even been to each other’s homes, met our respective loved ones, or participated in a social gathering or some other activity outside our work context. • Portfolio Relationships: These relationships have been tested where value has been promised and repeatedly delivered. While our mothers taught us not to call after 9 p.m., we know that, in a pinch, we can reach out late at night, and they

86

Relationship Economics

will be there. They’re often deep subject-matter or domain experts and are our go-­to people for unique insights and independent perspectives. • 2 AM Relationships: These unique relationships sit at the pyramid’s apex. These people will be ready to come to our aid whenever we need assistance. These professional relationships are also frequently strong personal relationships and possess a certain X-­factor. They get us, and we don’t have to pretend to be someone else around them, as they’ve seen us at our best and our worse hours.

Figure 3.2  Relationship Value Pyramid

At the start of a career, relationships naturally skew towards situational ones and likely contain few of the other deeper ones. We

Six Phases of Strategic Relationships

87

must first prove our worth and demonstrate a reciprocal attitude in those relationships. As we professionally mature, develop deeper domain expertise, and work with a broader array of colleagues, partners, and clients, our relationships deepen up the pyramid with time, depth, and relevance in each.

A Diversified and Purpose-­Driven Relationship Strategy We discuss quality aspects of the relationship when discussing depth and relevancy in the Relationship Value Pyramid. I have supposed that fewer, more authentic, and mutually value-­based relationships will always be more valuable than thousands of indifferent or irrelevant contacts.

Quality

Quantity

If you begin with fewer, great quality relationships, you’ll often meet other quality people and will soon have amassed a strong network of strategic relationships capable of propelling you to extraordinary outcomes. Strategic relationships require collaboration with a purpose—­a shared vision, outcome, or enemy (like overregulation) to get, keep, and elevate your relevance in the hearts and minds of others.

Quality Purpose

Quantity

When a savvy financial advisor builds an investment portfolio, she seeks well-­diversified investments. Similarly, we strive to create a diversified relationship portfolio when practicing Relationship Economics. The more diverse our portfolio of relationships, the broader our influence. Keep hanging out with the same people you know, and that’s as far as you’ll get. Conversely, elevate the quality, depth, breadth, and purpose of your relationships, and you’ll soon access new personal and professional growth opportunities. The financial advisor in this example doesn’t simply add every investment opportunity she learns about to the portfolio and encourage equal investment in each. Instead, she curates a well-­researched

88

Relationship Economics

portfolio of the most valuable options based on each client’s investment strategy, risk appetite, aspirations, obligations, and required flexibility. Then, from that vantage point, capital is distributed to give the client the highest return. Similarly, we need to be very strategic about the people we connect with and those with whom we invest deeply. When creating contacts through networking, it’s easy to mistake vibration with forward motion. Coffee and lunch visits are beneficial if the interactions are value-­based and move the relationship forward in its foundation of trust, credibility, and reliability—­you must go past perceived value to the actual and ideally quantifiable received value. For too long, we’ve been taught to create value by making those connections. However, without definite goals and clear intent, the value we realize from those connections is minimal—­much like the value, we would realize from generating a random list of funds and investing $20 in each until we ran out of money! We must avoid spreading our resources too thin and invest more in the relationships that create the greatest mutual value in our work and lives. Scarcer than money is the time available for us to create deep and meaningful relationships. We must, therefore, accept that we cannot and should not build Portfolio and 2 AM Relationships—­or even Investment Relationships—­with everyone.

What’s in It for Them? Business professionals with high levels of influence or access to power find many people vying for their attention. If you want to form meaningful strategic relationships with highly relevant people, you will need to stand out/apart from the crowd. A stand-­out /apart strategy best manifests itself in your brand. Suppose your personal brand is authentic, clear on specific values that have guided your career, and what you expect from others you choose to build a relationship with. In that case, you’re less likely to be disappointed in your business relationships. Two aspects of your brand are critical when it comes to relationships:

Six Phases of Strategic Relationships

89

1. When you meet people, they may remember you. But if you want them to be curious to learn more about you, become an object of interest. 2. As a Relationship Investor, you are willing to make definitive investments of your knowledge, expertise, wisdom, and relationships in others before asking them for help. You accomplish this by making Relationship Currency Deposits™ in others. If you don’t present these qualities in meaningful interaction, you limit your ability to create market gravity or pull toward yourself and your personal market value. If you’re not making Relationship Currency Deposits, you’ll be seen as a highly transactional networker or, worse, a relationship Taker.

Becoming an Object of Interest The best way to become interesting is to become more interested in others. Becoming more interesting requires real effort and significantly more than simply memorizing a few witty jokes for the next cocktail reception—­ often a sign of amateur relationship builders. Business professionals show up very differently. None of these attributes are intended to enable grandstanding, becoming more manipulative, or cater to narcissism. On the contrary, these tips/techniques are intended to help you jump-­start your journey to authentically get to know others better, become a unique asset to them, and nurture long-­term relationships with those who are highly relevant to you. Here’s how: • Breadth of Knowledge. Read frequently; absorb knowledge whenever you can. This knowledge will help you initiate interesting conversations or add a unique viewpoint to various situations. Don’t be pedantic or lecture others but offer contributions to the discussion when they’re relevant and interesting. For example, research what others do and find an interesting conversational on-ramp if you’ve identified a specific connection you want to make.

90

Relationship Economics

• Selflessness. Make a habit of lowering your self-­interest and becoming more interested in others. Focus on asking them interesting questions about themselves and listen intently to their answers. Don’t over-­volunteer information about yourself; tell them just enough to pique their interest. Then, if you’re successful, they’ll lean in and ask for more. Remember, no one wants to, or needs to, know everything you know, so practice brevity and preciseness in all facets of your communications. • Candor and Authenticity. The world is full of yes-­people; don’t be rude but be honest and say what others can’t or won’t. Your relationships will value you as someone who is not afraid to speak up and caution them against mistakes or potential risks—­including inaction. Similarly, be consistently authentic about yourself, and don’t be scared to show your positive attributes, including outside interests and passions. • Perspective, Conviction, and Point of View. Develop a unique point of view, and don’t be afraid to express it. Respectfully challenge assumptions or assertions and embrace others’ perspectives. Ask compelling questions to help them explore a different perspective on their situations: there is value in seeing things through a different lens. Bring conviction to your position, yet be flexible enough to hear, see, and experience opposing views. • Engagement. In every interaction, be present, in the moment, and engaged. Put your phone down; don’t linger by the bar or the buffet table. Instead, focus on why you’re there and give the people around you your full attention. The energy you put into conversations shows and will set you apart. At a basic level, this pre-­work is foundational and essential. Very few people will want to form relationships with people who present themselves as uninformed, selfish, inauthentic, reticent, or disengaged. You will need to develop proficiency in these elements when you begin your journey as a Relationship Investor. Be patient, as mastery will take years and some mistakes, but wisdom comes with age and professional maturity.

Six Phases of Strategic Relationships

91

Relationship Currency Deposits®

Figure 3.3  Relationship Currency Deposits

To build valuable relationships, you must do more than become an object of interest. You will need to make relevant investments in others. You form relationships when you help people reach their goals. Relationship Currency is what you invest in relationships to increase their value—­Figure  3.3. It can be anything that has value to the person you’re giving it to. Some types of Relationship Currency include: • Gift of Time—­When we’re all busy, any investment of time in others is a gift. Invest yours prudently, know that it’s okay to politely decline some requests, and ensure you never waste theirs! • Unique Talent—­ Know-­ how is precious in every facet of our  business relationships. Someone with relevant talent in

92

Relationship Economics

performing a task or function who knows a locality or the industry’s nuances can cut your ramp-­up time and deliver immediate results. • Special Knowledge—­ Skills are mastered through applications, knowledge, and wisdom. When those skills delivered the desired outcomes, knowledge also came from instances when they didn’t. Discerning when and how to experiment, and the wisdom often derived from deep or unique expertise on a specific topic, is invaluable. It’s also incredibly beneficial to every business relationship. How often have you heard, “Let’s get Beth; she’s amazing at . . .”? • Access to Influential Relationships—­ Another invaluable asset is access. Examples of this type of Relationship Currency Deposit are those who can open doors, make introductions to people you need, remove obstacles, make the impossible happen, and bring two or more parties together to co-­create something unique. When forming a new relationship, making at least three Relationship Currency Deposits is wise before asking for anything in return. When you begin a business relationship, it’s worthwhile to focus on What’s in it for them? And a simple “How can I help you?” is proactive.

Making Relationship Currency Deposits A Relationship Currency Deposit can be something you provide directly or something you can grant access to or cause to be delivered to someone else. For example, if the person you’re investing in is passionate about a particular charity, you could offer your support of that cause; you could donate money; you could ask your employer to donate; or you could introduce others with special skills or helpful services for charities. The value of Relationship Currency Deposits will always be in the eyes and heart of the recipient. The more you know about someone, the better you can identify specific types of investments that would

Six Phases of Strategic Relationships

93

create the highest value for them. Relationship Currency increases in value when: • It’s something the person needs rather than simply wants. • It fulfills an impending or created need rather than just an existing one. • You can provide it at a high level of quality or competence. • It’s unique: only you can provide it. The more of the above statements that are true, the higher the perceived value in the hearts and minds of your relationships.

Exchanging Relationship Currency Once a relationship is formed, there’s a routine exchange of Relationship Currency. The “gives” and the “asks” are generally proportionate. But, over time, as the relationship increases in depth and relevancy, the value of the Relationship Currency exchanged tends to increase. A wise Relationship Investor recognizes that Relationship Currency is perishable. As inflation decreases the value of money over time, time decreases the value of a Relationship Currency Deposit. If you made a small investment in a relationship three years ago, you can’t expect it to retain value today. Most people can’t remember what they had for breakfast this morning, much less what someone did for them three years ago! Relationship investors, therefore, consciously choose to make regular investments in their strategic relationships. They make a point of regularly exchanging relationship currency to maintain the value and freshness of the relationship. Think of these deposits as cash—­short-­term, mutual exchange of immediate value. It’s essential to remember that, although we tend to see these people within the business/professional context, they have outside lives. Do not limit your knowledge of them to a career alone. Find out what else they do and the values of other parts of their lives. What people do at work is not who they entirely are. You can make Relationship Currency Deposits in many contexts: supporting their philanthropic

94

Relationship Economics

cause, aiding the efforts or needs of their family or friends, or simply bringing them joy such as a personal passion or intellectual curiosity. Never overlook an opportunity to add value and, in the process, become an object of interest. If the business relationship has elevated to a personal friendship, you can also offer to help their loved ones.

Outcome-­Driven Relationship Frameworks The Relationship Economics platform calls for intentional investments in carefully chosen relationships to produce a significant return on investment. These strategic relationships are thoughtfully selected and are highly relevant to the selector’s specific outcomes. We call these outcomes, Relationship-­Centric Goals (Figure 3.4).

Figure 3.4  Relationship-­Centric Goals

Business relationships are not a stand-­ alone asset; they are enhancers or enablers of the desired outcome. From a Relationship Economics perspective, the value of a strategic relationship lies in the person’s ability to accelerate a set of desired results. With the right relationships, it’s possible to reach Relationship-­Centric Goals more quickly and with a direct investment of resources (time, effort, capital—­human and financial). The success of accelerating your time to impact and reaching your desired business outcomes heavily relies

Six Phases of Strategic Relationships

95

on four critical models; two I’ll discuss in this book. Co-­Create and Curve Benders warrant their own books—­see the end of this book for more details. 1. The Six Phases of Strategic Relationships—­taken together, these represent the competencies and observable behaviors necessary to develop strategic relationships. 2. Strategic Relationship Planning (SRP)™—­the ability to plan a detailed strategic road map that leverages a broad portfolio of cross-­organizational relationships to accelerate enterprise value creation. 3. Co-­Create—­two or more parties coming together to identify market gaps, propose respective strengths, and invest in an outcome that (a) neither side could create alone, and (b) to which both sides commit long ­term for the outcome’s viability. Our children may be the best example of co-­ creation, where you and your significant other bring the best of each of you; they don’t stop being your kids at 10, 20, 30, or 40! What if the same commitment was applied to a few strategic relationships in the context of our work? 4. Curve Benders—­in the future, continued disruptions will impact the way we work, live, play, and give to others. To remain relevant, we must continue to learn and grow. For most, that’s a linear path (think of a slow and steady 45-­degree hill). But, that linear growth will no longer suffice. Instead, embrace a nonlinear growth journey (think of a hockey stick curve), and the fastest way to get there is through a few strategic relationships. Your Curve Benders profoundly impact your direction and destination. So who and where are they? More importantly, for which individuals can you become a Curve Bender? Let’s begin with the six phases of strategic relationships. I’ll build on Strategic Relationship Planning in the next chapter.

96

Relationship Economics

The Six Phases of Strategic Relationships Let’s look first at how to build lasting, meaningful, and robust relationships. The people in your network are the dots you will connect with unique and consistent value-­added to reach your desired outcomes—­ but each connection is only as strong as the relationship you chose to nurture and sustain. To effectively accelerate your goal, your relationships must be mutually valuable. Do note that the Six Phases are additive, not consecutive. You don’t stop doing one phase because you’ve progressed to the next phase.

There Are Six Unique Phases of Building a Strategic Relationship 1.

Mapping: Recognizing and prioritizing the relevant individuals who can add specific value to your efforts and desired outcomes. Identifying involves choosing individuals with whom to pursue a connection and being aware of the people around you so that you can build a valuable relationship if an unexpected challenge or opportunity arises. Mapping is seldom an isolated event; it’s instead an ongoing development with a feedback loop mechanism to update with each insight.

This early diligence is the strategic planning and preparation phase of relationship building. In the Mapping phase, you will ask yourself a series of questions: • Who can help me achieve my desired business outcomes? • Precisely how can that person help me? What do I want to learn from or gather through them? • How can I connect to that person? Or are they already in my existing network?

Six Phases of Strategic Relationships

97

• What do they value? What are the most effective investments I can make in them? • Why would they want to connect (or connect more deeply) with me? How can I get their attention? The “who” can be a specific person or an unnamed person with access to resources that will help accelerate you toward your goal, such as skills, influence, or access to a specific network or influential relationship. For instance, you may need the skills of an experienced tax attorney, a CPA, or a manager who can bring a project proposal to an organization’s leadership. Identifying who and what you need is based on your Relationship-­Centric Goal, which is part of the Strategic-­ Relationship Planning process we’ll cover in the next section. It’s worth noting here that anyone with whom you connect should be someone who understands the significance of relationships: someone who will recognize the value you are investing in them and reciprocate that investment in you. A relationship Taker may have the resources you need, but you’ll never be able to access them. If, at any point in this process, you realize you’ve connected to a Taker, politely disengage or distance yourself. Save your efforts for those who will reward them. Next, how can you connect to the person you’ve identified? If the person isn’t in your network currently, do you know someone who knows them? The easiest way to jump-­start a relationship is to get an introduction from someone who trusts you and is trusted by the person you want to meet. You can maximize the efficiency and impact of every referral if you can arm the introducer with the facts needed to introduce you most effectively to ensure that your brand and desired outcomes are communicated clearly from the early interactions. Ideally, the introduction will share the introducer’s trust and respect for you, and the person you’re connecting with will extend you an initial level of confidence. If the person is in your network, you’ve already passed the introductory steps. In that case, evaluate the status of that relationship. Is it an established strategic relationship? If not, which of the six phases is the relationship currently in? How valuable is the connection? Make

98

Relationship Economics

sure to look at it from the other person’s perspective: you can’t leverage the value they don’t acknowledge. If the relationship is not where you need it to be, plan how you can build it to that point. Winston Churchill once said, “It is always wise to look ahead, but difficult to look further than you can see.” Mastery in the Mapping phase comes from the fundamental mindset of what sociologists call being Ambient Aware. The more due diligence you do on the possible relationships most relevant to your outcomes, the more you become aware of their likes, dislikes, preferences, and prejudices. This insight will allow you to plan your relationship development efforts more proactively. 2.

Relating: Creating the initial connection with a person on which a mutually valuable business relationship can be developed begins with the Relating phase. Relating includes demonstrating your unique perspectives, value-­ add, and professional brand worthy of their investment of time, effort, and resources. Equally important, relating is about a genuine interest in their personal and professional pursuits, challenges, opportunities, and a heart of service to others. Sufficient and ongoing investment in the Relating phase will produce the most relevant Relationship Currency Deposits with the greatest return on your relationship investments. Get Relating right, and you’ll quickly elevate yourself from casual contact to a place of intrigue worthy of further discussions.

This phase is much more than the simple handshake and an exchange of business cards. The Relating phase contains two equally important aspects: 1. Reciprocate First with an investment toward helping them achieve their stated goals and objectives; and 2. Present yourself as an Object of Interest worthy of a reciprocal investment.

Six Phases of Strategic Relationships

99

Balance these two aspects carefully. If you solely focus on yourself, you’ll come across as a narcissist, and if you focus exclusively on the other person, you’ll seem creepy or sycophantic. In essence, the Relating phase is a guided (but not scripted) discovery opportunity to get to know others and give them the chance to get to know and become more curious about you. The other cringeworthy mistake people make in the Relating phase is small talk. Most of us are utterly bored with small talk and find others dramatically, if not profoundly, more interesting if they ask intelligent, engaging, thoughtful questions. In short, if you want better answers, ask better questions. The answer you get is often very revealing regarding the other person’s leadership brand, skills, knowledge, breadth, and experience. Most importantly, you can gain insights into their beliefs about relationships. Do they demonstrate respect by not interrupting or attempting to one-­up others with their facts and stories? Are they condescending, know-­it-­alls, and utterly inappropriate in how they carry themselves? Becoming an object of interest makes use of prudent judgment, discretion, and brevity. If you share unique insights in small doses, others become intrigued and lean in. Reference a recent article or credible research source you read about an exciting topic and listen intently for their response to a compelling question you propose. “You’re in cybersecurity? I find the space fascinating. Did you attend RSA in Las Vegas last month? I heard it was a great gathering! By the way, what’s your opinion of Zero Trust and invisible MFA?” Within a few minutes, I’ve sent a signal that I know a little about that industry and am genuinely interested in this person’s perspective on an emerging facet of their space. To be able to do this, ideally, you should read a lot of different types of business material (my daily dose includes some 22 online newsletters I subscribe to, such as the MIT Sloan Management Review, the Wall Street Journal, and the New  York Times, as well as cover-­to-­cover monthly print issues of Fast Company, Inc., and Harvard Business Review magazines). I also pride myself on learning a great deal from my client relationships. In this phase, it’s also vital to understand that every relationship has a unique pace, and letting things develop naturally is essential.

100

Relationship Economics

You shouldn’t rush any of the Six Phases, but be especially careful in the Relating phase of a new relationship when initial trust is being established or an existing relationship is expanding to include a new sphere that requires a different level of confidence (such as deepening a professional relationship into a personal connection). The association is more fragile at these points, and misalignments around pace have a much higher risk of destroying the relationship or significantly increasing the time and investment required to bring it to its full potential value. The Relating phase has no specific timeline and needs constant revisits to ensure you do not make wrong assumptions about your relationships. You return to the Relating phase whenever the other person reveals an interesting and relevant data point. With the increased depth and relevancy in your relationship, your ability to master the Relating phase helps you move naturally to the Nurturing, Sustaining, and Requesting phases. 3.

Nurturing: Making Relationship Currency Deposits to build trust and confidence is the cornerstone of the Nurturing phase. In this Nurturing phase, you demonstrate to the other person the value of an ongoing relationship with you. Beyond the professional context of our work together, here is where I look for opportunities to invest on a personal level. My favorite examples are new entertainment or dining experiences with significant others, access to an interesting resource, or a glimpse into a path to one of their aspirations, such as writing a book, riding a motorcycle, or meeting a Formula One driver. Over time, this cadence of Relationship Currency Deposits accumulates to become your Reputation Capital®—­ “Steve may not have the answer, but he knows someone in the company who does,” or “Tug is the guy you need to know at Google if you want to create a digital partnership in Istanbul or Singapore!”

The Nurturing phase is where you establish your trustworthiness and value by using the insights you’ve gained through Relating to oth-

Six Phases of Strategic Relationships

101

ers. In some situations, you will learn of someone’s need and be able to make an immediate and unique Relationship Currency Deposit that creates the highest value. Most times, however, you will need to plan out your investment thoughtfully, much as a financial investor carefully researches investment options before writing a check. See sample questions and associated investment criteria in the following table. Question

Investment Criteria

What does this person need?

A deposit that meets a need has more impact than one that meets a want.

What type of need is it? Existing need, impending need, or created need What can you offer?

Leverage the types of Relationship Currency to identify what assets you have (or can access)

Can you meet the need with a high level of competency?

If you’re going to make a Relationship Currency Deposit, gauge its priority, sense of urgency, and do it with the maximum impact.

Is it something they can’t get anywhere else?

Uniqueness has the highest value and relevance to their highest priorities.

An exciting asset in business relationship Nurturing I discovered years ago is the ability to connect the dots between the relationships you already have and the ones you need in order to accelerate the path to your desired outcomes. I call these Pivotal Contact™ (Figure 3.5), as they are often one or two degrees from your current connections and one or two power structure levels above your current reach. What’s incredibly powerful about these Pivotal Contacts is that they can make one phone call, send one email, or make one introduction and, in the process, save you hours if not days, weeks, or months in that journey. You initially may not know who these Pivotal Contacts are or be able to interact directly with them to learn about their needs, but your existing relationships may. Suppose you research and profile your Pivotal Contact, connect with, and become an asset to people who know them in the Nurture phase. In that case, you create access to

102

Relationship Economics

or an opportunity to engage with these highly influential relationships. What do they need? What matters most to them? What is the most valuable Relationship Currency Deposit you can invest in them? More on this in the next chapter on Strategic Relationship Planning.

Figure 3.5  Pivotal Contacts™

A Relationship Currency Deposit may seem like a brilliant idea on paper, but even sophisticated business professionals can underestimate or overestimate its value. A Relationship Currency Deposit doesn’t have value until the recipient recognizes its importance. So, it’s wise to check with the person after investing in gauging their perspective on the value delivered and impact created in the heart and mind. If you hit the mark, great—­do more of those investments. If you missed the mark, ask better questions about what you can do differently next time. When you view developing business relationships as a multiround process rather than a single transaction, you see your investments furthering the other person’s needs, goals, and aspirations. The continued exchange of value between people moves both parties from intrigue to genuine relevance and strategic priority. Valuable relationships get prioritized (think calls and emails), referred to others, and anticipatory in future interactions.

Six Phases of Strategic Relationships

4.

103

Requesting: Equal requests of the person you’ve invested in bring a natural balance to the relationship. Your requests must come only after the value is received. Otherwise, you’ll be a “relationship Taker,” and the relationship will be short-­lived. Conversely, you’ll only be seen as a Giver if you don’t request reciprocal value. Givers can go broke because Takers will never subside. You will be recognized as a Relationship Investor only when the exchange is of mutual value. Requests can be small in nature, pressing with a sense of urgency, or highly challenging. My litmus test in the Requesting phase is to ascertain whether I’ve made sufficient deposits for the other side to feel compelled to prioritize and act upon my requests.

What’s critical here is that whenever you ask for help, frame your requests so that it’s as easy as possible for others to say yes. We’re all busy. Don’t overcomplicate things, don’t be vague, don’t beat around the bush, and don’t make the ask in 137 parts! Specificity conveys credibility, and people in most relationships want to help you; they simply may not prioritize it, understand where/how you may need help, or how to add value to your world. So, firm up your ask! Develop the skills, knowledge, and appropriate relational behaviors here to evaluate when to request help to achieve your objective. How you frame your requests says a lot about your judgment and prudent risk-­taking, and whether you’ve invested and nurtured the relationship enough to ask for something in return. You also need to provide adequate information pertinent to the request. Your business relationships will move up the Relationship Value Pyramid when you routinely exchange Relationship Currency. Others will begin to see you as a critical member of their relationship ecosystem, the go-­to person for your area of expertise, a viable sounding board, and a good friend! Beyond the business aspects of your relationships, you begin to interact socially, perhaps meet their significant

104

Relationship Economics

other, and earn the trust and respect of shared confidential information or insights not yet public, often reserved for those in their Inner Circle. Over time, you create repeated Relationship Currency exchanges and begin to accumulate your Reputation Capital. Your goal is to transcend the stage in which only your Relationship Currency Deposits’ value is recognized by others and achieve a state where others recognize you for delivering that unique value. Comments in this phase sound like, “We couldn’t have achieved that incredible result without Joe,” or “We saved an enormous amount of time and effort, thanks to Beth’s products and services.” In other words, these people shift their lens from valuing what you give them to valuing you. This shifting mindset is necessary for the relationship to move higher on the Relationship Value Pyramid, as the interactions move from highly transactional to potentially transformative. As a relationship moves up the pyramid and you gain recognition for delivering quantitative and qualitative value, the stakes for Relationship Currency Deposits increase. The other person expects more, so you must up your game to more relevant and effective investments. • A Situational Relationship will appreciate your presence, engagement, and point of view in most situations. • An Investment Relationship will expect your relevant insights, unique perspectives, and a prioritized response in moderately difficult situations. • A Portfolio or 2 AM Relationship will expect your candor, accountability, and conviction in even the most difficult situations. When you move up the Relationship Value Pyramid, you reduce the transaction costs of working with you. People expect you to be competent and trustworthy at the foundational levels of the Relationship Value Pyramid. But as you increase the depth and relevancy of the relationship, people will rely on you much more. Therefore, the value promised and the value delivered must continue to increase.

Six Phases of Strategic Relationships

105

That’s the price (and benefit) of Reputation Capital. When you have it, you reduce the transaction costs and make it easier to work with you. 5.

Sustaining: Keeping the relationship strong by staying in touch is the hallmark of those who brilliantly sustain their business relationships over long periods. We build relationships for three fundamental purposes:

1. A reason, often highly transactional; 2. A season where several reasons are connected over a period; and 3. A lifetime! Sustaining is about demonstrating to others that they’re top of your mind and that you have a vested interest in not just what they do but also in their overall success and significance. When you do that, you encourage a desire to reciprocate similarly with you. Sustaining is as critical through turbulent times as it is through prosperous ones. Business relationships that weather ups and downs become stronger over time and reignite opportunities to maneuver into other phases. You create a process to manage your relationships in the Sustaining phase, including executing a consistent outreach program. A Relationship Investor makes many investments of Relationship Currency; without a process, it would be easy to forget about those investments and neglect their development. Relationship Investors use the Sustaining phase for several different purposes: • Create opportunities to learn about others, reveal more of themselves, or promote their collaborative value. • Elevate their relevance in work, lives, and success of others through consistent, value-­based interactions.

106

Relationship Economics

• Identify or create opportunities to make more investments of Relationship Currency. The Sustaining phase creates intentional touch points to check in with your most valuable relationships, often creating opportunities to maneuver between Relating or Nurturing activities. You mustn’t get caught up in the terminology, but instead see your business relationships as a credibility continuum. The way to solidify and sustain these attributes, rather than initially developing them, is never to go dark on your biggest asset: your business relationships. We all lead busy personal and professional lives. Yet, Relationship Investors know that Relationship Currency Deposits lose their value and potential impact over time—­think of these investments in others as having a freshness date. Therefore, Relationship Investors continually review their Relationship Bank (their existing relationships) and evaluate the quality, depth, relevancy, and diversity of these connections. Here are two great questions to challenge your assumptions about your business relationships: 1. Are your new strategic people moving along a continuum from simple acquaintances to valuable relationships (said another way, up your Relationship Value Pyramid)? Will they have the depth and relevancy needed to meet tomorrow’s goals or objectives? 2. Are existing strategic relationships in danger of moving down the Relationship Value Pyramid due to neglect, misaligned expectations, or discrepancies between value perceived and value delivered? The Relationship Investor creates a touch base cadence strategy for each level of the Relationship Value Pyramid and then ensures that each interaction creates value for the recipient. For example, if you call people simply to ask how they’re doing, sure, that’s valuable for the first few times. But what’s your game plan afterward? Great relationships are derived from great conversations, and great conversations result from great questions. Sure, it takes an effort, but it’s an essential

Six Phases of Strategic Relationships

107

path to mastering the Sustaining phase, as it helps you pervasively integrate relationships into every facet of your work. Additionally, the right digital presence becomes an essential tool for the Sustaining phase. The platforms may change somewhat yearly, but you need to remain active. You will artificially limit your ability to sustain your strategic relationships if you don’t have an active presence. Here are some general guidelines for sustaining different levels of relationships through a consistent cadence: • Situational Relationships: Automated contact such as a periodic personal or organizational newsletter to keep them abreast of the impact you’re creating in your relationships is sufficient unless your goal is to increase the level of intimacy in the relationship. • Investment Relationships: Contact these individuals directly at least once a quarter or when you learn something that might be of particular interest or unique value to them. • Portfolio Relationships: Contact these individuals directly at least once a month or when you learn something that might be interesting or valuable to them. • 2 AM Relationships: Ad hoc as either side needs access, a deeper level of openness, and independent or unique insights. Proficient Relationship Investors set aside time to manage their long-­term investments. You need to manage your key relationships and identify ways to integrate others into your relationship ecosystem. One of the most powerful approaches is a fundamental shift from what I call a Relationship Bowtie into a Relationship Shoelace (Figure 3.6). Most relationship developers understand that you often begin with a single point of contact, whether within the organization or external to it. As you establish your value and nurture that relationship, the logical response to your perceived and received value is an introduction to others with similar challenges or opportunities. Through this natural relationship ecosystem expansion (it should never be forced!), you proactively nurture relationships up, down, and across

108

Relationship Economics

Figure 3.6  Relationship Bowtie versus Shoelace

that internal department or the client organization. With the support of your primary relationship/sponsor, you’ll extend and expand your relationship ecosystem to turn the bowtie around and make it look more like the shoelaces in Figure 3.6. With the latter, you’re no longer at the mercy of a single point of contact in that department or client organization. For example, if your primary contact transfers, retires, or leaves the organization, you’ll be

Six Phases of Strategic Relationships

109

hard-­pressed to continue the momentum in that sphere. Regrettably, you’ll find yourself back at the Mapping phase with all new contacts who may be unaware of your brand or not have experienced your unique value add. Capitalizing: Accessing the value you have built in the relationship to advance your desired business outcomes is the ultimate return on your relationship investments. It is important to highlight that this phase is so much more than a transactional sale, completion of a  project, or filling a position. It’s the pinnacle phase of mutually value-­ based business relationships where both sides become materially entwined in one another’s work (and lives). Unfortunately, while many business professionals are strong at relationship creation, they lag in relationship capitalization.

6.

A handful of attributes characterizes the Capitalizing phase: • The relationships you’ve aimed to nurture and sustain begin to keep you top of mind and reach out with unique, often discrete challenges or opportunities. • You’re thought of as a profound and relevant strategic asset. • Beyond any transaction, they often bring you into their inner circle to enhance, amplify, or otherwise accelerate a transformational journey. • The leadership brand you’ve worked diligently to develop comes to fruition as they introduce you to other highly influential relationships with your brand attributes (I’m often introduced to other C-­ suite or board members as “the Relationship Economics expert” or “Nour’s Co-­Creation work is what brought us together” or “Nour is one of my Curve Benders!”).

110

Relationship Economics

In a customer-­centric relationship, Capitalizing on the relationship is demonstrated by the client who has bought from you over the years. The best clients increase their commitments and often make unsolicited introductions to their industry colleagues (every introduction is a recommendation). Fantastic clients are willing to serve as a reference, participate in your customer advisory group, speak at your annual meetings, or bring you into multiple other companies as they move around in the industry. This type of relationship is beyond a transactional exchange and is the pinnacle of what you work toward in lifelong business relationships. The relationship in this scenario is vital because both parties feel that they’re materially better off because they’re in a business relationship. The Capitalization phase is often highly transformational for both parties. Capitalizing is often reserved for 2 AM relationships in the Relationship Value Pyramid. Over the years, both sides have significantly invested in one another. You’ve been through ups and downs. Credibility has been demonstrated through countless interactions and engagements, and in both professional and personal settings. Capitalizing on business relationships requires such meaningful, candid, and vulnerable exchanges that many sales or business development professionals will seldom genuinely get there. Those lucky enough will gain more than a lifelong customer; they’ll gain a lifelong friend. Similarly, in cross-­functional departments within an organization, Capitalizing on your business relationships looks considerably deeper / more effective than generating reports, working on a campaign, or completing an important project together. Imagine both careers rising, at the same or different companies, both of you agreeing to invest in each other’s success, raising the bar on enterprise value creation. Lastly, consider an angel investor who gives a budding entrepreneur seed funding, supports their efforts to secure subsequent rounds of financing, and, in the process, becomes a mentor, coach, and friend during the tumultuous phases of the company’s growth cycle. One could argue that the investor is simply protecting that investment. I’d say that a few lucky entrepreneurs accelerate their success by nurturing and sustaining deep and highly trusted relationships with their inves-

Six Phases of Strategic Relationships

111

tors. After the startup is sold, the Capitalizing phase of their relationships involves the investor’s participation in, and syndication of, others to invest in the entrepreneur’s next venture. Many investors co­invest with the successful entrepreneur in other promising startups. I met Randy Seidl, former EVP of Enterprise Systems, Storage, and Networking (ESSN) at HPE and current CEO of Revenue Acceleration and The Sales Community, when he was a sales leader at Sun Microsystems. I delivered a keynote at their annual partner conference in Las Vegas. On the front row, Randy sat and took several pages of notes. We quickly formed a business relationship where I coached him and several of his leaders. Several speaking engagements later, I worked with Randy in his new role at HPE. The manner with which he identifies, nurtures, relates, and ultimately capitalizes on his lifelong business relationships is exemplary. What began as an entry-­level inside sales job at EMC Corporation in the early 1980s, right after graduating from Boston College (where Dick Egan—­the E in EMC—­was a professor), has turned into five decades of deeply rooted, highly trustworthy, global relationships and lifelong friendships. “I’m probably in touch with at least 60 colleagues from my EMC days. Thirty-­eight have become C-­suite executives, including chief executives or chief revenue officers of high-­flying tech companies. Another dozen have become venture capital or private equity investors. The remaining 10 are board members or angel investors with me in roughly 30 tech startups,” he shared during our interview. “If I didn’t invest in those relationships over the years, my relationship ecosystem wouldn’t include Peter Bell, now a venture capital partner at Amity Ventures who was a sales rep at EMC and a spark in my start of the Sales Community. Peter McKay, CEO of Snyk, who raised their F-­round of funding at an $8.2 billion valuation last year, was EMC’s sales manager. Jeff Casale took one of the first field sales rep jobs at EMC in Arkansas, and now he’s the CEO of MarkLogic,” he added. “These are lifelong business relationships which have become personal friends and a vested interest in not just what each of us can accomplish, but our personal and professional growth as well,” Randy concluded.

112

Relationship Economics

In 2014, Seidl introduced me to Jeff Carney, then president and CEO of Mackenzie Investments in Toronto. Jeff needed an executive coach. Having worked with him for a couple of years, I was delighted to see him get promoted to president and CEO of the parent company, IGM Financial (TSX: IGM). IGM is one of Canada’s leading wealth and asset management companies, with an estimated $271 billion in total assets under management. During several vacations to Martha’s Vineyard, my family and I had some great times with Jeff, Carolyn, and their children. Jeff and his family stayed in our home for the New England Patriots Super Bowl game in Atlanta, and Randy was kind enough to include my wife and me at a local dinner gathering of the Patriots fans. Jeff called me in January of 2020 to tell me that he had been diagnosed with early stages of Alzheimer’s disease. He asked for my counsel on when to share this devastating news with his board. We have stayed in touch, worked through his timing and succession plan, and planned a transition to a senior leadership/board advisor role. We recently visited with him and Carolyn in Martha’s Vineyard, where we went to a local collegiate baseball game where Randy’s son was playing. Although my business relationship with Jeff has concluded, I look forward to years of personal friendship as my wife and I have grown to love Jeff and his family. Through our work together on the Sales Community #Tech­ SalesInsights podcast and weekly livestreams, now in its third season, Seidl has also made countless introductions to world-­class tech CEOs, chief revenue officers, and investors. We’re exploring angel investments and board opportunities together. My relationship with Randy Seidl has bridged to the Capitalizing phase for us both. These phases have some nominal degree of directionality. For example, you should relate to others and nurture relationships before you attempt to Capitalize on them. An established relationship, however, can (and should) move fluidly back and forth between phases. A good way to approach this is to remember that you can always shift back to a previous phase without losing momentum, but you can only move the relationship one stage further than it has gone before and only when it’s ready. So a relationship that has reached the Sustaining phase can shift into Relating or Nurturing, then move directly into Capitalizing—­but you can’t push a person to whom you’re still Relating directly to the Capitalizing phase.

Six Phases of Strategic Relationships

113

These phases should be familiar from personal relationships. They’re the same steps we instinctively move through to turn an acquaintance into a close friend or to turn a date into a long-­term romance. In a business context, however, it’s essential to consider and implement them strategically, often starting before the introduction. Note that the perceived impact of value exchanges affects the speed.

New Strategic versus Established Relationships When you develop a new strategic relationship, it’s essential to establish the connection and prove that you’re able to deliver value consistently. Often, the first and second meeting are critical times for the Relating and Nurturing phases; each person evaluates several critical questions, as evident in past examples I hear, have learned, or otherwise gathered: 1. “Is this person worth my time and invested efforts?” 2. “What value does this person promise and can deliver?” 3. “Can I trust this person?” The first two questions are addressed in the Relating phase. The third question is managed through the Requesting or Nurturing phases. When developing a new strategic relationship, aim for three unique and valuable investments through the Relating and Nurturing cycle before requesting anything in return. Sustaining and, ultimately, Capitalizing phases come when there have been sufficient interactions, quantifiable outcomes from the early Relationship Currency exchanges, and only if both sides believe it’s worth doing so. Once you have an established strategic relationship, the phases become more fluid. As a result, you will probably shift from phase to phase. At that point, staying in any specific phase order is not necessary. Next, let’s build on the Six Phases with a consistency of how to consistently transform everyday contacts into value-­based relationships through the Strategic Relationship Planning (SRP) process.

114

Relationship Economics

Chapter Three Summary Six phases in Strategic Relationship development are critical to your success. The following table summarizes the key insights from this chapter. Dimension Description Mapping

Relating

Nurturing

Plan a strategy to achieve your goals more quickly by identifying what you need and who in your network can best provide it.

Having the ability, knowledge, or skills to:

Identify individuals inside or outside your network who can accelerate your achievement of a specific goal; Develop a strategy to reach that goal by setting specific supporting objectives for selected relationships. Engage with others often, Actively express interest in and be credible and interothers to uncover their needs ested in learning about them. as well as their skills and connections; Become an Object of Interest by being honest, engaging, and present; Learn about others and with some sharing about oneself; and Convey value and credibility. Prioritize opportunities to Build a positive reputation offer help, and act on the over time by looking for opportunities to help others, ones with the highest value; acting on the ones that are Exceed expectations by the most valuable for both of delivering on strategic value; you, and consistently exceed- and ing others’ expectations. Build a positive reputation by consistently delivering on your promises.

Six Phases of Strategic Relationships

Dimension Description Sustaining

115

Having the ability, knowledge, or skills to:

Actively help relationships grow by staying in touch and finding opportunities to interact with your valuable contacts.

Actively keep in touch with others to discover opportunities to further relationships; Create touch points with others to broaden relationships; and Routinely assess current relationships and make plans for their future growth. Requesting When you ask for help, frame Evaluate when to request your requests so that it’s easy help to achieve an objective; for others to say yes. Frame requests appropriately; and Provide pertinent and appropriate information based on the request. Capitalizing Encourage key long-­term Create and pursue opportunirelationships to grow in ways ties that encourage both you that benefit both of you. and others to grow in mutually beneficial ways; Set long-­term personal development goals based on your relationships, and evolve your relationships beyond business to meet those goals; and Foster personal growth by continually learning from and teaching others.

Chapter 4

Strategic Relationship Planning in Your Organization

I

n the previous chapter, I focused on your relationship-­development efforts to become more intentional, strategic, and quantifiable. The Six Phases give you an overarching road map of what needs to happen for you to identify, build, nurture, sustain and ultimately capitalize on your portfolio of relationships. In this chapter, I want to focus on the how. This chapter should help you better understand, beyond your efforts, how a team or organization can leverage its broad base of business relationships to move key strategic priorities forward. Most professionals agree that relationships are essential; few bother to measure or leverage them to their full potential. Even though every organization creates an annual sales plan—­in which it crafts a go-­to-­market strategy, I’ve yet to find one that says, “For us to reach our key goals and objectives, we need to focus on an authentic and mutually valuable relationship with these specific individuals, and here is our game plan over the next four quarters to get there.” Even with marquee clients, I consistently see individuals and teams confuse their strategy and planning. Specifically, they prioritize relationships for an upcoming deal when focused on revenue growth within their named accounts, geographic territories, or global account management efforts. Similarly, competent project teams focus on “what we should do and how we should do it” and seldom on “what relationships do we need to go beyond implementing to sustaining for its long-­term impact and lasting change?” Business school graduates, organizational onboarding, and management development campaigns

117

118

Relationship Economics

seldom focus on strategic relationships as a sustainable differentiator over the horizon. Sociologists tell us that an average individual can manage between 100 and 150 relationships. How do you know which ones to nurture? If you believe my notion that relationship development (versus transactional networking) is about investments you choose to make, how do you select which relationships to invest in? You can’t invest in everyone equally, so how will you balance relationship creation and bridge the most relevant early relationships to capitalization? Planning is the extrapolation of the present. Specifically, what am I doing today, and how can I do more of what works? In the revenue growth example above, the organization evaluates its portfolio of products and services, market challenges, opportunities, and go-­to-­ market resources like the sales force and marketing operations to plan a revenue target. It then divides that target among its sales force, so Steve, who has a geographic territory or a handful of named accounts, will have to generate $10M in top-­line revenue as his quota for next year. Steve then starts to panic because he generated only $7M in sales this year; he decides which accounts, transactions, and, thus, relationships he needs to reach his new target. What Steve and his organization are thinking about are their existing relationships, which is a limited universe for many, compared with anticipated or, better yet, created relationships (Figure 4.1).

Figure 4.1  Existing, Anticipated, and Created Relationships

Strategic Relationship Planning in Your Organization

119

On the other hand, strategy is painting a picture of the future and developing a path to get there. Think of John F. Kennedy’s proclamation of a moon landing in 10 years; as he spoke, no American had spent even 15 minutes in space. Think of extraordinary leaders joining an organization and developing their vision of its future. They quickly nurture intracompany and external relationships to recruit top-­ notch talent, fuel the vision and mission with the necessary resources, and establish priorities to bridge the current state to the desired future state. Relationship strategy works the same way. What does that vision look like? A much bigger universe encompasses existing relationships and those you’ll need to pursue. Unprecedented growth from return on your strategic relationships is derived from developing a relationship strategy focused on your future path. As with any strategic initiative, the planning process is considerably more valuable than the actual plan itself. In this chapter, I discuss the process of creating a personal, team, and organization-­ wide Strategic Relationship Planning (SRP)™ (Figure  4.2), including the following key steps: • Relationship-­Centric Goals—­business goals that you simply cannot achieve alone and must develop and nurture critical relationships to attain; • Relationship Bank—­existing relationships, with their diversity and quality as vital as the sheer quantity; • Pivotal Contacts—­highly influential individuals you must seek to develop because they are instrumental to your future success; • Relationship Currency Exchange—­the promised and delivered value in the favor economy; • 30-­, 60-­, and 90-­day Personal Action Plans—­who will you prioritize, how will you reach them, what can you bring of value to them, and what will you ask in return? How can you plant seeds for your growth journey, and how will they be better off because they’re in a relationship with you?

120

Relationship Economics

Figure 4.2  Strategic Relationship Planning (SRP)™

Fundamental Flaws in Strategic Planning In 1972, Richard Rumelt, a strategy professor at UCLA’s Anderson School of Management, became the first person to uncover a statistical link between strategy and profitability. He concluded that moderately diversified companies outperformed more diversified ones—­a finding that has persisted through more than 50 years of research. His 1991 paper “How Much Does Industry Matter?” highlights the fact that neither industry nor corporate ownership can explain the lion’s share of differences in profitability among business units.1 In short, he reinforced the notion that being exceptional at what you do matters a lot more than any particular industry you are in. Compare that to the conventional wisdom of the 1980s, that an organization generates strategic plans at a business unit level and subsequently rolls up those plans like a portfolio for the company’s senior management. In recent years, much of the strategy work has again become centralized. According to Rumelt, most corporate strategic plans have little to do with strategy. Instead, they are three-­to five-­year rolling resource budgets and guesstimates of market share, and they may create the false expectation that a coherent strategy will emerge from this exercise.

 Richard Rumelt, “How Much Does Industry Matter?” Strategic Management Journal 12 (1991): 167–185. 1

Strategic Relationship Planning in Your Organization

121

Let’s look at 10 common traits of flawed strategic planning in many organizations: 1. Strategy is an event! Most organizations create an annual strategic planning event, a multiday process where executives gather with lofty goals and the best intentions to develop the organization’s strategy. The group leaves the event with several key objectives and no time spent connecting these objectives to dynamic changes in the industry, the required internal capabilities, or the evolution of the industry/market dynamics. 2. Strategy is reserved for the few executive ranks. The strategic priorities are devised at an event reserved for, and controlled by, elite executives. They believe that strategy is too complex for the rank and file to comprehend or integrate into organization-­wide processes, tools, and operations. 3. Strategic plans quickly become outdated. Many strategic plans heavily rely on data. After months of research and analysis, the strategic plan is delivered in a spectacular death by a PowerPoint deck utterly void of the rapidly changing market, consumer, employee preferences, behavior dynamics, and predictive intent. The strategic plan is based on stagnant and inflexible lagging indicators rather than leading drivers. 4. Strategic plans are disconnected from the organization’s potential or culture. Since positive cash flow is the fuel enabling organizational growth, many strategic plans, focused only on financial outcomes, never issue a rallying cry to excite the culture to reach new heights. A mission may motivate, even inspire, the team to pursue meaning in work and avoid distractions, especially those they can’t control, such as inflation or geopolitical conflicts. 5. Strategic focus is not transparent, shared, or discussed. Unlike mission statements or other grandiose proclamations by company executives, strategic plans are seldom socialized, broadly visible, or transparent across the organization. They

122

Relationship Economics

have, therefore, little chance of becoming understood and integrated into daily meetings and conversations. Because employees do not understand the strategic execution, they do not believe in it. It’s never part of the organization’s cultural fabric. 6. Strategic plans are void of key outcomes, metrics, and milestones. Most organizations use key performance indicators (KPIs), objectives and key results (OKRs), or other goal measurement tools. These metrics, however, are not aligned with the strategic platform, focus, organizational structure, available resources, current internal competencies, or any definitive set of milestones. 7. Strategies are disconnected from actions to succeed. In the traditional strategic planning process, executives outline several strategic objectives. These objectives are then emailed to the rest of the company without helping the people responsible for executing the strategy realize how it impacts their job. Hence, they miss the outcomes and focus primarily on their individual outputs! This disconnect between strategic development and actions necessary to succeed reduces the effectiveness of every strategic execution. 8. Key people responsible for executing the strategy are in the wrong roles! Every one of us has an innate desire to succeed, and our evolutionary nature is to accomplish something hard. To keep things simple and easy, perhaps to avoid potential conflicts or risk their employee NPS ratings, many leaders fail to challenge their teams to pursue and accomplish significant outcomes. Key individuals, team managers, or even leaders responsible for executing parts of the strategy don’t believe in the vision, don’t want to pursue key priorities, or are simply incapable of getting the organization to its desired state. If the organization has a culture of coasting, they’ll stay until their retirement with little value created over decades of draining the organization of its resources. 9. The process of tracking strategic outcomes is not structured or repeatable. The same few executives sometimes

Strategic Relationship Planning in Your Organization

123

discuss strategies arising from the annual planning event at a quarterly strategic update. Unfortunately, a structured reporting process is seldom integrated into the company’s operations, so there’s usually not one that’s shared, discussed, and captured in a repeatable process or any kind of a system to deliver the aspiring set of outcomes. 10. Strategic plans are seldom socialized with key relationships. If you think of the ecosystem in which the company thrives, key relationships are critical to that strategy’s success. Customers, distribution partners, and supply chain vendors are just three examples of key relationships often in the dark about where the organization is going and how they plan to get there. One can understand the confidential nature of any strategy or the company’s set of prioritized pursuits. I believe it’s a mistake not to discretely share those with peer execs in a few key organizational relationships. If your strategy begins with identifying changes in your environment, then reviewing changes in your available and forthcoming talent pool, the enhanced or diluted value of your brands, and the diversity and quality of your critical relationships—­your soft assets—­must precede developing strategies for exploiting market changes. Key talent trends such as the Silver Tsunami may have a long-­term impact on your ability to execute your current strategy, expand into tangencies, or explore new markets. Add the politicizing of vaccine mandates in the United States, and organizations are forced to reimagine or reinvent work or develop new processes to capitalize on their soft assets before losing them. Consistently reevaluating the organization’s strategic relationships helps create clarity in an increasingly uncertain world. Ambiguity, chaos, and disruptions to the status quo are often the gateway to net new growth opportunities. If you are uncomfortable with uncertainty, you can observe first-­mover success factors by both known competitors and new entrants. Others take a first-­mover position and ascertain their critical success factors. Although you’ll minimize risk, you will also miss the early knowledge at the edge where real innovation happens.

124

Relationship Economics

Traditional strategic planning is fundamentally shortsighted. The budget process intervenes, and although the common ambition may be a five-­year strategy, egos and competing priorities in the room tend to focus on the following four quarters. So, in a scramble, most managers aim to secure the resources they need in the coming year and kick the proverbial can down the road on more challenging choices. The outcome of these games is often the all-­too-­familiar hockey-­stick projection of future success after the initial investment dip in the short-­term budget. In their book Strategy Beyond the Hockey Stick: People, Probabilities, and Big Moves to Beat the Odds (Wiley, 2018), three McKinsey partners, Chris Bradley, Martin Hirt, and Sven Smit, address the real problems with most strategic planning: the social side, rising from corporate politics; individual incentives; and human biases.2 They examined the publicly available information on dozens of variables for thousands of companies and found factors that explained more than 80 percent of corporate performance.

Strategic Relationship Planning (SRP) Let’s apply a few lessons from the digital transformation in most organizations during the pandemic to the broader topic of business relationships (Figure 4.3). You’ll see that a winning relationship strategy requires new twists to familiar past tactics. Strategic relationship planning (SRP)™ is the process of transforming an organization’s most valuable relationships into quantifiable performance, execution, and results. It amplifies winner-­takes-­most dynamics and further separates leaders who lead with their organization’s relationships. Companies that heavily invest in their hybrid business relationships—­ digitally, physically, and globally—­ and intimately integrate those relationships into their business models accelerate their growth and profitability.

2  Chris Bradley, Martin Hirt, and Sven Smit, “Strategy to Beat the Odds,” McKinsey Quarterly, February 13, 2018, https://www.mckinsey.com/business-­functions/strategy-­ and-­corporate-­finance/our-­insights/strategy-­to-­beat-­the-­odds

Strategic Relationship Planning in Your Organization

125

Figure  4.3  Pre-­and Post-­Pandemic Lessons Applied to Business Relationships

126

Relationship Economics

Here are five iconic relationship strategies and how the post-­ pandemic world can change the game: 1. Relationship Differentiation—­Great products, compelling services, and business value have become table stakes. These differentiations accounted for a strong margin advantage a decade ago versus industry peers. In the post-­ pandemic world, new products, services, and exponential value are co-­created with customers, partners, and unlikely relationships (such as competitors) at an accelerated pace, delivered digitally, to pursue new opportunities. 2. Relationship Productivity—­Selling, general, and administrative (SG&A) activity—­a strong indicator of the organization’s market reach in its relationships—­ was considered overhead a decade ago, and concerns were abundant if the organization weren’t in the top  20 percent relative to its industry. Now SG&A is becoming an investment consideration with digital as an enabler of greenfield attack opportunities versus highly efficient industry incumbents. More on MarTech and RevOps as predictors of relationship behaviors in our Nour Forum community (NourGroup.com/ Forum). 3. Relationship Investments—­A decade ago, businesses worried if their capital expenses as a ratio to sales exceeded 1.7 times the industry median. In the post-­ pandemic world, organizations have two options—­invest big in key strategic relationships (think tech assets) or go capital-­light and risk creating gaps for competitors to capture some of your organization’s most valuable business relationships. 4. Relationship Resources—­ A decade ago, it was ideal to spread over 50 percent of the capital spent evenly across the organization’s different business units. Through the pandemic, we saw astute leaders reallocate resources faster to ensure they’re aligned with the most promising strategic relationship growth opportunities.

Strategic Relationship Planning in Your Organization

127

5. Strategic Relationship Mergers, Acquisitions, and Divestitures. A decade ago, most organizations spent much time on smaller M&A deals amounting to less than 30 percent of their market capitalization. In the post-­pandemic world, astute organizations are focused on fewer strategic acquisitions to dramatically expand, enhance, or otherwise elevate their capabilities and culture, and embark on a very different and programmatic M&A of relationships forward.3 The pandemic required leaders to manage their organizations’ internal and external relationships differently. At the onset, Cees’t Hart, CEO of Denmark’s Carlsberg, instinctively recognized an occasion to explore providing greater autonomy in his global management structure. To develop and implement a strategy in the face of countless questions amid the crisis, he concluded that regional leaders, on the ground, with the power to act fast, needed to make decisions.4 SRP can be focused on internal relationships. By flipping their hierarchies and learning to listen in a new way, even large, complex, legacy organizations could adapt to the nature of the pandemic crisis through alignment of relationships, strategic agenda, and autonomy to act. How? Through these five behavior shifts regarding their most significant asset: their intracompany relationships! 1. Mindset Shift—­Relationships from Transactional Doers to Strategic Thinkers. The pandemic brought much-­needed agility to think and do with timely information on the street vs. a distant and disconnected boardroom. This shorter distance between decision and action (and vice versa) transformed immediate market changes into strategic decisions through key relationships on the ground. 3  Simon Blackburn, Jeff Galvin, Laura LaBerge, and Evan Williams, “Strategy for a Digital World,” McKinsey Quarterly, October 8, 2021. Corporate Performance Analytics by McKinsey, https://www.mckinsey.com/business-­functions/mckinsey-­digital/our-­ insights/strategy-­for-­a-­digital-­world

  Carlsberg 2020 Annual Report, https://www.carlsberggroup.com/media/42542/ carlsberg-­group-­annual-­report-­2020_final.pdf 4

128

Relationship Economics

The pandemic forced many organizations to move their key reports from strategy implementors to strategy integrators or even co-­creators (Figure  4.4). Smaller new initiatives allowed key relationship links to focus on the most significant decisions, actions, and outcomes.

Figure 4.4  Moving from Tactical to Strategic Relationship Development

2. Communication Shift—­Fewer Presentations/More Conversations. Working from home (WFH) was not new to many knowledge workers. The pandemic, however, made it a grand experiment for over 100  million workers and forced many leaders to rely on a more frequent and highly personalized communication style. Astute relationship-­centric leaders understood that this didn’t mean more town hall meetings, ask-­me-­anything presentations, or memos on management decisions. Instead, it meant more conversations—­the best kind—­ one-­on-­ones! Internal SRP is about engaging relationships in peer-­to-­peer discussions about strategic initiatives. These conversations uncovered the need to upskill, reskill, or redeploy key talent to adapt to constant disruptions. Different skills, knowledge, and behaviors from the global

Strategic Relationship Planning in Your Organization

129

corners of the organizations came together. In small one-­ to-­ few and one-­ to-­ many gatherings, their possessors asked great questions, shared real-­ time learnings, and focused their relationships on the most significant possible impact. 3. Problem-­Solving Shift—­From Known Answers to Undiscovered Questions. Let’s agree that Microsoft Teams, Zoom, GoToMeeting, and most other tech platforms we used during the pandemic to engage our relationships were never designed to support strategic discussions, problem solving, and decision making. The shift from a top-­down to a more integrated management style of problem solving required a new way for leaders to gather information from their most strategic relationships. They had to discuss strategic topics with a micro-­sample of employees and capture key insights and needs from those closest to customers in key markets. Without all the answers, relationship-­centric leaders used SRP to help their key relationships ask the most important questions. By democratizing questions, they allowed relationships across the globe to help one another and come up with the answers, signaling that strategy is everybody’s business in today’s world. And relationships are the connective tissue to shape leadership’s approach to executing critical solutions. 4. Leadership Shift—­From Formal and Distant to Informal and Actionable. The pandemic demonstrated that one-­on-­ one conversations uncovered which relationships they turned to, beyond the traditional hierarchy, for real-­time answers. As a result, informal knowledge management sources emerged, making learning a strategic driver and helping astute leaders tap into organization-­wide relationships for digital, cultural, organizational, and strategic transformations. The real-­time insights from the edge of the business also gave these relationship-­centric leaders opportunities to think, quickly adapt, and outpace their competitive peers in implementing innovative ideas in untapped markets.

130

Relationship Economics

5. Decision-­Making Shift—­From Opaque Feedback to Real-­Time and Highly Transparent Feedforward. The strategy should be the living, evolving, constantly adapting DNA of every organization. That can’t happen without leaders’ access to the experiences and opinions of those the strategy most impacts. Instead of dinosaur leadership where executives decided and sought feedback whose final destination remained a mystery (remember those useless suggestion boxes in many 1990s corporate lunchrooms?), the pandemic forced two-­ way conversations amongst vastly diverse relationships. The sea change in the way people understood real-­time priorities, delivered on the strategy, saw immediate results, and communicated those learnings, which became feedforward—­actionable, transparent, “Here is what to do when you see a similar challenge or opportunity,” or “Here is what worked and what didn’t” External to the organization, SRP is designed to help you identify key market opportunities and the resources you will need to meet your Relationship-Centric Goals. Planning enables an individual to achieve business goals and objectives and should be tightly aligned with the organization. Strategic relationship plans are driven by the efforts and analysis of individual relationship investments. SRP is the forward-­ looking perspective that drives your mindset, tool set, and road map.

Design Thinking, Systems Thinking, and Visual Storytelling For several years, our creative director, Lin Wilson, and I have taught a strategy visualization course at the Goizueta Business School’s Executive Education program. It’s a master class at the intersection of design thinking, systems thinking, and visual storytelling. While the three subjects have been around for some time, I believe the best Strategic Relationship Planning efforts to integrate key elements of each will prove particularly important in the post-­pandemic era. So let’s take a closer look at their intersections.

Strategic Relationship Planning in Your Organization

131

Strategic Focus through Design Thinking COVID’s multifaceted challenges forced many organizations to reexamine their strategic priorities. For SRP to create impact and value in any organization, key leaders must strengthen business relationships up, down, and across the organization. Design thinking’s highly collaborative and immersive approach lets you gather broad perspectives on the same scenario. By engaging diverse elements of the team, you can build viable solutions for possible challenges and opportunities. Diverse perspectives are the edge design thinking can bring to your lens on strategic relationships. It allows you to open up ways for relationship development and to nurture strategies to be implemented or enhanced in understanding the ecosystem in a complex and co-­creative way. The stages of design thinking—­ empathize, define, ideate, prototype, and test—­are very similar to how you build impactful business relationships over time (Figure 4.5).

Figure 4.5  A Nonlinear Design Thinking Approach

132

Relationship Economics

Through immersion, analysis, ideation, prototyping, and implementation applied to key relationships, you gain a unique understanding of the context of each relationship—­more specifically, you can see how the relationships are relevant to organizational priorities and analyze each relationship’s relevance, design, and test value-­creation, observe the ongoing interactions, and implement critical initiatives with specific desired outcomes. Pilot initiatives with key relationships will highlight their strategic longevity (is this a transactional relationship or possibly a transformative one?). From early interactions, you can generate new business ideas, business models, and new growth strategies. For example, a new distribution partner, an extension of your product portfolio, or the application of your product/solution in previously unrecognized market needs. Through a design thinking process, you’ll uncover that many business relationships are an opportunity to learn, motivate, and stimulate commitments from relationships in the execution of the organization’s key objectives. Strategic relationships become the connective tissue across the organization’s disparate parts. SRP is most impactful if you begin with the end in mind—­what organizational challenge or opportunity do you need to address? Specific relationships critical to success can help you collect vital information in your early due diligence process if you can succinctly capture your desired outcomes. Answers to complex questions that move from what’s happening in your market to why (root causes) can help investigate the context through a research plan and evaluation scenarios. The right employees, channel/distribution partners, customers, investors, media people, or analyst relationships who demonstrate a vested interest in your success can provide their unique lens early in the process. With an apparent problem to solve, you can now begin to analyze the most relevant business relationships based on their past experiences, shared values, and strategic vision. We’re particularly fond of visual tools, such as frameworks or mind maps, to capture current workflows or interactions between disparate parts of the organization or the market ecosystem at large. These visualization efforts set the stage for dramatically more powerful ideation sessions—­creatively vs.

Strategic Relationship Planning in Your Organization

133

restrictively. In addition, multiparty strategic collaboration becomes invaluable here, as we’ve witnessed in our co-­creation workshops. Most people don’t equate prototyping with strategic relationships. I’m unsure how else to take creative ideas from discussions with your most valuable connections to the market. We’ve found that when your preliminary due diligence in the immersion phase leads to the generation of ideas, prototyping and testing at any stage in a relationship serve as an iterative solution. This iteration is the exact method you need to adjust expectations and desired outcomes and to gain a realistic perspective of what and how long it will take to accomplish key milestones through and with your relationships. You’ll also learn about their responsiveness, the quality of their commitments, and key individuals in other teams who are fiercely reliable vs. those who just like to hear themselves speak! This nonlinear cycle can be repeated as necessary with multiple strategic relationships to improve your understanding of the context of your challenges. Create a unique value proposition for one team’s relationships. Test another value proposition with another couple. Gauge the one resonating most and create your desired outcomes. Continuous improvement cycles empower prototyping and validate your strategic relationship hypothesis. This way, when you plan your execution, you have the means to maintain and check the micro-­and macro-­objectives and the assertiveness of the processes and tools you use with your relationships to gauge your progress. Periodic evaluations of the strategic relationships further help create alignment, increase understanding of critical roles and responsibilities, and promote accountability for delivering business results. I’m dumbfounded by how many sales organizations do not review their client relationships quarterly. Project leaders seldom conduct a quarterly review of their internal or cross-­functional relationships. Procurement, learning and development, IT, and legal departments are competent in launching initiatives yet rarely invite their vendor partners back for a quarterly review—­not to negotiate a better deal (a highly transactional view) but rather a transformational assessment of the relationship strengths, areas for improvements, and ways to continue elevating results from the strategic relationship.

134

Relationship Economics

Lastly, as I cover competitive differentiation later in this section, you must scan both internal and external influences in the short and long term and focus on your products/services in your market category. Beyond the competitive and market intelligence encapsulated in a strategic focus, in SRP, you must include business intelligence, environmental scanning, and social intelligence, the correlation between behaviors and relationships, as described in the book Social Intelligence: The New Science of Success by Karl Albrecht. Said another way, the business you should be in is about asking better questions about credible and trusted strategic relationships. These sources might be current and prospective customers on an advisory board, industry or functional insiders, and often ignored or underdeveloped cross-­ industry relationships. You must learn from past interactions. What are your blind spots (what is happening now, best practices from other industries, and so forth)? Who in your industry is consistently early in identifying and acting on weak signals and key market trends? You must also examine present relationships. What important factors are you rationalizing away? What are industry thought leaders and mavericks saying and doing? What do your customers and strategic suppliers think? How can you get them to be more candid about what is happening now? Third, you must anticipate constantly changing market dynamics. For example, how can AI/ML engines help you anticipate potential employee churn or a buyer’s intent? Remember, iteration is not innovation. Iteration is doing the same thing better. Innovation is doing new things. Is there a go-­to-­market strategy to dramatically accelerate your traction that you haven’t explored due to current constraints? Competitive advantage doesn’t just shift; it flows. Competitors move faster and faster, and a consistent review of your critical assumptions about your initial strategic focus is essential to long-­term success. Strategic relationships provide the much-­needed independent perspective and unique insights into your pursuits.

Strategic Relationship Planning in Your Organization

135

P&L Viability through Systems Thinking Trending profit and loss (P&L) reports are an essential management tool used by CFOs and analysts to track year-­ over-­ year revenue, expense, and profit trends. The value of such a visual financial report lies in its deep analysis of critical revenue and expense figures, which improves vital decision making and reduces the chance that managers miss important anomalies. Most P&L report data are derived from enterprise resource planning (ERP) systems, budgets, and forecasts. The main categories of a P&L statement include revenue (or sales), cost of goods sold (or cost of sales), selling, general & administrative (SG&A) expenses, marketing & advertising, technology/research & development, interest expenses, taxes, and net income. I’m curious: Which of these categories wouldn’t benefit from strategic relationships? Unique and highly relevant strategic relationships in key P&L areas should make recommendations about the company’s financial strength, attractiveness, and relevance of its products/services to buyers and investors, or opportunities to create value by optimizing its cost structures, revenue streams, or inorganic growth opportunities such as mergers and acquisition. Another powerful lens to view any organization’s P&L is one of time—­ are revenues increasing or decreasing compared to a prior revenue period in each category of products or services the organization offers? Similarly, are the costs of goods sold increasing, thus impacting the business’s net profit margins or its overall profitability? Beyond addressing the what in each of these questions, a more meaningful conversation would entail a more vital understanding of why these trends are taking place and what the management can think about or lead differently to amplify the positive movements and turn around the troubling ones. Understanding one’s actions in the larger context are the definitive illustration of systems thinking. Strategic Relationship Planning is one of my favorite tools to support systems thinking in business. This lens sees the critical resources of a company as capital, its purpose, people, assets, partners, the ecosystem within which it aims to thrive,

136

Relationship Economics

and profits with which it leverages its assets to create and deliver long-­ term value. Leaders are stewards of this highly integrated system with the goal of sustainable value creation that enables the organization to create profits today while ensuring its long-­term viability through its portfolio of relationships. Several systems thinking tools are critical in the successful execution of a strategic relationship plan (Figure 4.6): • In Strategic Relationship Planning, individual relationships are highly interconnected to the stated strategic priorities of the business. • Every strategic relationship should be treated as an ongoing lifecycle journey (think of an infinity loop) vs. one highly transactional, linear path. • Products and services cannot succeed if offered in silos, but rather as an emergence of constantly exceeding new relationship expectations. • The entire organization must act as a sum of its parts, not as individual parts. The wholes create exponential value when someone from finance introduces a sales peer to a classmate who is now a CFO at a prospective customer. • Strategic Relationship Planning demands more than individual situational analysis but rather a synthesis of the entire go-­to-­ market strategy, account-­based relationships, channel partner relationships, geography penetration, industry-­segment share, and social proof. • Lastly, investments in individual relationships cannot happen in isolation. Leaders must view them as a web of complex relationships, prone to unintended consequences when one action creates a ripple effect in the related ecosystem. Startups mature from throwing more people at a problem in their formative years to a more disciplined and systematic approach to codifying decision frameworks. Leaders who grow through the maturity of a startup or those brought in with more seasoning create a system of principles and procedures. These seasoned leaders focus on removing obstacles, scaling the business, and applying talent throughout the

Strategic Relationship Planning in Your Organization

Figure 4.6  P&L Viability through Systems Thinking Source: Inspired by Leyla Acaroglu.

137

138

Relationship Economics

organization to deliver consistent performance. Similarly, systems thinking can help with a more disciplined approach to Strategic Relationship Planning. Here’s how: • Problem Solving. Today’s accelerated complexity of many organizations and industries requires more than an experienced leader in a specific domain. Although experience is valuable in helping discern patterns and diagnose problems quickly, not much in our world is traditional. Previously unforeseen complex problems, which resemble no known pattern, create a blind spot and make many leaders complacent about their understanding of the problem. Strategic Relationship Planning broadens a leader’s periphery by defining the fundamental problem at the onset. Strategic Relationship Planning should provide an in-­depth analysis of the context for an accurate account of the facts and a broad sense of curiosity to ask more meaningful questions to uncover the root cause of the problem. In every subsequent step, from generating options to evaluating impact vs. effort, decision making, and execution of the plan, systems thinking via your strategic relationships can accelerate your path from a defined problem to its viable solution (Figure 4.7).

Figure 4.7  Accelerated Path of a Defined Problem to a Viable Solution

• Proactive Talent Management. Likeability, trust, and respect are fundamental to every business relationship. This point could not be more critical within the organization. Like a dysfunctional family that imagines its internal troubles are hidden, a company’s dysfunctions are seen by outsiders. Earned respect and trust are the foundation for an effective

Strategic Relationship Planning in Your Organization

139

strategic relationship plan. If teams don’t observe transparency, vulnerabilities in their leaders, and each going out of their way to have the other’s back, anything more to build relationships inside the organization won’t matter—­you’re building on quicksand. When you do establish a solid trust-­ centric foundation, you can move to nurture the strengths of your relationships and create stretch goals to encourage their personal and professional growth. As I’ve learned from Thinkers50 colleague and friend, Professor Amy Edmundson, creating an environment of psychological safety is next, by letting teams know that success is theirs and failure, their leaders’. The strategic relationship plan must convey a sense of greater purpose as the connective tissue (Figure 4.8).

Figure 4.8  Proactive Talent Management Required within Strategic Relationship Planning

• Influence without Authority. Strategic Relationship Planning heavily depends on brand equity—­that of the team leader, the organization’s reputation and credibility, and the perceptions of the relationships the planning effort is attempting to engage. You must appeal to their logical self-­interest to influence those over whom you have no power or structural authority. Sharing successful outcomes by others who embarked on a similar journey to the one you’re proposing creates a logical connection between that outcome and the relationship’s current conditions. For example, in the same way that a trial attorney aims to persuade a jury to decide in her favor by presenting evidence, perspectives, and witnesses, you must reason logically and draw references to past successes to support your assertions. Logic, association with like-­ minded professionals, and an emotional connection to the

140

Relationship Economics

Figure 4.9  Influence without Authority

outcomes are often the best default influencing tools in Strategic Relationship Planning (Figure 4.9). • Negotiations. Strategic Relationship Planning displays a phenomenon we see elsewhere: the side that least needs the outcome has the upper hand. While conventional wisdom asserts that the best way to win a negotiation is the willingness to walk away, strategic relationships look for common grounds and co-­create experiences that set the context for forging ahead. Luxury brands immerse you in an experience that elevates reasons by associating aspirational emotions and prestige with a purchase. Real estate professionals masterfully narrate the lifestyle associated with buying a specific home. Seasoned recruiters link base compensation with upside potential to align the right talent with the relevant value creation opportunity. In each of these roles and the Strategic Relationship Plan Blueprint discussed in the next section, creating a narrative of the relationships from now to next establishes a shared understanding. Always aim to create a win-­win sense of fulfillment in every relationship to demonstrate that concessions and commitments create value. Then, follow through (a process) with action to yield immediate and

Strategic Relationship Planning in Your Organization

141

Figure 4.10  Follow-­Through in Strategic Relationship Planning

substantial benefits to your relationships to cement the value promised (4.10). Systems thinking is relevant to Strategic Relationship Planning, as it opens your mind to skills and behaviors beyond your own and your team’s. When that team is focused on a shared mission, vision, or enemy, it moves in concert, communicates proactively, and carefully chooses relationships to invest in. It creates, in essence, a system that is relevant to a broad spectrum of possibilities. Along the way, the team leader and each member become dramatically stronger problem solvers, proactive managers of talent, influencers without authority, and negotiators of the best choices for the best possible outcomes. Codifying a system for your strategic relationships is the path to developing and delivering a world-­class strategic relationship plan.

Real Innovation through Visual Storytelling According to McKinsey, 84 percent of business executives are doubling down on corporate innovation during the pandemic to accelerate their growth trajectory.5 However, less than 6 percent say they’re satisfied 5  “McKinsey & Company on Growth and Innovation,” https://www.mckinsey.com/ business-­functions/strategy-­and-­corporate-­finance/how-­we-­help-­clients/growth­and-­innovation

142

Relationship Economics

with their businesses’ innovation outcomes. To a large extent, this blatant disconnect can be attributed to the overreliance on the intellectual understanding of innovation and what it takes to innovate. When most leaders measure their success by their organization’s financial performance, is it surprising that the trending P&L mentioned earlier reigns supreme? Strategic relationships suffer from the same shortsighted mindset. Although this seems to be understood as critical, look beneath the grandiose statements about the strategic value of their relationships; you’ll find empty promises, political jockeying, good people in roles beyond their capabilities, outdated measures, compensation models, and promotion of responsibilities based on assumptions and agendas. In his book The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google, NYU Stern School of Business Professor Scott Galloway explains his T-­Algorithm as strategies that define trillion-­dollar firms. Among the eight strategies is visionary storytelling, where he shares examples of visionary leaders who “deploy fiction (i.e., story) that captures imaginations and capital to pull the future forward and turn rhyme into reason.”6 He believes these leaders have mastered the art of predicting the future by making it so. Strategic Relationship Planning requires real innovation with visionary and highly visual storytelling. Unfortunately, as many organizations scale, they begin to prioritize processes and products over relationships. This inward focus impedes real innovation, leading many outside consultants to “Reorganize”(Steve Blank in his Harvard Business Review article terms this “Organization Theater”), adopt trendy Band-­ Aids such as hackathons (“Innovation Theater” or attempt to reform their bureaucratic (dysfunctional?) behaviors through transformation (“Process Theater”).7 Instead, many organizations desperately need the 3Cs: courage by the CEO and board to think and lead differently, commitment to see the long tail of innovation impact the business

 Scott Galloway, Section4 Online Training, The Business Strategy Sprint, 2022, https://www.section4.com/courses/disruption/business-­strategy-­sprint 6

  Steve Blank, “Why Companies Do “Innovation Theater” Instead of Actual Innovation,” Harvard Business Review, October 7, 2019, https://hbr.org/2019/10/why-­ companies-­do-­innovation-­theater-­instead-­of-­actual-­innovation 7

Strategic Relationship Planning in Your Organization

143

through culture and processes for real innovation, and a construct to get there. The pandemic has accelerated many trends by decades and continues to refine entire industry sectors. From health care and education to transportation and e-­commerce, all will soon be disrupted as the market rewards real innovators like Elon Musk with massive valuations for Tesla. Tesla’s valuation exceeds that of Toyota, Daimler, Volkswagen, and Honda combined, even though it manufactured only 400,000 vs. 26 million cars by the other four in 2020.8 Ecommerce’s share of U.S. retail, which had been growing by 1 percent every year, jumped by 11 percent within eight weeks of the pandemic hitting the United States.9 Broad industry sectors are witnessing market consolidation around innovators with solid balance sheets, high-­value assets, cheap debt, and low fixed costs. In many instances, a company’s survival heavily depends on its health and position within the sector. The Brand Age, where companies sold mass-­produced products for irrational margins by creating emotional associations through advertising, is quickly ending. The Product Age powered by online discoverability is accelerating, thanks to digital ads, influencer campaigns, and peer reviews—­all examples of visual storytelling. In the coming decade, Amazon, Google, Facebook, Apple, and Microsoft’s market dominance will grow stronger. Big Tech makes up an estimated 21 percent of the value of all publicly traded companies.10 Big Tech companies leverage their market dominance to create virtuous cycles that generate growth without proportional costs. Besides rapid delivery, Amazon Prime offers video streaming to increase the time spent on its platform. Apple dominated the wearables 8  Michael Wayland and Lora Kolodny, “Tesla’s Market Cap Tops the 9  Largest Automakers Combined,” CNBC, December 14, 2020, https://www.cnbc.com/2020/ 12/14/tesla-­valuation-­more-­than-­nine-­largest-­carmakers-­combined-­why.html

 Stephanie Chevalier, “E-­Commerce as Percentage of Total Retail Sales in the United Statesfrom2013–2025,”Statista,https://www.statista.com/statistics/379112/e-­commerce-­ share-­of-­retail-­sales-­in-­us/ 9

 Nicolas Vega, “Microsoft’s Market Cap Grew More than $800 Billion in 2021,” CNBC,December 27,2021,https://www.cnbc.com/2021/12/27/how-­much-­the-­biggest-­ companies-­grew-­in-­2021.html 10

144

Relationship Economics

business (Apple Watch, AirPods, and AirTag) with $20 billion in revenue in 2019 because its customer lifecycles connect phones, watches, and wearables, an advantage that leaves Rolex and Bose noncompetitive.11 Big Tech has transformed entire industries into features. Amazon has outperformed FedEx and made the delivery industry into a Prime feature. The media industry, worth hundreds of billions of dollars, will become a customer acquisition vehicle for Apple and Amazon’s core business. These astounding outcomes result from real innovation via visual storytelling: compelling narratives placing customers at the heart of the story, engaging a target audience with emotional visual experiences, influencing decisions along their journey, and empowering customers to change their lives. A team of MIT neuroscientists has found that the human brain can process entire images seen for as little as 13 milliseconds.12 When remembered and repeated, the visual story significantly contributes to the Product Age referenced above. Visual stories accelerate traction, engagement, and influence when that product is a relationship, and real innovation demonstrates stronger outcomes.

Strategic Relationship Plan Blueprint Now that we’ve covered the strategic value of design thinking, systems thinking, and visual storytelling, let’s apply these to a blueprint of a strategic relationship plan. In our global advisory work, we modify this canvas based on the nature of the client’s business, key industry trends, and the strategic relationship quarterbacks who will lead the execution of these plans. Any such plan should be reviewed regularly to achieve critical milestones and its ongoing strategic viability. You should also identify an accountable peer and consistently communicate with them on your respective progress. Finally, develop a board of advisers for discussing the more challenging strategic relationships.  “Consumer Enthusiasm for Wearable Devices Drives the Market to 28.4% Growth in 2020, According to IDC,” IDC press release, March 15, 2021, https://www.idc.com/ getdoc.jsp?containerId=prUS47534521

11

 Anne Trafton, “In the Blink of An Eye,” MIT News, January 16, 2014, https://news .mit.edu/2014/in-­the-­blink-­of-­an-­eye-­0116

12

Figure 4.11  Strategic Relationship Plan Blueprint

145

146

Relationship Economics

Let’s take a closer look at each of the six key sections of the Strategic Relationship Plan Blueprint (Figure 4.11).

Section 1: How We Engage with Key Relationships In this first section, two complementary forces come together. They’re the critical roles/realm of responsibilities on both sides that will influence each other to elevate the relationship in serving the needs of the target market or customer segment. Start with people at your level who can follow through with agreements. They should be able to remove obstacles, marshal additional resources, get buy-­in across the organization, make one phone call, or send one email to get things done. They’ve earned the respect of their peers through their accomplishments. The blueprint is more than a strategic-­account selling process between buyers and sellers or a project plan between internal resources. It is an intentional and strategic attempt to deepen authentic and mutually valuable relationships so that both sides feel that they’re profoundly enhanced because of each other. Key roles here include: • Executive Sponsors—­If the relationship is truly strategic, it will need executive-­level awareness, accountability, and guidance through respective organizational bureaucracies. If you can’t get executives from both sides to sponsor the relationship, do not move forward. Your initiatives will likely get stuck, defund, and frustrate the key stakeholders you need to succeed, and you’ll do more damage to the relationship than the status quo is doing. • Relationship Quarterback (or Captain)—­Relationships are NOT between logos, buildings, or inanimate objects! They’re always between individuals, and every strategic relationship needs a single point of contact to lead each organization’s strategy and execution. They’re wholly responsible for the relationship’s outcomes. So, again, if you don’t have this, can’t get it, or can’t consistently deliver value in the role, do not proceed.

Strategic Relationship Planning in Your Organization

147

• Key Stakeholders—­Beyond the executive sponsors and the relationship quarterbacks, there are often other key stakeholders on both sides who will need to be involved as you move this relationship to greater heights. Perhaps the head of products, marketing, or professional services? These roles may not be clear from the onset, but you’ll need to identify the jobs to be done to create and sustain lasting value in the relationship. Remember the adage “You don’t just marry the person; you marry their whole family”? These roles are that entwined in the overall success of the relationship.

Section 2: Why This Relationship Is Strategic and the Measure of Our Success Most business relationships begin with the greatest intentions. Good people come together to “partner” and focus on the most pressing tactical priorities—­ this meeting, that checklist, these challenges, and those opportunities. What the partnership often lacks—­which can precipitate its demise as one or both sides lose motivation, resources, key stakeholders, or get distracted with the next shiny object—­are two critical foundations: 1. Our Why—­If the teams on both sides aren’t transparent about this relationship being strategic and worthy of ongoing investment, nurturing, and sustainable commitment, it will be transactional and short-­lived at best, disastrous at worst. Our Why conversations could include opportunities to accelerate real innovation, address a pressing market need neither side can serve alone, or accelerate traction with key initiatives. Alternatively, it is ideal if the relationship can elevate the potential success of the outcomes together, eliminate redundancies and reduce cost, risk exposure, or human capital required. Without a compelling explanation of why this relationship is strategic to our long-­term success, the two sides will miss a much-­needed lighthouse to overcome inherent relational obstacles, distractions, and the need to move with a purpose over time. If both sides aren’t crystal

148

Relationship Economics

clear on why they’re willing and can equally, consistently, and impactfully invest in the relationship, there is no point in moving forward. 2. Metrics That Matter—­If we expect the outcomes to be dramatically better or more impactful, we must be explicit in our goals and the measures we’ll use for success. Here full disclosure on the pertinent metrics comes in. You and your strategic relationships should disclose how you’ll measure your progress and the success of the relationship investments. Is it revenue, market share growth, time to results, reduced expenses, and accelerated R&D in bringing a new product or service to the market? I’m allergic to vagueness and have always believed that specificity conveys credibility. So get busy capturing several leading drivers (vs. lagging indicators) of success. What metrics matter most to you, your team, and your organization? How will you know you’re on the right track? What will you show for the return on your relationship investments?

Section 3: What Is the Current State of Our Relationship? The journey must begin with a baseline assessment of the relationship. Candidly share what’s going well and what isn’t. Reflect on where you’ve captured, developed, and delivered significant success in qualitative and quantitative terms. I wouldn’t go back more than 24 months to highlight value-­creation successes. Similarly, don’t reopen old relational wounds regarding missteps, mishaps, or past bad behaviors. I would avoid rehashing scenarios involving individuals no longer with either team. There is no value in speaking ill of others; put that energy into moving the relationship forward. Ensure that both sides understand what past successes and learning moments look like and the root cause of each. If the relationship created a successful result, could we sufficiently capitalize and build on it? If not, why not? If it was a misstep, how did we recover and move forward? Remember, specificity drives credibility. The more specific your answers, the more likely you

Strategic Relationship Planning in Your Organization

149

are to capture the essence of the value of each relationship and identify specific behaviors that led to its perceived success.

Section 4: Who Are Our Ideal Customers and Market Opportunities? You may recall from the earlier design thinking section that successful organizations put customers at the center of all they do. They believe that delighting customers is not only the mission of their business today but also the critical success factor in their long-­term relevance and ability to thrive in challenging circumstances. This section focuses on two critical components. 1. Customers We Can Better Serve—­ Customers can be internal (think of a project team deploying a new process or system) or external. A customer can also be a channel partner or a distributor, an international market, or some segment of our customer base we’ve yet to penetrate, want/ need to garner more significant mind share or wallet share, or an emerging customer segment opportunity. Get granular here and clearly describe customers you can better serve through this strategic relationship. For example, consider using a story here with texture, “Imagine Joe, a chief information security officer (CISO) who’s struggling with the business justification of his investments in security infrastructure. What if we could create a security scorecard that would give him and his board audit committee a dashboard of their security posture?” 2. Market Opportunities We See—­There’s a good chance that Joe, in the example above, isn’t alone! You don’t want to create one-­offs, so this section should be a hypothesis you aim to test with your customers. Your preliminary due diligence should uncover market gaps and solutions that are workarounds or aren’t the right fit. You may find that some customer experiences are outdated, inefficient, or ineffective,

150

Relationship Economics

involving unnecessary steps and waste. As Thinkers50 friends Alex Osterwalder and Yves Pigneur have masterfully illustrated in their work on business model generation and value proposition design, getting the hypothesis right and testing it diligently will save you countless hours and wasted resources.13 Make sure the market opportunity you see is viable, scalable, and worth pursuing. Few things are worse than coming up with the right answers to the wrong questions or building a solution looking for a problem!

Section 5: Where Is Our Differentiated Strength and Focus? Many relationships can pursue tangential opportunities. Inside the organization, the IT function can deploy hundreds of applications and platforms for various functional teams. Externally, a professional services firm can dramatically enhance a customer’s condition. A technology product or engineering team has countless features on its road map list. These are all classic cases of just because you can, doesn’t mean you should! Discernment in considering the best choices for the best possible outcomes boosts relationships. On the other hand, distraction by every shiny new object in our line of sight can dilute relationships’ credibility, viability, and value-­creation impact. That’s why most relationships benefit from two key points in this section. 1. Where We Should Focus—­ The customer segment you can better serve together, and the market opportunities you see in the previous section should inspire your strategic relationship focus. In our increasingly distracted world, through a collaborative effort, it is ideal if you can create a simple yet powerful matrix of short-­, medium-­, and longer/strategic-­ term timelines. Consider the mindset (growth, digital, entrepreneurial), underlying assumptions, and specific actions/  “Thinkers50 Ranked Thinkers: Alexander Osterwalder & Yves Pigneur,” https:// thinkers50.com/biographies/alexander-­osterwalder-­and-­yves-­pigneur/.

13

Strategic Relationship Planning in Your Organization

151

behaviors you’ll jointly pursue. Ensure that your prioritized pursuits are precise with a clear set of objectives, measures, and values. I’m a firm believer in test and know vs. build and hope! It is ideal if, in collaboration with your strategic relationship, you can quickly prototype a solution and test it with your target customer segment before you embark on a much more significant investment. Low fidelity is the perfect opportunity to scrap and restart, pivot, or abandon and pursue other avenues altogether. We tend to focus on processes, capabilities, and technologies in a great deal of our work. Ensure that you have the supporting infrastructure in place (or can get it) to give the strategic relationship the best chance of success. 2. How We’re Stronger Together—­Force multiplier, a term coined by the military, refers to a tool, a technology, or a weapon that dramatically increases the effectiveness of a group of soldiers. It could be a better communication system, enhanced battlefield intelligence, or even a logistics improvement that delivers soldiers and material at the precise time and location of need. Think of your strategic relationships the same way—­ how can you quantifiably become the link between the development and execution of a strategy? Haven Life, created by a startup team within Mass Mutual who saw a need to sell insurance differently, went online in 2016.14 As the founders began their journey, it became apparent they needed to rely on many of the traditional functions of an insurance company to create and launch their new product. Because they viewed themselves (a team of six people) as a distinct entity, they outsourced those critical functions related to product development, focusing more on the online buying experience. Like Amazon, Haven focused on the online user experience of buying insurance, not the traditional push model of selling insurance (distribution), because, in their model, no  “Insurance: Model Winners, Trends, and Insights,” Session at Celent Innovation and Insights Week conference 2022, https://www.celent.com/iiweek2022

14

152

Relationship Economics

insurance agents are involved in the process. While this is a subtle difference, the implications are enormous. Their focus was to create a pull model rather than a push model. That’s how Haven and Mass Mutual are stronger together.

Section 6: What Are Our Joint Outcomes, Results, and Desired Future State? Most strategic relationship initiatives fail because either or both parties aren’t aligned on their desired future state! That’s why the single focal point of this section is joint outcomes. To avoid running out of steam, get crystal clear on your desired joint outcomes. They should include: • Exponential business growth; • Net innovation; • Accelerated market acceptance/traction; • Broader access to exceptional and highly relevant talent; or • Another quantifiable outcome you’ll achieve. There are simply too many distractions, competing agendas, churn at leadership ranks (average tenure of chief marketing officers dropped to 40 months in 202015), a merry-­go-­round of crucial stakeholders, and dynamic market conditions. If you stay the course, you will uncover positive results associated with each SRP section. Short-­ and medium-­term results in the strategic relationships can lead to continued support, engagement, investment, and even greater desired outcomes or future states. This section is best stated as follows: “When we reach this milestone, we will have achieved XYZ results that

 Michaela Jefferson, “CMO Tenure Falls to Lowest Level in over a Decade,” Marketing Week, April 29, 2021, https://www.marketingweek.com/cmo-­tenure-­lowest-­level/

15

Strategic Relationship Planning in Your Organization

153

demonstrate this level of a return on our strategic relationship investments.” See FAST goals referenced back in Chapter One. With the Strategic Relationship Plan (SRP) under your belt, let’s move forward with a better understanding of what happens when you invest in your most significant asset consistently, strategically, and quantifiably over time—­ your Reputation Capital and Professional Net Worth.

154

Relationship Economics

Chapter Four Summary • Strategic Relationship Planning (SRP) is a disciplined process to help an individual focus on their most valuable business relationships and to make business relationships an institutional asset. • Five critical steps in individual SRP include Relationship-­ Centric Goals, Pivotal Contacts, Relationship Bank, Relation­ ship Currency Deposits, 30-­60-­90 Day Personal Action Plan. • Several traits continue to demonstrate flaws in traditional strategic planning. • Critical aspects of design thinking, systems thinking, and visual storytelling contribute to SRP. • The Strategic Relationship Planning Blueprint consists of six key sections: How We Engage with Key Relationships, Why This Relationship Is Strategic and the Measure of Our Success, What Is the Current State of Our Relationship?, Who Are Our Ideal Customers and Market Opportunities?, Where Is Our Differentiated Strength and Focus?, and What Are Our Joint Outcomes, Results, and Desired Future State?

Chapter 5

Reputation Capital and Professional Net Worth So far, I’ve shared the transactional nature of networking vs. the transformational opportunities in strategic relationships and how relationships enable business growth. We’ve covered six phases of strategic relationships, and, in the last chapter, I delved deeper into Strategic Relationship Planning. Through this, I hope you’ve absorbed how vital consistency is in how you show up with your strategic relationships. In this chapter, I aim to help you understand and apply your work-­specific strategies for an extraordinary return on our relationship investments. Over the past two decades, we’ve proven that when you invest in your most significant asset consistently, intentionally, strategically, and quantifiably over a period, you see and experience actual results and definitively set yourself apart from your peers. We’ll begin by delineating your technical competencies vs. your willingness and ability to build and nurture valuable relationships. Then we’ll elevate your perspective from the short-­term exchange of Relationship Currency to the medium-­term impact of Reputation Capital. Next, I’ll dive deeper into how your reputation can be assessed, key leading indicators to pay attention to now, and the cost of a damaged reputation. Finally, we’ll wrap up this chapter by focusing on your end game: professional net worth or relationship assets minus your relationship liabilities. Whether in the spring, summer, or fall of your career, you can enhance your professional net worth.

155

156

Relationship Economics

Preference for Technical Competence, Insistence on Relationships The U.S. Department of Labor shows technical competency as a blend of personal effectiveness, academic, workplace, industry-­wide technical, industry-­ sector technical, combined with management and occupation-­specific requirements (Figure 5.1).1

Figure 5.1  Technical Competence by the U.S. Department of Labor Source: Clark, ACT Working Paper WP-2015-2, February 2015.

• Tier 1: Personal Effectiveness—­These are competencies for day-­ to-­ day interactions with others, such as interpersonal skills, integrity, personal accountability, initiative, dependability and reliability, and willingness to learn.  Hope Clark, “Building a Common Language for Career Readiness and Success: A Foundational Competency Framework for Employers and Educators,” ACT Working Paper WP-­ 2015-­ 2, February 2015, https://www.researchgate.net/publication/ 282611939 1



Reputation Capital and Professional Net Worth

157

• Tier 2: Academic—­ Fundamental academic competencies include reading, writing, math, science, communication such as listening and speaking, critical and analytical thinking, and basic computer skills. • Tier 3: Workplace—­ Specific competencies are critical to getting anything done in the workplace. They include business fundamentals, teamwork, adaptability and flexibility, marketing and customer focus, planning and organizing, problem solving and decision making, checking, examining, recording, and working with tools and tech. • Tier 4: Industry-­Wide Technical—­Beyond general workplace competencies that most organizations need are industry-­ wide technical competencies. In a health-­ care career, the industry fundamentals include health-­care delivery, health-­ care information, ethics, laws, and regulations governing patient care, and safety systems and protocols. • Tier 5: Industry-­Sector Technical—­Beyond the industry-­ wide competencies, specific technical skills in an industry are essential to success. In the health-­care industry, different roles require the presence of one or more of these skills: administration of meds (oral or otherwise), EKG, lab techniques, medical terminology, CPR/first aid certification, health records, X-­ray, pharmacology, and medical office skills, but none require all of them. I would submit that many of these are, in essence, technical competencies. Of course, you must be competent for each to deliver on expectations of you in a given role. But, as I wrote in Curve Benders, the degree to which you translate these technical competencies into the team-­and organizational-­value creation is directly correlated to your personal market value. Let’s add a couple of additional competencies most leaders continue to look for in attracting, retaining, and developing exceptional talent. • Tier 6: Management or Employer-­ Specific—­ Beyond a role  of an individual contributor, those who develop the

158

Relationship Economics

competencies to manage or lead others to invest in rounding out the above tiers with staffing, informing, delegating, networking, measuring work, possible entrepreneurship, motivating and inspiring others, developing and mentoring others, strategic planning, preparing and evaluating budgets, forecasts, and profit & loss (P&L), managing conflict, building productive team dynamics, developing a vision, and monitoring and controlling limited resources. More recently, one can add diversity, inclusion, equity, multi-­generational, and considerably deeper tech management to this growing list. Within this tier are the skills that the COVID pandemic has highlighted, including those related to creating psychological safety in a hybrid workplace, as recounted by Amy Edmundson and Mark Mortensen of Harvard Business School.2 • Tier 7: Occupation-­Specific—­You’ve acquired many competencies in the above tiers and want to succeed in a specific role. Consider an enterprise cybersecurity tech sales professional. Most customers will require you to focus on their complete security software portfolio, competitive take-­ outs, expansion scenarios, and pipeline mastery to meet sales objectives within an assigned territory. The leadership will demand that you anticipate problems and define priorities and resources such as sales engineering or product marketing for sales opportunities. Here are the critical requirements for an IBM Cybersecurity Sales Specialist job posting: strong business acumen, adherence to consistent sales processes, proactive opportunity/territory management, diligent cost justification, new customer acquisition management, statesman-­like channel management, believable differentiation, astute deal-­ making, savvy business partner, and excellent negotiation skills with the highest level of customer management.3 2  Amy Edmundson and Mark Mortensen, “What Psychological Safety Looks Like in a Hybrid Workplace,” Harvard Business Review, April 19, 2021, https://hbr.org/2021/04/ what-­psychological-­safety-­looks-­like-­in-­a-­hybrid-­workplace 3   “Cybersecurity Sales Specialist,” IBM Careers, https://careers.ibm.com/job/ 15372643/cybersecurity-­sales-­specialist-­remote/?codes=IBM_CareerWebSite



Reputation Capital and Professional Net Worth

159

A brand is a fundamental and often forgotten facet of your business relationships, whether within your organization or externally. Specifically, the notions of brand familiarity, loyalty, and insistence: • Familiarity is a thorough knowledge and understanding of something or someone. We buy products and services and invest in or join companies because we are familiar with that brand. I feel comfortable with and confident in my decision because I feel personally connected to that product, service, or person. The Boston Consulting Group tested the leading brands in 30 different product categories. Twenty-­seven of the brands at the top of their category in 1930 were still at the top more than 50 years later—­therefore, we buy familiar brands.4 • Loyalty is attributed to repeat purchases, often through a conscious decision to buy or use the same product, service or continue to work with the same person. If I have a positive experience, I’ll come back. Several positive experiences lead to a positive attitude, if not a passion for my favorite brand. On the other hand, if a company changes, redesigns, or eliminates a favorite product, service, or organization with a highly favored individual, loyal customers suddenly become a booming voice in their objections. • Insistence takes loyalty to a different level where consumers of that product, service, or relationship will accept no alternatives. Instead, they will search the earth for “their” brand. Increasingly, organizations are working diligently through five key drivers to create awareness and insistence for their brand. The drivers begin with awareness through differentiation, value, accessibility, and, ultimately, an emotional connection (Figure 5.2).5

4

 Michael Solomon, Consumer Behavior, 9th ed. (Pearson College, 2011), 332.

 “The Blake Project,” Branding Strategy Insider, http://www.brandingstrategyinsider. com/why-­a-­branding-­strategy-­blog/ 5

160

Relationship Economics

Figure 5.2  Creating Brand Insistence

Source: The Blake Project,” Branding Strategy Insider.

In business relationships, individuals fall along a similar continuum with a couple of nuances. For example, think about the last key initiative you participated in where individuals were discussed. How did the leaders around the room describe a person? Here are some common reactions (real names withheld) (Figure 5.3):

Figure 5.3  Level of Brand Familiarity



Reputation Capital and Professional Net Worth

161

• Rejection—­“I’m not working with Tom. He’s arrogant as hell!” • Non-­Recognition—­“I have no idea who Susan is. Does she even work here?” • Association/Recognition—­“I know who Ricardo is. Good guy, sharp, and knows his stuff. Brazilian, right?” • Preference—­“I really want Sandy on this project. She knows Marketo and Salesforce, Gong, 6Sense, and Outreach and how to tie all of them together to give us a dashboard on our customer acquisition efforts for the next board meeting!” • Insistence—­“I’m not working with anyone other than Juan on this. It’s too important, and he knows how to engage and influence the right people to get this done!” If you don’t read anything else from this section, read this and let it sink in. Build a preference for your technical skills. Aim to build an insistence on how you identify, build, and nurture strategic relationships! I can always find others with the technical skills I need on any project, initiative, or deal, whether deep legal, IT, health care, sales, or other expertise or technical competencies. However, I’ll struggle with finding many options in people who can consistently engage, influence, nurture, sustain, gain buy-­in, or move others. I don’t want to denigrate anyone’s technical skills. They’re fundamental to business success. However, you need to see the connective tissue that allows those competencies to create value. That is, unequivocally, one’s relationship development competencies and Reputation Capital.

Freshness Dates of Relationship Currency Exchanges Business relationships are planted and nurtured with favors to grow and deliver quantifiable outcomes. Relationship Economics, in its most straightforward progression, is a stair step of value exchanges. Over

162

Relationship Economics

time, we promise value in almost every interaction: from delivering a report to providing billions in revenues. The fundamental difference between equally competent professionals often comes down to intangibles, such as positive energy, proactive initiative, a commitment to excellence in all tasks, continuous improvement in how they learn, and a growth mindset you feel in every interaction. As we deliver the value promised to our business relationships, we exchange Relationship Currency™ (Figure 5.4).

Figure 5.4  Exchanging Relationship Currency

You can think of this exchange of Relationship Currency as something akin to cash. It has immediate and recognizable value to the producer and the consumer. Relationship Currency has some built-­in fundamental laws. They include: • Gratitude—­someone does something for you, at a minimum, you should say thank you. Be wary of those with an air of entitlement. By the way, if gratitude feels obligatory, it will backfire. If you don’t mean it, don’t say it. • Reciprocity—­maybe not tomorrow, next week, or next month, but at some point, the recipient of the favor should (certainly ask, if not take the initiative to) reciprocate the favor for the producer of the value delivered. • Paying It Forward—­none of us are an island. If the producers of the value don’t experience the consumers of the said value



Reputation Capital and Professional Net Worth

163

helping, supporting, and uplifting others, they will make a mental note. Soon, the consumer will find that the producer is no longer available or interested in creating or delivering subsequent value. Said another way, business professionals will stop returning your calls and emails! In this exchange of Relationship Currency, an important topic is often ignored. Perishable items have a “freshness” date that gives a deadline for the products to be at their maximum flavor and quality. Although it’s generally safe to eat after this date until the expiration date, it’s not a happy foodie experience. Relationship Currency exchanges also have freshness dates. People may not remember what you did for them six or 12  months ago. They will remember what you did six days ago. These Relationship Currency exchanges are all around us—­from a colleague racing to meet a looming deadline, to more recently, many of us watching a fellow parent’s kids in a pinch; social norms dictate that we let an appropriate amount of time pass before we ask for their help in return. Otherwise, you may come off as gauche, as they may think our initial act was instrumental or somehow taken to initiate a quid pro quo. Research in the Proceedings of the National Academy of Sciences suggests that you can’t ask too soon!6 Reciprocity motivates a wide range of cooperative behaviors (e.g., tipping, exchanging favors, customer loyalty, etc.). It is typically assumed that reciprocal motives remain stable over time after a reciprocal relationship is triggered. Data from over 18,000 donation requests, a large university hospital system made of its former patients found that reciprocity decays rapidly over time.

Market Value of Reputation Capital It may be helpful to think of Relationship Currency exchanges as a reason for a relationship. You do something for me, and I thank you for 6  Amanda Chuan, Judd B. Kessler, and Katherine L. Milkman, “Field Study of Charitable Giving Reveals That Reciprocity Decays over Time,” Proceedings of the National Academy of Sciences, February 17, 2018, https://www.pnas.org/doi/abs/10.1073/ pnas.1708293115

164

Relationship Economics

it, perhaps reciprocate your kind value creation in my life. Independent of our interactions, we all should aim to lend a helping hand to others in need. These exchanges may come and go, so we may not prioritize them, consider them long-­term investments, or follow through with them for ongoing nurturing. It’s okay—­many relationships are meant to be that way in our lives. Be grateful for each interaction and see each as a learning and growth opportunity—­good, bad, or indifferent. These exchanges also help elevate everyday contacts into relationships with greater relevancy. Every day, positive connections that come into our lives have an excellent opportunity to become relationships. When we follow through and create consistent value, the relationship’s purpose evolves from a reason to a season. Consider the brand loyalty discussions in the earlier section where we return to a product, service, or individual because of an initial positive experience. Put several positive experiences together, and we develop a preference. Consistent, valuable Relationship Currency exchanges turn those early relationships into strategic relationships. Weeks, months, or years later, we feel that our lives are richer, more fulfilled, and more successful (however we define success) because they include specific individuals and relationships. When the value is promised and delivered, you exchange Relationship Currency. When the value is recognized, and you’re recognized for having delivered that value, you begin to accumulate Reputation Capital™ (Figure 5.5). If Relationship Currency is cash with immediately recognizable value, think of Reputation Capital as a medium-­to long-­term investment, like a home. Consistent with the comparable value of our homes, Reputation Capital also has some built-­in fundamental laws. They include: • Trust—­is the foundation on which every reputation is built. If trust is solid, earned over time, and consistently protected, it creates recognition, can overcome a crisis, and is essential to every business relationship. On the other hand, it is non-­ negotiable, takes years to solidify, and bad decisions can dilute or destroy it.



Reputation Capital and Professional Net Worth

165

Figure 5.5  Accumulating Reputation Capital

• Ecosystem—­one of the few things you essentially can’t change about a home is its location. Similarly, the ecosystem (industry, circle of colleagues, partners, or customers) is set within which you build your Reputation Capital. For example, gun manufacturing, gambling, or pharma will always carry a negative connotation for some. At the same time, energy, construction, and cryptocurrency trading will turn off others, regardless of how stellar your reputation may be in these industries. • Comparable Value—­reputation is a relative value to something else. For example, when we evaluate the reputation of one neighborhood, car brand, or airline, it’s typically vs. another. Similarly, when we consider an individual’s reputation, it’s typically a comparison to a set of standards set by others we admire, have had positive experiences with over time, or toward our desired outcomes from that relationship. Most leaders understand the importance of their organization’s reputation. From attracting stronger talent to being perceived as delivering greater value, hence premium pricing strategies, organizational repute sets it apart from competitors. Organizations with solid reputations benefit from loyal customers, thus reducing customer

166

Relationship Economics

acquisition and retention costs. Because the market believes that companies with strong reputations will deliver sustained earnings and profitable growth, they benefit from higher price-­earnings multiples and market valuations, along with the lower cost of capital. In many organizations, Reputation Capital is derived primarily from hard-­to-­ assess assets such as visionary leadership, brand equity, intellectual property turned into intellectual capital, or goodwill. Most organizations, however, do a poor job managing their reputation risk. Industry experts, Big Four accounting firms, and insurance company surveys of C-­suites and boards have identified reputation among the top five most significant strategic risks to boards and executives. Reputation is a strategic risk that will only increase in importance and vulnerability in the age of the employee and social activism, hyper-­ transparency, and always-­ on-­ connectivity. Senior leadership should consider whether the organization has invested sufficient time and resources to understand and prepare for the known and unknowable reputation risks it may face. Beyond a reactive crisis management focus on limiting the damage by the threats that have already surfaced, a proactive approach to risk management is also required. Business relationships must be proactive in managing their risk to their Reputation Capital. Here’s how: 1. Determine Your Reputation Capital–Reality Gap. You must begin by recognizing that your Reputation Capital is a matter of perception amongst crucial members of your relationship ecosystem (colleagues, partners, customers, investors, media contacts, the business community at large, board members, etc.). The reputation may also be limited to a specific function or team (project management, financial stewardship, enterprise sales, product marketing, or revenue operations, as examples). Your Reputation Capital may be distinct from your actual character or behaviors—­it may be better or worse. Suppose your Reputation Capital is considerably more significant than the underlying reality. In that case, the gap creates a substantial risk, and any relational setbacks will likely dilute that reputation until it more closely matches reality. To bridge your Reputation Capital–reality



Reputation Capital and Professional Net Worth

167

gap, you’ll have to level up your results to exceed expectations from your relationship ecosystem. 2. Elevate Your Relationship Interaction Norms. Results, language, behaviors, and experiences that contribute to one’s Reputation Capital evolve. Once-­acceptable practices may cease to be proper, satisfactory, or ethical. Members of your ecosystem may have different expectations, which makes the task of determining acceptable norms especially difficult. From gender or ethnic diversity to societal injustices to the appointment of CEO’s friends to boards as “independent directors,” earning guidance, smoothing of earnings, what we can all say or do with our business relationships has evolved. If you don’t elevate your relationship interaction norms, you risk dilution, if not permanent damage, to your Reputation Capital. 3. Strengthen the Commitments by Your Strategic Relationships. A significant risk to your Reputation Capital may be poor decisions by relationships you rely on to align your perceived and deserved reputation. For example, your reputation will suffer if you’re a fantastic enterprise sales professional but your systems engineering, customer success, or product teams can’t deliver. I’ve had a front-­row seat to the conflicted relationships between sales, marketing, product, and customer service teams when a new product is launched before it’s market-­ready. Inevitably reputations are diluted, if not ruined, for either selling a flawed product or a missed launch deadline. Individual agendas and egos outweigh the greater good of (other) individual, team, and organizational Reputation Capital. Only when you become proactive in determining risks to your reputation and managing your relationship ecosystem will you be able to accumulate and sustain Reputation Capital (Figure 5.6).7  Robert G. Eccles, Scott C. Newquist, and Roland Schatz, “Inspired by Reputation and Its Risks,” Harvard Business Review, February 2007, https://hbr.org/2007/02/ reputation-­and-­its-­risks 7

168

Relationship Economics

Figure 5.6  Considerations in Reputation Capital

Source: Inspired by Reputation and Its Risks,” Harvard Business Review, February 2007.

So what could be key metrics to measure your Reputation Capital? In our work with global leaders on their team’s and organization’s Reputation Capital, we’ve found the following to be a great place to start: • Sentiment Analysis—­Sometimes also referred to as opinion mining. I’ve long appreciated this natural language processing technique to determine how someone is perceived. Net Promoter Score (NPS)™ is often a good barometer to answer what questions. For example, on a scale of 1–10, 10 being the highest, how likely are you to recommend this individual for a specific function, role, or scenario? 0–6 tend to be negative, 7–8 neutral, and 9–10 positive. Subtract the positive percentage from the negative, and you have a baseline understanding of how someone is perceived. What you don’t know are answers to the why questions or any context in their response. For example, were they excited to recommend this individual or reluctant, and in what context are they providing this recommendation? This single idea has been my biggest complaint about LinkedIn recommendations. We have no idea how legitimate those endorsements of our skills are. Again, sentiment analysis of your Reputation Capital will answer the what and the why. When was the last time you conducted a Net Promoter Score (NPS) on your reputation? • Share of Voice—­Thought-­and practice-­leadership strongly contribute to value creation and Reputation Capital. So how much percentage of voice do you generate? How much of the conversation in places that really matter (such as credible



Reputation Capital and Professional Net Worth

169

press, marquee events, or influential industry circles vs. the often useless and overhyped social media channels) do you own compared to your peers or the rest of the market. Search David Nour and Relationship Economics, Co-­Create, and Curve Benders, and you’ll find a strong share of voice in these topics. “No brag, just fact.” I’m simply highlighting the critical nature of tracking your share of voice to gauge your Reputation Capital so that you can make informed, strategic decisions about where you choose to invest time, effort, and resources. • Reach and Rapport—­Your Reputation Capital dramatically benefits from awareness and familiarity with the brand called you! But, how far do your key messages travel? How do you ensure that your value creation reaches the right target audiences and beyond? When you understand your reach and rapport with your target audience, you will truly understand what’s working in nurturing your Reputation Capital and what may need tweaking for more remarkable results. I’d caution you against vanity metrics as we all tend to start believing our own press clippings. Instead, go on a listening tour and engage in strategic relationships you like, trust, and respect. • Key Messages—­Your Reputation Capital is heavily based on the perceptions of your unique value-­add. Accordingly, are those perceptions based on key messages you want to be associated with your personal or leadership brand? For what do you really want to be known, appreciated, and sought after? If it isn’t the one your Reputation Capital is based on today, you have some work to do in changing those perceptions toward what it is associated with. I learned long ago that you simply can’t improve anything you don’t measure. Therefore, focusing on fewer, critical key messages will do your Reputation Capital far greater good than blanketing your strategic relationships with all that you are capable of doing. Beyond measuring the market value of your reputation, you also must consider three distinct Reputation Capital hit types and consequences (Figure 5.7).

170

Relationship Economics

Figure 5.7  Reputation Capital Hit Types and Consequences

Source: SIFA Strategy, “Reputation—Time to Be Viewed as Capital,” January 2016.

Finally, in this section, I address Organizational Reputation Capital as both an asset and a liability. By engaging a broad array of stakeholders, you can do the critically important work of looking at Reputation Capital in its entirety with the understanding that digital becomes the connective tissue. Leaders must begin forecasting Reputation Capital challenges and opportunities and become proactive in addressing the risk well in advance. Several aspects of organizational reputation create a more holistic view of Reputation Capital (Figure 5.8).8 8  SIFA Strategy, “Reputation—­Time to Be Viewed as Capital,” January 2016, http:// overandver.blob.core.windows.net/sifa/201601-­reputation-­time-­to-­be-­viewed-­as-­ capital-­1.pdf.



Reputation Capital and Professional Net Worth

171

Figure 5.8  Relative Contribution to an Enterprise’s Reputation Capital

Research shows that consistently delivering exceptional service is the highest contributor to organizational Reputation Capital. The organization’s culture and ethics, senior leadership team’s quality and vision, financial performance, and product—­ specifically, R&D and innovation capabilities—­round out the top five. Research also shows that highly scripted responses are seldom adequate. The organization’s relationship ecosystem will give far more credence to what the organization and its leadership do and how they behave than what they say. Transparency is table stakes.

The Endgame of Your Professional Net Worth In its simplest terms, your personal net worth is the difference between what you own and what you owe. You calculate your net worth by subtracting your liabilities (debts) from your assets. Creating a personal balance sheet requires you to pull together records of your assets, such as cash, savings, and personal property. Next comes the comparable financial liabilities owed, such as loans and mortgages.

172

Relationship Economics

Let’s take the same lens to your Professional Net Worth. Here’s how: • Value creation is the enabler of Relationship Currency. As such, the freshness and diversity of your professional relationships become of immediate value. You can consider this readily accessible, like cash. You can make one phone call, send a couple of emails, and quickly put like-­minded, highly relevant professionals together toward an everyday opportunity. You’ve nurtured your relationships consistently to create not just name recognition but also quantifiable value, as evident by their preference to continue to associate with you. • You’ve worked diligently in your area of expertise to accumulate your Reputation Capital. You’re a recognized expert, industry insider, credible voice, and consistently reliable in your value creation and delivery. You’re the go-­to person when influential people need an independent sounding board, astute investor, or access to others. Reputation Capital is like an investment account; while it may not be as readily available, it  accumulates long-­term relevance, viability, and preference in the hearts and minds of your relationship ecosystem. If these are your business relationship assets, it’s essential to consider potential business relationship liabilities because others will undoubtedly view them. Keep in mind, just like the value of your assets, the perceived impact of your business relationship liabilities is also in the minds and hearts of others. Here are just a few examples of subtle relationship liabilities: • Industry—­As mentioned earlier, specific industries tend to carry unfavorable impressions. • Firm—­The organization you joined that went bankrupt, defrauded its customers, or otherwise operated in the market with a tarnished reputation, certainly raises questions about your involvement with the firm.



Reputation Capital and Professional Net Worth

173

• Leadership—­If your leaders may not be highly regarded, have tarnished reputations, or haven’t created any material value that others can point to, this may reflect poorly on you. I’ve also seen the judgment of a rising star who joins a declining or lesser firm become a perceived liability. • Teams or Colleagues—­The colleagues or specific groups you work with reflect on you. If they’re unprofessional, indifferent, or unqualified for their respective jobs, that reflects poorly on you. • Role—­The type of work, role, or realm of responsibilities you may be involved in—­such as debt collection, vehicle repossessions, or even certain legal practices—­may not be well received by the business relationship you need in your Professional Net Worth. • Tenure—­Stay too long at any organization, and people question your inability to pursue more significant opportunities, be ambitious, or too comfortable in the status quo. Similarly, stay too short a time in an organization or several back-­to-­back coffee stops at different firms, and many wonder if you struggle to keep a job or why you continue to join the wrong organizations. • Lack of Professional Maturity—­Polite company often refers to this as “She’s too green” or “Bless his heart, he’s just not ready yet.” They’re saying that that person doesn’t have the seasoning, perhaps business acumen, or prudent judgment yet. • The Lack of Consistency in Your Path—­Have you ever met individuals who jump from one role and function in an industry to a completely different one? Then, you meet them six months later, and they’re in yet another position and yet another sector, with no logical connection or relevance between the jumps. To most business professionals, that raises a flag of rudderless! • Lack of Self-­ Awareness and Self-­ Mastery—­ We know it when we see it—­those who are out of touch, tone-­deaf, or

174

Relationship Economics

unaware of how they present themselves. There is no self-­ control in group collaborations or, in company outings, the adolescent partier emerges. • Complacency, Indifference to Learning, and Growth—­As I wrote in Curve Benders, the arc of any role is estimated at three to five years. After that, most jobs get on autopilot, and their occupiers become complacent or indifferent to professional learning or growth. They’re simply going through the motions, which shows in how they show up! • Lack of Performance, Execution, or Results—­Have you met individuals rich in excuses as to why things don’t happen, which they use to deflect accountability? In their milieu, the prevailing question is “Why is he still here?” Unfortunately, such a question reflects poorly on the managers or leaders, as it calls into question their willingness and ability to replace underperformers. • Lack of a Filter between Emotions and Decision Making— This may be the most significant business relationship liability. You will suffer if you react emotionally to everything said to you. I admire those who sit back and observe things with logic and restraint. If words control you, everyone else can control you. Leaders look closely at individual team members to gauge whether they can breathe and allow difficult circumstances to pass. These and many other circumstances, situations, and poor decisions have consequences. Not all, but many become relationship liabilities. The sum of your Relationship Currency Exchanges (value creation and delivery) and Accumulated Reputation Capital (elevated value recognition) minus examples of the above relationship liabilities over time becomes your Professional Net Worth (Figure 5.9). Your Professional Net Worth is not bound by age or socioeconomic status. Instead, it represents the relationship ecosystems you nurture at each career stage that contribute to your lifelong personal and professional growth. Your Professional Net Worth expands with each new strategic relationship that encourages and inspires others and



Reputation Capital and Professional Net Worth

175

Figure 5.9  Building Professional Net Worth

contributes to the lives of others in a meaningful way. A good formula to keep in mind could be: Professional Net Worth

Breadth Depth Impact Multiplicity Tenurre

With the overarching understanding of your Professional Net Worth, let’s focus on becoming more proactive in building the relationship assets and minimizing relationship liabilities (difficult to eliminate altogether). I’ve found it helpful to consider five key elements in the long-­term viability of professional relationships: 1. Impact—­How much of a difference (could be qualitative or quantitative) did you make in the work and lives of others? What has been the material effect on those in a relationship with you? If you can affect others so that they reach a higher performance level than they ever thought possible, you will be in demand for years to come. For example, Bill Campbell mentored visionaries such as Steve Jobs at Apple and Larry Page and Eric Schmidt at Google

176

Relationship Economics

while creating over a trillion dollars in market value. He left behind a legacy of growing companies and successful leaders.9 2. Breadth—­How far did your relationship influence reach? Was it just local (not a small feat) or global? The key is creating and delivering valuable solutions, inventions, information, services, and connections to other beneficial relationships. That’s how you create a global scope and scale of reach to create real change in the lives of others. For example, Nelson Mandela made a global imprint from a closet-­ sized jail cell. 3. Depth—­If breadth is about the scope and scale of your reach, depth is reaching the core of an individual, the culture, an industry, or the heart of a city. Depth is the lifetime value of a professional relationship when it touches, shapes, and forms an individual’s values, the cultural fabric of a team or an organization, or when your value creation impacts a city for years to come. Billy Payne was an improbable hero, who traveled the world, built, and nurtured relationships with royal dignitaries, helped revive a dying inner city, and gave millions of people the experience of a lifetime when the 1996 Centennial Olympic Games came to Atlanta.10 4. Multiplicity—­This is your multiplier or network effect and should measure your cascading value creation. How much did your professional relationships build upon the value that you create? Can others duplicate your results, scale your impact, or take it to an ever-­higher level? Multiplicity isn’t about hype or quick wins but about creating lasting value in the work and lives of others. Former ambassador Andrew

 Eric Schmidt and Jonathan Rosenberg, Trillion Dollar Coach: The Leadership Playbook of Silicon Valley’s Bill Campbell (Harper Press, 2019). 9

 Rebecca Burns, “A Private Payne: For Better or Worse, Billy Payne Remains in the Spotlight,” Atlanta Magazine, November 1, 1999, https://www.atlantamagazine.com/ great-­r eads/a-­p rivate-­p ayne-­f or-­b etter-­o r-­w orse-­b illy-­p ayne-­r emains-­i n-­t he-­ spotlight/

10



Reputation Capital and Professional Net Worth

177

Young recently spoke at our Leadership Atlanta Class of ’22 Power and Influence Day. He began his career as a pastor and an early leader in the Civil Rights movement alongside Rev. Martin Luther King, Jr., and then became a congressman, mayor of Atlanta, and the U.S. ambassador to the United Nations. He touched so many lives and created a ripple effect across global leaders and their organizations for decades. 5. Tenure—­For all of us, this is the denominator! How long will the relationships you build today carry into the future? Your Professional Net Worth unfolds during your entire lifetime. Ideally, it lasts long after you’re gone through the children and grandchildren who bear your name. Whether a company or a country (consider Steve Jobs and Nelson Mandela), the work, their relationships, and their vision continues. If we’re all products of the advice we take, how can you invest in young people early and often in your professional career to create a long-­tail impact in your value creation for generations to come? Bring the above formula into your organization, and now your Professional Net Worth can scale. In Chapter Two, I referenced our research over the past two decades to 30 total individual competencies, team dynamics, and organization-­wide attributes in the Relationship-­ Centric High-­Performing Teams (Figure  2.6). Let’s take a closer look at each.

Individual Competencies Your Professional Net Worth will always start and end with your competencies. These attributes will create a road map for distinguishing yourself, so double down on their thoroughness and consistency. Become a student in how they can best manifest in you. 1. Competitive—­Prioritize external targets and threats, and be willing and able to compete and win. Competitiveness is a sense of urgency, focusing your business relationships on

178

Relationship Economics

outcomes. It isn’t about winning at any cost. It’s about the constant hunger for the best version of yourself and others you choose to invest in. 2. Connected—­Proactively connect, create, and capitalize on the value in your relationships at the place where the business meets its customers. Get outward-­facing as often as possible because customers are much more valuable to your Professional Net Worth and a lot more fun over time due to the changing nature of the external market dynamics (vs. never-­ending internal meetings!). 3. Candid—­Muster up the courage and exhibit it to challenge the status quo vs. defending it in every relationship. Over time develop the confidence and the discernment to know when to be a great teammate and when to stand up and voice a dissenting view. 4. Generous—­Contributing praiseworthy credit to others. None of us is an island, and when you bolster the success of others, they remember and reciprocate. Rising tides help all ships. The best individual contributors I’ve ever met take accountability when things don’t go well and give credit to the team when they succeed. 5. Resourceful—­Creative, scrappy problem-­solver to supplement or clarify information. The days of hoarding information as a source of job security or political posturing are over. None of us have the answers; we all walk into unfamiliar scenarios. Those who get resourceful with and through their relationships get out of the gate, arrive at the destination, and enjoy the journey far more than those who wait to be spoon-­fed. 6. Engaged—­Use facts with passion and conviction to engage, influence, and persuade your relationships. Learn to frame effectively, explain clearly, and defend your position without just regurgitating it. Immerse yourself in a lean information diet to back your assertions and stress-test your assumptions. Make room to hear all the relevant voices, and honor those who may disagree.



Reputation Capital and Professional Net Worth

179

7. Compliant—­Operate within legal and ethical guardrails. They’re there to keep you from falling off the 200-­foot cliff. Use resources within those guidelines and ensure you never do anything to embarrass your relationships due to their associations with you, particularly superiors or those in positions of power and influence. 8. Focused—­Just because you can, doesn’t mean you should. Commit to doing fewer things exceptionally well. Complete what you start and deliver results while course-­correcting or navigating obstacles. Few leaders care for excuses about why something didn’t happen. Get it done. 9. Clear-­Sighted—­In times and places of opaqueness, ambiguity, or chaos, be the guiding light to help spot emerging trends, unanticipated challenges, and opportunities, and play chess—­always three moves ahead. 10. Intelligent—­Heighten your sense of curiosity and be the CEO of your development, education, and personal and professional growth. Challenge yourself in the Personal S-­Curve I wrote about in Curve Benders. Co-­create with others who may bring a unique perspective, skill set, or puzzle piece. Life is too short to make all the mistakes yourself; learn from others’ mistakes.

Team Dynamics As my children enter adulthood, I see more and more that my most significant influence on them was not in the heart-­to-­heart talks that I planned and scripted but in my actions and words in our daily life. One team member insists that 90 percent of her sons’ moral education occurred on rides to and from soccer. Team dynamics work the same in contributing to your Professional Net Worth and diluting or even destroying it. Thus, it is critical that you become the relationship-­ centric example you want to work with, be led by, and lead. The best teams I’ve ever worked with intentionally hold themselves accountable without needing an authority figure, corporate bureaucracy, or cc’ing 15 people to CYA!

180

Relationship Economics

11. Competent—­Teams are the sum of their structure, skills, knowledge, and behaviors. Relationship-­Centric teams are skilled in how they engage and influence others, well-­ practiced, not to be perfect, but to improve how they show up every day. They master the communication between and beyond themselves and heavily rely on each other to bolster the team’s success. They see themselves as a micro-­enterprise with a mini-­P&L to measure their success. 12. Committed—­Contributors to your Professional Net Worth don’t clock in and out for a paycheck. They’re present, emotionally engaged, and dedicated to the team’s mission, targets, and values. You can sense a high degree of loyalty, protectiveness, and belonging. Elite military units heavily rely on this belief as a foundation of their team. 13. Coalition—­Relationship-­ centric teams engage the cross-­ functional, cross-­geography, cross-­business unit, and a broad spectrum of stakeholder centers of influence. They earn respect as independent thinkers with a unique perspective to collaborate, deliver on commitments, and leverage their dependability to become the connective tissue within the organization. As a confluence of dissenting views, they’re translators and bridge builders. Relationship Centric teams prioritize the multiplicity aspect of the Professional Net Worth formula, and their impact moves across a vast reach. 14. Conflict as a Relational Asset—­ Respectful pushback is healthy in every relationship. Relationship-­centric teams use a constructive approach to resolve dysfunctional team dynamics. They coach others with a strong dose of psychological safety to ensure an ever-­present belief in good intent; thus, individuals are never attacked. Such teams constantly challenge ideas to elevate them forward. 15. Feedforward—­You can do very little about missteps in your  rear-­view mirror. You can do a lot if you focus on what  you see through your windshield. Relationship-­centric teams use a high degree of measurement, analysis, and



Reputation Capital and Professional Net Worth

181

enhancements in every process, capability, and tech stack they utilize as a team. 16. Peer Discipline—­ Relationship-­ Centric teams treat each other as peers and monitor their respective performance expectations. Because they’re singularly focused on a shared mission or vision, they understand their respective roles and contributions. There is no us and them, only a WE challenge, opportunity, and path forward. 17. Protective—­It may be a cliché to think of a team as a family, yet Relationship-­Centric teams are often incredibly protective of each other against outside threats. They realize the strengths, perspectives, and unique value each member adds to their shared mission/vision and don’t take kindly to any parts of it being disrupted, disrespected, or derailed during their pursuits. 18. Proud—­Pride in your work is the ultimate sign of your Professional Net Worth. Relationship-­Centric teams take enormous pride in the value they create and deliver together. The team’s success outweighs individual glory. They realize the only way to get far is if they get to the finish line of every initiative with their heads held high together. 19. Trust-­Centered—­They don’t believe in failing; they pride themselves in their learning moments. They dare to fail and create a culture unafraid of retribution. They pursue praiseworthy failures because they have deep trust in each other. They welcome new team members and ensure that they both build and demand trust-­centered behaviors from each other. 20. Respected—­Because they deliver value consistently, they earn the respect of their internal and external relationships. Within and outside the organization, they demonstrate leadership without titles or compensation. In addition, they are revered for how they function as a solid and supportive team.

182

Relationship Economics

Relationship-­Centric Organization We engage diverse parts of our client organization teams during our advisory work on revenue growth: marketing, sales, customer success, product, engineering, field service, finance, revenue operations, human capital, legal, and tech. Beyond the relationship-­centric attributes of any individual team, how they work across the organization, often virtually, globally, says a lot about their understanding and application of Professional Net Worth best practices. 21. Adaptive—­Only organizations that consistently scan the periphery to learn and navigate change with confidence and agility have remained relevant through the global pandemic. Strategic relationships within and external to the organization can serve as scouts to identify faint market signals and bring them to consideration, not just for understanding trends but also for the organization to move proactively as these unfold. 22. Big Thinking—­Relationship-­Centric organizations make big bets. They iterate the present, constantly looking to do the same thing better. They do new things and test opportunities to disrupt by doing new things that make old things obsolete. Apple’s wearables business alone is as big of a Fortune 100 company, with the company’s first fiscal 2022 quarter revenue results ending on December 25, 2021, at $124 billion.11,12 23. Emotionally Astute—­ Relationship-­Centric organizations have a deep allegiance to a multi-­generational workforce. They realize the incredible value their more seasoned talent can bring while embracing the cool factor of the next several

 Lisa Eadicicco, “Apple Says Products like the Apple Watch and Airpods Are Doing So Well, Its Wearables Business Is as Big as a Fortune 200 Company,” Business Insider, April 30, 2019, https://www.businessinsider.com/apple-­q2-­2019-­earnings-­apple-­ watch-­airpods-­sales-­2019-­4

11

 “Apple Reports First Quarter Results: Revenue up  11 Percent to New All-­Time Record,” Apple.com, January 27, 2022. https://www.apple.com/newsroom/2022/01/ apple-­reports-­first-­quarter-­results/

12



Reputation Capital and Professional Net Worth

183

generations. They also invest in their leaders to effectively embrace highly divergent sets of individual values in their talent pool. Creating emotionally astute teams isn’t an HR thing. It’s every manager, every leader, every team member, everyday commitment! 24. Effective at Execution—­ Relationship-­Centric organizations are relentless about execution. They possess urgency, decision velocity, precision in their leadership thoughts and actions, and make prudent, data-­driven decisions. 25. Dependable—­Throughout the organization, you meet individuals who follow through (a process, not a transaction). They remember, repeat, and reinforce their commitments up, down, and across the organization. Their leaders lead from the front lines and manage by walking through the organization, not from the mahogany row. They get customer-­facing and bring a sense of Outside-­In leadership to their strategic priorities. 26. Not Overly Complicated—­Relationship-­Centric organizations use metrics such as the OKRs and NPS to transform metrics and processes into simple prioritized actions. These succinct directions keep the conversations, key steps, and buy-­ in from various stakeholders uncomplicated. They consistently object to bureaucracy, layers of decisions, and complexity in the business to streamline their relationships-­ to-­impact quotients. 27. Unbound—­Relationship-­Centric organizations aim incredibly high and develop their talents not to be bound by what they can see but by what they can imagine. They’ll leave their competitors behind even if they don’t reach the stars. 28. Strategic—­Relationship-­ Centric organizations adopt and embrace technology, in all its forms, for broader-­based functional excellence. As you’ll read in the next chapter, they prioritize tech as an enabler of their success. In addition, they intentionally create and sustain a culture of experimentation aligned with their strategic vision and path to their desired milestones.

184

Relationship Economics

29. Magnet for Talent—­ Relationship-­Centric organizations go beyond the importance of ethnic and gender diversity and place an equal premium on cognitive diversity in attracting, retaining, and sustaining global talent. They employ forward-­thinking human capital models in their technical and leadership development (not everyone is a full-time employee). They see themselves as a stepping stone in every individual’s learning and growth journey. 30. Purposeful—­Above all, Relationship-­Centric organizations have a long-­term vision that is consistently shared and nurtured. They know their why, cascade it throughout the organization, and ensure that their cultural norms are aligned with their purpose. There is no question about what business Patagonia is in and why they’re so passionate as an organization about protecting our natural resources in all that they do. To develop and sustain your Professional Net Worth, make a personal commitment to the individual competencies, and inspire your team to believe in and practice the team dynamics daily. If some attributes are missing, aim to create or acquire them. It is necessary to think big, start small, and find ways to scale relationship-­centricity that works in the fabric of the team and the organization. Relationship-­centricity cannot be a to-­do task for individuals or teams. If so, the total gains from Relationship Currency, Reputation Capital, and individual Professional Net Worth will never be fully realized. But, conversely, if you deliberately begin using the above 30 attributes as a personal, team, and organizational scorecard, you’ll soon realize more significant results. In that pursuit, here’s a worthwhile exercise (Figure 5.10): • For the first column, rate the individuals you believe are relationships assets in your Professional Net Worth (A-­B-­C-­D, D being the lowest grade you’d give to the individual competencies of your broader network).



Reputation Capital and Professional Net Worth

185

Figure 5.10  Relationship Centric High-­Performing Team Exercise

• Capture the biggest strengths and weaknesses of their individual competencies, team dynamics, and the organization in which you work. • Come up with one commitment of how you’ll elevate, amplify, or enhance your Professional Net Worth in each of these columns starting today! Now that we’ve covered your Reputation Capital and Professional Net Worth let’s move forward with the implications of artificial intelligence and machine learning in strategic relationships.

186

Relationship Economics

Chapter Five Summary • You create impact in business relationships over time to accumulate your Reputation Capital. • Over time, the breadth, depth, and collective impact of those relationships allow you to build your Professional Net Worth. • It is critical that you build a preference for your technical skills. Aim to create an insistence on how you identify, build, and nurture strategic relationships! • Sentiment Analysis, Share of Voice, Reach and Rapport, and Key Messages are viable ways to measure your Reputation Capital. • Thirty attributes define Relationship-­ Centric High-­ Perfor­ ming Teams, initially mentioned in Chapter Two with much more detail here.

Chapter 6

The Role of AI in Strategic Relationships

T

hrough the power of AI, marketers are obtaining more significant customer insights and recommendations, manufacturers are predicting supply chain bottlenecks, and insurance companies are more accurately assessing risks. Thus, the market for enterprise AI is growing at 35 percent annually and is expected to reach nearly 53 billion by 2026.1 In addition, jobs for AI specialists and data scientists (a precursor to AI) are up 74 percent and 37 percent, respectively. Yet, how do you replace looking someone in the eye, shaking a hand, or feeling the warmth of an embrace, virtually? Sociologists and anthropologists tell us those are ways human beings gain a sense of belonging, feel that we matter, earn and lend trust, and move a relationship forward. And so many felt incredibly isolated during the pandemic because we couldn’t do these things. So let’s agree that virtual communication and social media platforms, as valuable as they have been in keeping us informed, are doing more to disengage and disconnect us than ever. In this chapter, I will tackle how to build strategic relationships in the modern hyper-­aware, always-­on, digital, and highly predictive era. Equally important, I want to examine when and how automation, machine learning, and other advanced technologies might help or hurt our business relationships in several key aspects of its growth  Bhushan Jagtap and Supradip Baul, “Enterprise Artificial Intelligence (AI) Market Outlook  – 2026,” Allied Market Research, https://www.alliedmarketresearch.com/ enterprise-­artificial-­intelligence-­market 1

187

188

Relationship Economics

(Figure 6.1). Many believe AI isn’t just a tool for pragmatic business decisions. It can leverage working relationships as well.

Figure 6.1  The Broad Impact of Strategic Enterprise Relationships

Machine Learning and Business Relationships within the Organization Developing strategic business relationships always requires intimate human intervention. As you have experienced, business relationships within or external to the organization can be incredibly time-­ consuming when done well. Each activity takes time, from looking up someone’s contact information in a corporate system to reviewing digital or paper documentation to coordinating with others to complete a task. The quality and effectiveness of these relationship development processes are dependent on every individual’s speed, accuracy, and effectiveness. Many relationship-­ development activities are repetitive, manual, and, as a result, error prone. Try sending the same email to a dozen or more contacts; hence, marketing automation. Or find all your contacts in that division, business unit, or locate and let them know you’ll be in town soon and ask if they’re available to visit over coffee. Hence, auto-­ dialers and automated text campaigns. Because we all struggle with time constraints, limited resources, and higher priorities, AI/ML may prove particularly valuable here.

The Role of AI in Strategic Relationships

189

Let’s begin with Robotic Process Automation (RPA), which allows businesses to lean into automation so that individuals can focus on value-­add, relationship-­centric activities related to a critical business outcome rather than repetitive manual tasks. Most business professionals tend to get frustrated with the technology that takes too long to implement (vs. their current manual processes). They don’t care for tech that lacks personalization for each recipient, makes changing the process particularly difficult, or consumes valuable resources. This friction between the need to nurture business relationships and the lack of the appropriate or relevant tools, resources, and automated processes can be costly with missed internal deadlines, external market opportunities, and wasted resources. RPA, when designed correctly as a relationship-­developed automation solution, can foster speed, independence, and a great deal of relationship currency. Easy-­to-­use tools with drag-­and-­drop features in highly visual environments can enable nontechnical business professionals to visualize, design rapidly, and optimize critical business-­ relationship identification, nurturing, and sustaining processes. In addition, bots can adhere to business etiquette, policies, and protocols and run a sequence of events to create awareness and engagement and improve human interaction for maximum impact on the business relationship. Let’s look at several examples where AI/ML, including RPAs, create meaningful and material value within the organization. For example, AI can handle tasks from candidate shortlisting to accelerating onboarding, ensuring an employee’s ongoing safety, anticipating disengagement, and, ultimately, helping them move on to their next chapter. Researchers from MIT’s Computer Science and Artificial Intelligence Lab determined that this can increase employee morale, reduce operational errors, and improve employee productivity and transparency between team members and their managers.2 2  Anthony Melanson, “Can Automation Improve Employee Morale?” Aethon, Inc., Blog on Robotics, 2018, https://aethon.com/can-­ automation-­ improve-­ employee-­ morale/

190

Relationship Economics

In the ongoing global challenges of hiring and managing employee relationships, Deloitte’s Human Capital Trends Report found that HR departments are being asked to redesign everything they do. For example, the holy grail of recruiting exceptional talent, a challenging and lengthy process, has been a quick, easy, and accurate way to automate candidate shortlisting. Unfortunately, applicant tracking systems have been around long enough for candidates to “game” the system by stuffing their resumes with “keywords.” This cat-­and-­mouse game amplifies the weaknesses of every search: false positives (moving forward unqualified candidates) and false negatives (screening out qualified candidates). Enter Toronto-­based Ideal.com (acquired by Ceridian), which replaces manual shortlisting by intelligently matching résumé data with jobs to be done. The talent-­acquisition team provides feedback by weighing the quality of the candidate experiences based on past data from successful hires. The algorithm uses this information to improve its accuracy over time.3 AI tools integrate facial recognition in video conferencing platforms to facilitate teamwork, discussion, and project collaboration and become an HR advocate. In addition, machine learning allows organizations to analyze employee data to incorporate more inclusive, representative policies and safer, more comfortable work environments. In a completely different yet related human capital arena, sexual harassment was a problem long before the term was coined in the 1970s and became front and center at work with the #MeToo movement. It occurs openly in toxic cultures; regrettably, bad behaviors don’t always happen in the spotlight. They happen every day over Slack, Skype, and other work platforms. An estimated 75 percent of  sexual harassment incidents in the workplace go unreported.4

 Shaun Ricci, “Automation vs. Augmentation: How Talent Acquisition Benefits from AI,” Ideal.com, September 29, 2021, https://ideal.com/talent-­acquisition-­automation-­ vs-­augmentation/ 3

 Tara Golshan, “Study Finds 75 Percent of Workplace Harassment Victims Experienced Retaliation When They Spoke Up,” Vox, October 15, 2017, https://www.vox.com/ identities/2017/10/15/16438750/weinstein-­sexual-­harassment-­facts 4

The Role of AI in Strategic Relationships

191

Montreal-­based Botler.ai uses natural language processing (NLP) to  scan online conversations for specific phrases or sentence structures, flagging anything inappropriate.5 Slack (acquired by Salesforce) has become a dominant company communication, collaboration, and knowledge-­ sharing platform, switching to team productivity beyond email. Slack’s AI uses a data structure called the “work graph” to gather information on how each company and its employees use the tool and interact with one another. Work graph data can then train artificial intelligence models that make Slack more user-­friendly. For example, Slack estimates that the average user is bogged down by 70 or more daily messages. So it uses machine learning and natural language processing in a feature, Highlights, to move more relevant messages to the top. In addition, Slack’s search utilizes artificial intelligence to help users pinpoint knowledge experts and the channels where they can be reached based on an analysis of who talks about what and where. Within the manufacturing arena, AI is elevating human decision-­ making capabilities. For example, Toyota Motor North America (TMNA) partnered with Invisible AI to help it make more intelligent factory decisions regarding quality, safety, and productivity.6 Installed in all 14 TMNA manufacturing locations, the system puts electronic eyes on every corner of the operation with AI technology to analyze any issues. “If you can’t see problems, then you can’t solve them,” said Eric Danziger, Invisible AI co-­founder and CEO. “We’re giving them tools to see more of what’s happening inside their facility, and they can then go in and correct any problems and bottlenecks, making sure people are safe.”7 Toyota uses Invisible AI’s system, which goes beyond human observations or simple security cameras, to improve quality, productivity, and safety. “We observe our employees assembling vehicles to identify inefficiencies and bottlenecks in their standardized 5

 “Fighting Harassment, Violence, and Misconduct,” https://botler.ai/

6  Ed Garston, “Toyota Puts Invisible Eye in North American Factories,” Forbes, May 4, 2022,https://www.forbes.com/sites/edgarsten/2022/05/04/toyota-­puts-­invisible-­ai-­eyes­in-­north-­american-­factories 7

 Ibid.

192

Relationship Economics

work,” said Stephen Brennan, group vice president, Vehicle Production Engineering & Manufacturing Production Innovation Center. “Invisible AI systems will help us increase the frequency and accuracy of process reviews and reduce the time needed to find inefficiencies across processes, giving us more time to focus on improvement.”8 Another fascinating space where AI/ML is jolting human relationships comes via the evolution of robots. It’s been 60 years since the first industrial robot,  Unimate, was invented.9 However, industrial robots have always been viewed skeptically for safety purposes. In addition, their inability to co-­exist with humans has surrounded them by guardrails and kept them away from the labor force. Enter a collaborative robot or Cobot that can operate directly alongside its co-­workers and freely interact with them, thus opening many possibilities for task automation. With their round-­the-­clock functionality, economic efficiency, and scalability, Cobots can: • Pick and place—­tasks where an object needs to be displaced or re-­oriented; • Machine-­tend—­load machines such as computer numerical control (CNC), injection molding, press brakes, or metal stamping presses; • Process and finish tasks—­such as gluing, drilling, or welding, as well as polishing, grinding, and deburring; • Quality inspect—­capture, analyze and interpret images that don’t comply with the company’s quality requirements; • Pack and pallet; • And so much more. From Robotic Process Automation to applicant tracking systems, NLP, work graphs, and Cobots, it’s readily apparent that AI/ML engines will continue their profound impact on our work. In several 8

 Ibid.

9

 “History of Unimate,” Wikipedia, https://en.wikipedia.org/wiki/Unimate

The Role of AI in Strategic Relationships

193

case studies, AI enhances how we interact and influence others in communication, problem solving, and decision making challenges. Next, let’s take a closer look at the impact of AI/ML on relationships with customers, partners, and stakeholders critical to our success outside the organization.

Conversational Commerce and the Customer Lifecycle Maturity Buying online can be challenging, even annoying. Browsing, scrolling, clicking, and filling out forms before you even get to the item’s price with tax, shipping, and, perhaps, some extra fee snuck into the total. How great if you could just ask for what you want: a new product, an answer about the site, or a particular item! Welcome to conversational commerce, an emerging capability to prioritize direct, natural conversations between buyers and sellers.10 At the intersection of customer experience (CX), user experience (UI), and digital commerce lies a competitive advantage for companies who get conversational commerce right. These experiences influence would-­be customers by streamlining and improving virtually every interaction they have in their online buying process with your company. For example, AI creates recommendation engines based on prospective customers’ browsing histories, preferences, and interests. This level of experience personalization improves relationships and brand loyalty. I’ve long been fascinated by how we buy, not just products and services but also information, credibility, believability, and solutions to our problems. I mentioned an early use of this research in Chapter 4 of my book, Co-­Create, in the context of the customer experience journey in any industry ecosystem (Figure 6.2).11  “How Conversational Commerce Solves Today’s CX and Ecommerce Challenges,” Emplifi,February 21,2022,https://emplifi.io/resources/blog/conversational-­commerce-­ cx-­ecommerce-­challenges

10

 David Nour, Co-­Create: How Your Business Will Profit from Innovative and Strategic Collaboration (St. Martin’s Press, 2017).

11

194

Relationship Economics

Figure 6.2  Customer Experience Journey

I described how all customers begin their six-­stage buying journey with an evaluation of the experiences in their lives at the center. They become increasingly aware of their pain and move to a discovery of crucial needs and wants. Using their requirements as criteria, they begin to consider options. They return to evaluation with possibilities before committing to a purchase. As they use the product/service for their needs, they return to evaluation to consider a more profound relationship, such as buying more seats or a broader suite of products or services. During the evaluation phase, they may also pursue alternative purchases. The infinity loop reflects this constant process—­now under AI’s greater scrutiny—­to better understand, anticipate, and guide the buyer’s journey. For the past two years, our team has interviewed over 100 chief revenue, marketing, and customer officers, particularly those leading the recurring revenue/subscription software-­as-­a-­service (SaaS) business models, about the ideal customer lifecycle they aim to create for their customers. As a result, we’ve coined our finding the Customer Lifecycle Journey Maturity Model. Through a series of unique stages, the organization aims to understand their customers’ individual buying intent, needs, and actions and directly align how they sell to how their customers buy (Figure 6.3).

The Role of AI in Strategic Relationships

195

Figure 6.3  Customer Lifecycle Journey Maturity Model

A recent survey revealed that 41 percent of global marketers responding had seen an increase in revenue and profit growth from using AI in their marketing campaigns.12 AI-­powered tools are helping companies deliver the right offer, message, timing, and channels while learning a great deal about their customers. In engaging their customers, companies can also create compelling content and produce highly personalized campaigns. In addition, AI can use customer data to provide accurate insights and suggest intelligent marketing solutions that directly reflect profits. The journey often begins with a digital on-­ramp where a prospective buyer is exposed to some aspect of the need ecosystem (intrigue, search, cross-­reference, or mention of perceived or realized pain). Then, the following seven phases flow in a sequence where marketing, sales, and channel partners/distributors must work seamlessly to earn the buy. The following are foundational to the initial sale and, beyond that, to a lifetime value (LTV) analysis of every customer relationship. 1. Awareness—­Once buyers are targeted, the focus moves to each one’s needs. Sellers aim to differentiate themselves in  “2021 State of Marketing AI Report,” Drift Insider, https://www.drift.com/books-­ reports/state-­of-­marketing-­ai/#Marketing+AI+Survey%3A+Key+Findings

12

196

Relationship Economics

the ecosystem to enjoy a unique position in potential buyers’ hearts and minds. 2. Engagement—­Identifying the real and pressing needs (vs. ideal wants) is the focus in this phase, with a deeper dive into alignments with the seller’s solution. AI systems learn from, analyze, and measure the above marketing efforts. These systems track media activity and provide insights into relationship development efforts to highlight what is driving traffic, engagement, and purchase. As a result, companies can offer better and more accurate marketing services to their customers. By understanding the critical attributes of their loyal current customers, companies can develop precise marketing strategies and retarget look-alike prospects who have expressed interest in products or services. The more companies understand their customers, the better they serve them. AI can assist companies in this task and support them in giving customers personalized experiences. For example, you visit an online store and look at a product but don’t buy it. Afterward, you see that exact product in digital ads. Companies can also send personalized emails or special offers and recommend new products that match your tastes and engagement preferences. 3. Evaluation—­ This is where key stakeholders and their unique requirements are identified, and potential Proof of Value is deployed. Some organizations call this Proof-­of-­ Concept to align the relevant priorities of the buyer with the special features the seller offers. AI allows automatic and accurate sales forecasts based on customer contacts and previous relationship interactions. Hewlett Packard Enterprise indicates a “5x increase in forecast simplicity, speed, and accuracy” with Clari’s sales forecasting tools.13 4. Purchase—­At this phase, the buyer perceives that the needs are, or can be, met by the seller, and the relationship is   “What Our Customers Are Saying,” Clari.com, https://pages.clari.com/rs/866-­ BBG-­005/images/Clari_What%20Customers%20Are%20Saying_v1.3.pdf

13

The Role of AI in Strategic Relationships

197

clinched through buying. In this phase, the business relationship really starts. Here sellers may validate their selling cycles while confirming the buying journey stages. Every organization’s customer relationship management (CRM) platform should be recognized as its single source of revenue growth truth. Data from various sources in each lifecycle journey stage can be effortlessly and intelligently copied into the CRM platform, automatically syncing calendars, address books, emails, phone calls, and messages by the salesforce. AI can score and thus prioritize leads based on various contact factors, automating sales forecasting with increased accuracy. Preferences and engagement behaviors of high-­priority leads can be analyzed to match them with the content designed to answer their most important questions. 5. Adoption—­ After the customer commits to buying, the implementation and training occur, and usage begins. Chatbots are ideal for answering customers’ first questions. If the chatbot concludes that it cannot serve the customer, the customer is passed to human agents. AI can be leveraged to coach sales reps and customer service employees by suggesting responses during live conversations or written messages in each interaction. Bots can listen to agents’ calls and offer best-­practice answers to improve sales and customer adoption. This situation can help the company’s sales and customer service professionals find the right way to deal with issues, leading to more robust customer adoption and satisfaction. 6. Impact—­If value was promised in the previous five phases, the value must be delivered as well as a quantifiable return on the invested time, effort, and resources (capital, capacity, credibility of the sponsoring executive) realized. Value creation is ideal if buyers and sellers co-­created impact; otherwise, the context is purely transactional and not a potential transformational relationship. Businesses can leverage NLP and machine vision to identify customers for automatic contact or assignment to relevant agents to increase customer satisfaction. AI also digitizes and delivers real-­time content such as instructional videos and product-­to-­outcome results

198

Relationship Economics

and guides in the most efficient use of products and services. AI combined with Augmented Reality/Virtual Reality makes field service and support dramatically more manageable, cheaper, and effective in onboarding customers. 7. Evangelize—­The next phase is where the buyer chooses to deepen the relationship and become a strong proponent or, perhaps, an evangelist of the seller. Some satisfied customers renew their relationship, while others expand it (think of a three-­or even a five-­year commitment). In this phase, buyers may participate in case studies and user groups and speak independently as a reference for the seller with prospects, partners, or investors. Transactional fraud and fake reviews are two significant issues for a company’s credibility. AI can detect changes in transaction patterns and other red flags that can signify fraud, which humans can easily miss, thus saving businesses from significant loss. Beyond the initial digital on-­ramp, the lifecycle offers two other injection points. 1. Product On-­Ramp—­ Between the Engagement and Evaluation phases, this is your classic freemium model, where the buyer has an opportunity to try—­for a limited time or scope of functionality—­ the potential solution. Through their diligence, independent of the seller, the buyer has become aware of the product or service by the company and engaged autonomously to move more quickly to their evaluation phase. 2. Deployment On-­Ramp—­Soon after the Purchase and the Adoption phases, the customer may realize a need for additional users, access, and a global footprint of the solution vs. a regional one. They commit to additional seats, usage, or a broader solution footprint here. The most successful organizations that have designed or deployed AI platforms aim to remove the friction between each of the above

The Role of AI in Strategic Relationships

199

phases, continuously learn, eventually anticipate customer expectations in their buying journey, and quickly close the gap between how customers buy and how the organization sells. Optimizing the lifecycle includes providing customers with near real-­time answers to critical questions in deploying AI chatbots. They tend to be available all day, every day, learn from every interaction, and escalate the request to a human agent at any time, at which point the agent can see a complete record of the exchange to that point. Thus, the customer has a seamless experience. Today’s sophisticated buyers expect a high level of personalization. AI makes personalized engagements and supports a reality. Organizations that deploy AI gain a competitive edge, like using a professional, polished associate in any store, contact center, or enterprise seller. Another fascinating contribution of AI to the customer lifecycle journey is the acquisition cost of net new customers. When organizations heavily invest in the left-­hand side of the infinity loop (Awareness, Engagement, Evaluation) and the customer, for whatever reason, doesn’t buy, that’s a painful and expensive process. At every interaction, AI engines help sellers get buyers over the purchase phase. The difference between conversion and abandonment rates could translate into millions of marketing and sales dollars. Sales data analysis firm Gong analyzes interactions between salespeople and customers to help sales professionals communicate better and close more deals. Gong leverages ML and NLP to index customer emails and video calls and gathers qualitative insights from quantitative customer data to craft better pitches and adopt the more persuasive and empathetic language. Gong isn’t a small startup proselytizing AI. It was most recently valued at $7.25 billion, and its roster of clients includes companies such as Accenture, LinkedIn, Service Titan, Slack, PayPal, Zillow, and many others.14 In early 2020, as the pandemic forced global lockdowns, Zillow began using Gong to help its sales professionals transition from  Ron Miller, “Gong Going Gangbusters, Grabs $250m Series # on $7.25B Valuation,” TechCrunch,June 3,2021,https://techcrunch.com/2021/06/03/gong-­going-­gangbusters­grabs-­250m-­series-­e-­on-­7-­25b-­valuation/

14

200

Relationship Economics

in-­person to virtual sales. Zillow created a video tour and paired it with Gong trackers to monitor which key phrases helped close more deals. Zillow also used Gong’s Whisper product, which ranks sales team members on performance, to determine the differences between top performers and the rest in terms of communicating and pitching so that managers could institutionalize those best practices.15 In the post-­ purchase Adoption, Impact, and Evangelizing phases, AI platforms provide superior customer service that builds loyalty, generates repeat/referral opportunities, and accelerates a customer’s journey from Purchase to Evangelizing. Although AI cannot yet eliminate the human role in customer service, it can free live agents from mundane tasks, routine questions, and search for relevant answers. In addition, freeing up the time/bandwidth of customer success professionals allows them to focus on more complex and sensitive challenges, often requiring skills the AI platforms don’t yet possess. If you have talked to a customer before, Cyrano.AI has patented technology that analyzes previous conversations to create a customer profile, which might include the customer’s communication style, identified priorities or goals, and even the apparent commitment level. For example, by reviewing the call’s emotional moments and how they drive motivation, you could alter your presentation to the customer’s personality type and see how he or she responds. Customer success leaders can get real-­time text prompts and tips to close more deals, handle objections, or empathize with unhappy customers in real time. Cresta, for instance, uses AI to give call center workers feedback through text prompts so they know what to say in the most common situations. For example, if a customer has an objection, the technology provides a step-­by-­step prompt to help reps overcome it. An unhappy customer? The technology offers vital phrases or words to calm the customer.16  “How Gong Helped Zillow Thrive During a Global Pandemic,” Gong.io, https:// www.gong.io/case-­studies/how-­gong-­helped-­zillow-­thrive/

15

 “Real-­Time Intelligence for Contact Centers,” Cresta.com, https://cresta.com/why­cresta/

16

The Role of AI in Strategic Relationships

201

EarthLink, a privately held Internet service provider, used Cresta to modernize its contact center operations, helping its agents communicate with more empathy. In its first month with Cresta, EarthLink reported an 11 percent reduction in average handle time and a 124 percent improvement in value-­ added services conversion rate—­ significant successes by any measure.17 Hopper uses AI to predict when a traveler should be able to book the lowest prices for flights, hotels, cars, and vacation home rentals. The company’s AI platform scans hundreds of bookings to present the most up-­to-­date prices. Then, using historical flight and hotel data, Hopper can advise the user if the booking has likely reached its lowest price point or if a short wait may see the price drop. Hopper’s AI-­based algorithm has saved users more than $2.2 billion on flights alone.18 Within four years of launching its first chatbot, LivePerson’s customer service platform has turned conversational AI into an everyday reality. For example, it can help Dunkin’ customers sign up for its loyalty program via adding QR codes to food packaging at 9,000+ stores. In addition, LivePerson is helping to administer COVID-­19 screenings in various workplaces. In 2021, LivePerson added AI Annotator, letting company reps fine-­ tune bots. The reps identify areas for improvement and propose fixes, thereby democratizing a process that formerly required data-­science expertise. While only 25 percent of LivePerson chat interactions are fully automated, founder and CEO Rob Locascio expects that percentage to hit 75 over time. “I don’t see a world where we’re going to be talking to call-­center agents in the next four or five years,” he shared with Fast Company in its 2022 ranking of the Most Innovative Companies.19

 “Modernizing Contact Center Operations at Earthlink,” Cresta.com, https://cresta .com/case-­studies/earthlink/

17

 “We Build Travel Products That Save Customers Money,” Hopper, https://www .hopper.com/company/

18

 Harry McCracken and Mark Sullivan, “The 10  Most Innovative Companies in Artificial Intelligence of 2022,” Fast Company, March 8, 2022, https://www.fastcompany .com/90724347/most-­innovative-­companies-­artificial-­intelligence-­2022

19

202

Relationship Economics

Juniper Research forecasts that 1.4 billion people will use facial recognition technology to authenticate a payment by 2025, more than double 2020’s number of 671  million.20 Mastercard is exploring AI-­based biometric payment methods, like facial recognition and fingerprint scanning. For example, a user would authenticate payments at the checkout by showing a face or a palm instead of swiping a card. “All the research that we’ve done has told us that consumers love biometrics,” Ajay Bhalla, Mastercard’s president of cyber and intelligence, told CNBC.21 “They want to make a payment at a store to be as convenient as opening their phone.” Mastercard’s vision is to make the tech globally interoperable, Bhalla said. “So, once you’ve stored your credentials, you could use this anywhere.” LinkSquares uses machine learning to automate the understanding of contracts, eliminating the need to “keep on top of everything,” from terms and conditions to legal obligations to renewal dates. By doing so, its customers can streamline risk assessments, privacy audits, and other processes that require a thorough understanding of the contractual lay of the land—­all without dependence on costly outside counsel.22 After more than 1,000 percent growth in two years, LinkSquares has digested more than 3 million contracts and extracted more than 40  million data points. In 2021, new integrations with Salesforce and DocuSign helped LinkSquares’s customers integrate its tools into their daily workflows. The company also bolstered its AI with new features specific to critical issues, such as ensuring compliance with the California Consumer Privacy Act.

Predictive Analytics and Relationship Intelligence Predictive analytics uses current and historical data to forecast activity, behavior, trends, and intent. It involves applying statistical analysis  “Facial Recognition for Payments Authentication to Be Used by Over 1.4 Billion People Globally by 2025,” Juniper Research, April 12, 2021, https://www .juniperresearch.com/press/facial-­recognition-­payments-­authentication-­users

20

 Ryan Browne, “Mastercard Launches Tech That Lets You Pay with Your Face or Hand in Stores,” CNBC, May 17, 2022, https://www.cnbc.com/2022/05/17/ mastercard-­launches-­tech-­that-­lets-­you-­pay-­with-­your-­face-­or-­hand.html

21

22

 “Unleash The Power Of Your Contracts,” Linksquares.com, https://linksquares.com/

The Role of AI in Strategic Relationships

203

techniques, data queries, and AI/ML algorithms to data sets to create predictive models with a numerical value or a score on the likelihood of a particular action or an upcoming event. When done ethically and in the proper, value-­based context, this approach could dramatically amplify business relationships’ planning, execution, and impact. Five major types of analytics23 are particularly relevant to business relationships (Figure 6.4): 1. Descriptive—­This is the most common type of business relationship analytics in helping you understand what has happened. 2. Real-­Time—­ Particularly useful when immediate insights are critical, this technique analyzes data as it’s generated, collected, or updated. 3. Diagnostic—­Beyond answering what questions with the above model, this technique explores why something happened. 4. Predictive—­This technique looks at past and present data patterns and projects them forward to help you understand what is likely to happen. It mitigates potential risks in the relationship and capitalizes on opportunities to add value. 5. Prescriptive—­Continuing to build on data and insights from the above two models, this technique prescribes or automatically takes the next-­best course of action.

Figure 6.4  Five Types of Analytics

 Lind Tucci, “What Is Predictive Analytics? An Enterprise Guide,” TechTarget, December 2021, https://www.techtarget.com/searchbusinessanalytics/definition/ predictive-­analytics

23

204

Relationship Economics

Predictive analytics are essential to business relationships because mentors, perhaps parents or grandparents, have connected in person, taken their time to get to know someone, with multiple visits, and a relationship nurtured over a drink—­alcoholic or not—­or a meal is quickly dying. But unfortunately, learning from experience, especially mistakes, takes too long for most professionals and their ever-­shrinking attention spans. “Forget three strikes; the reality nowadays is more like ‘One strike, and you are out,’” wrote Dursun Delen, professor of management science and information systems at Oklahoma State University, in his Introduction to Predictive Analytics: Data Mining, Machine Learning, and Data Science for Practitioners.24 Data is the lifeblood of business relationships and, increasingly, has become renewable energy in value creation in every ecosystem of seekers and solvers. Massive amounts of data from relationships are captured and analyzed every minute. The data set includes each step in the buyer’s journey: when a candidate or a business partner looks at an email, the prospect clicks on a link, when/if a colleague forwards a message, how much time someone spends consuming content, how frequently they visit complementary and competitive sites, audience defections, customer complaints, late payments, credit defaults, and fraud. Data have become so ubiquitous that merely having access to more or better data is not a key differentiator from others competing for the same mind share and wallet share. Today, your ability to understand and act quickly on that data affects business relationships’ outcomes and impact. Such understanding and related action options require predictive analytics and relationship intelligence.25 When predictive analytics and relationship intelligence are combined, you have a leg up on your competition by looking for meaningful patterns in the cumulative data and then forecasting with a high degree of confidence behavior models of what is likely in the future. Will that relationship gravitate toward a perceived value-­add, highly 24  Dursun Delen, Predictive Analytics: Data Mining, Machine Learning, and Data Science for Practitioners, 2nd ed. (Pearson FT Press, 2020).

 Adapted from Donald Farmer, “Descriptive vs. Prescriptive vs. Predictive Analytics Explained,” TreeHive Strategy, December 15, 2021, https://www.techtarget.com/ searchbusinessanalytics/tip/Descriptive-­v s-­p rescriptive-­v s-­p redictive-­a nalytics-­ explained

25

The Role of AI in Strategic Relationships

205

relevant and personalized to their needs? As an employee, will that internal relationship use their current company to get a competitive job offer? Or will a customer get a better price from a competitor? Let’s look at several examples. The global health-­care sector has long suffered from skyrocketing medical costs, inefficient processes, and unequal access for those who need care. AI-­enabled virtual assistants reduce unnecessary hospital visits, which gives nurses an estimated one full day per week to handle other tasks. Workflow assistants free up 20 percent of doctors’ schedules. Pharmaceutical companies can conduct their research with only a fraction of the time and cost typically used. Let’s look at a few examples of how AI gives the maligned industry a much-­needed makeover. New York–­based Covera Health uses collaborative data sharing and applied clinical analysis to help reduce the number of misdiagnosed patients globally.26 Clinical intelligence reduces cascading effects of misguided care and saves the health-care industry billions of dollars by combining advanced data science with AI. As a result, practitioners can improve lives and save money with improved diagnostics and symptom data. In the middle of the North Carolina’s Research Triangle Park (RTP), Well’s AI-­driven “health engine” helps personalize guidance to  each user based on their pre­existing conditions, ongoing health concerns, and general health knowledge.27 With an estimated 80 percent of Americans considering themselves not engaged or only somewhat engaged in their health, the “engine” focuses on providing informed advice, screening, questionnaires, prescription support, vaccination advice, recommended doctor visits, and guides for specific conditions. Beyond health care, Citrine helps manufacturers of chemicals and materials reduce the time and risk involved by creating new products that are more sustainable and less dangerous—­an area they call materials and chemicals informatics. By combining data science, 26

 “Our Work,” Covera Health, https://www.coverahealth.com/

27

 “Your All-­in-­One Health Guide,” https://www.well.co/

206

Relationship Economics

materials science, and machine learning, its platform can speed up R&D efforts by up to 98 percent compared to traditional methods that rely more on conventional trial and error in compound assessments.28 In 2021, it added AI-­powered features designed to forecast the performance of new ingredients and assess whether various research directions will achieve key product development goals. That helped spur a 500 percent year-­over-­year jump in weekly active users: A polymer manufacturer, which produced new, lighter material for automotive use, and a specialty chemical company, which removed a hazardous ingredient from its product lineup. In a completely different industry, Surfline, once a pay-­per-­call wave-­forecasting service now online, has built a reputation for delivering subscription-­based surf reports since its launch in 1985. Surfline’s continuing crest still propels its passionate surfing community forward. In 2021, it unveiled a new wave-­forecasting engine that leverages advanced AI and machine learning. The engine performs more than a quarter of a trillion calculations daily, enabling Surfline to predict where waves will arise, how they will travel, and when they will arrive at the beach. Satellite observations of the sea’s surface are used to fine-­ tune these forecasts. Once Surfline understands where waves are tracking, it uses a machine-­learning system trained with 35 years of ocean observations to anticipate how they will transform into the surf in the lineup.29 So when the International Surfing Association needed to predict wave conditions around Tokyo during the Summer Olympics in 2021—­when the sport made its debut—­it tapped Surfline. “We build products for ocean enthusiasts,” CEO Kyle Laughlin said in a Fast Company interview.30 “But those ocean enthusiasts also use those products to solve bigger problems related to climate change or to help mitigate risk.” For example, the California State Parks Department uses Surfline to forecast coastal erosion patterns, and the Australian state of  Better, Sustainable Materials and Chemicals, “Citrine’s Software Platform Helps Scientists and Engineers Accelerate Product Development,” https://citrine.io/ what-­is-­materials-­informatics/.

28

29

 “Our Mission and Brands,” Surfline, https://careers.surfline.com/#culture.

 Jay Woodruff, “The 10 Most Innovative Companies in Sports in 2022,” Fast Company, March 8, 2022, https://www.fastcompany.com/90724478/most-­innovative-­companies-­ sports-­2022

30

The Role of AI in Strategic Relationships

207

New South Wales uses it to predict conditions that increase the risk of drowning along its beaches. These are just a few platforms utilizing AI/ML and predictive analytics to identify, nurture, and sustain deeper relationships with their stakeholders. A more elaborate and updated list can be found in the Nour Forum online community in the RE3 group (NourGroup .com/Forum).

Future of Work and Business Relationships In many aspects of our work, the applications of AI/ML in business relationships are in their infancy. Nevertheless, our research points to AI/ML replacing mundane human tasks while allowing us to excel at creative endeavors and interpersonal relationships. I believe AI will help us do better work, improve our relationship and emotional intelligence, and the manners and mediums through which we’ll engage and influence our relationships. AI algorithms improve daily in their emotion detection, NLP, and computer vision, combined with psychology and linguistics to detect, analyze, and process tone, pitch, facial expressions, eye contact, body language, and other nonverbal communications influence others. When AI is integrated into relationship conversations, whether voice, video, or text, it can take complex data and identify patterns in effective communication not apparent to the naked eye. Every professional role requiring strong communication skills, including management, leadership, product management, virtual therapy, teaching, coaching, and public speaking, will benefit from AI that measures relational and emotional intelligence. The combined emotion detection and conversational AI market are projected to grow to more than $55 billion by 2026.31,32  “Emotion Detection and Recognition Market by Component, Application Area, End User, Vertical and Region – Global Forecast to 2027,” Markets and Markets, https:// www.marketsandmarkets.com/Market-­R eports/emotion-­d etection-­r ecognition-­ market-­23376176.html

31

 “Conversational AI Market Worth $18.4 Billion by 2026,” Markets and Markets, https://www.marketsandmarkets.com/Market-­Reports/conversational-­ai-­market­49043506.html?gclid=Cj0KCQjwxIOXBhCrARIsAL1QFCZTaB3q5gTIvksrZZhpQY WSSAnH_7wONpT0njkIRqVYr_gyUGSIC20aAjoREALw_wcB

32

208

Relationship Economics

For the past decade, I’ve been analyzing more than 200 emerging technologies to illustrate the convergence of the most pressing ones in the future of how we’ll work and, more importantly, how business relationships will evolve. Technologies such as AI, virtual reality (VR), augmented reality (AR), blockchain, drones, Internet of Things (IoT), robotics, quantum computing, and 3D printing continue to evolve and have gained significant momentum in mass adoption through the global pandemic. The convergence of these technologies will create a wave of innovations that will significantly expand our capacity to work smarter, more collaboratively, and seamlessly. Here are the five I’m most excited about relating to business relationships. 1. Natural Interactions—­For business relationships to work more effectively, they must be able to interact with technology in a natural, fluid way. AI-­powered platforms enable more realistic and frictionless interactions between humans, computers, and digital ecosystems, creating instantaneous access to high-­ value information. Golden insights will improve understanding of prospects, customers, partners, investors, and the general market at large, with predictive insights on their intent, drivers, and behaviors delivered in the most human way possible for immediate, relevant, and personalized action. Increasingly, AI will interact with people in human-­like ways, answering their questions, delivering relevant content and context, generating leads, and helping buyers of information, products, and services through their buying journeys. In addition, AI will power immersive interfaces beyond voice to include our senses and other perceptions. Human attributes such as touch and emotions will bring users closer to the digital world by humanizing interactions. Researchers at MIT Media Labs Fluid Interface Research Group use synthetic media created through AI algorithms to

The Role of AI in Strategic Relationships

209

develop “deepfakes for good.”33 These computer-­generated videos have been tested in early use cases, including: • Film industry—­creating accurately rendered footage of an actor as older or younger versions of themselves. • Museums—­allow visitors to learn from interactive versions of a painting—­for example, the Mona Lisa narrating her origin story. • Corporate training or education—­AI and AR enable customized remote learning of a topic by a historical figure, celebrity, or other notable people of the learner’s choosing. For example, learn physics from Albert Einstein or get coached by your favorite CEO. • Multinational—­widely shared customer training or corporate messaging through instant transcription, translation, and lip-­synching of an original video to multiple languages. 2. Predictive Success—­Machine learning will enable business relationships to construct predictive models based on patterns of event types, past behaviors, and attractive attributes while correlating all more or less with eventual success. When we know our relationship’s next steps with high confidence, we can better predict success and minimize or even avoid failure altogether. Predictive models will result in more sophisticated hiring models, supply chain dynamics, marketing campaigns, sales strategies, and product or service development aligned with current or impending market needs. With an increased volume of data, we’ll see more, faster, and more accurate predictions of relationship needs, challenges, and opportunities, often before the people/businesses involved even perceive them.  “AI-­Generated Characters for Learning and Wellbeing,” MIT Media Lab, May 24, 2021, https://www.media.mit.edu/projects/ai-­generated-­characters/overview/

33

210

Relationship Economics

3. Real-­World Augmentation—­Enhanced performance and accuracy of AI technologies will create virtual sophistication to augment our real-­world experiences—­what is increasingly being referred to as extended reality (XR) to the tune of a $1.5 trillion boost to the global economy by 2030.34 Augmented reality (AR) and virtual reality (VR) will create mixed reality (MR) of real-­time, relevant content, triaged based on immediate needs, presented at the time and on the device/medium of the other’s choice. In addition, results from past and present engagements will fuel financial, educational, and motivational goals for each interaction in terms of information presentation, conversion of raw data into actionable insights, and increased usage of natural language and gestures, all based on each relationship’s preferences or requirements at critical moments. XR will create new experiences: job aids to simulations for practicing high-­risk tasks. XR can train pilots, educate oil rig workers on safety and security measures, teach insurance adjusters to identify various types of damage and upskill doctors to perform new surgeries. Collaborative VR environments will continue to dramatically make hybrid work—­and relationships—­more productive. VP can also help organizations upskill their talent much faster and accelerate their relevance, thus reducing the impacts of talent churn and shortage. Design teams can explore, test, and evaluate different proposals without investing in physical prototypes, thus reducing costs and promoting a culture of experimentation. 4. Segmented Ecosystems—­AI models will seamlessly augment static data with real-­time insights, events, and experiences. Having a far more targeted and accurate set of measures, triggers, and segmentations leads to less friction and more relevant relationship experiences across our lives.  Jeremy Dalton and Jonathan Gillham, “Seeing Is Believing: How Virtual Reality and Augmented Reality Are Transforming Business and the Economy,” PWC, https:// www.pwc.com/gx/en/technology/publications/assets/how-­v irtual-­r eality-­a nd-­ augmented-­reality.pdf

34

The Role of AI in Strategic Relationships

211

5. Automating Trust—­At the intersection of blockchain, IoT, and AI lies the authenticity—­of data, identities, and multiparty transactions. For example, IoT sensors can track a pallet of vegetables from the farm, through the supply chain to the warehouse, and on to retail stores. Authenticating its location en route and product freshness in a secure, immutable blockchain assures buyers of authenticity. Likewise, manufacturers will deepen their relationships through securely connected ecosystems. In health care, physician networks and hospitals can use trusted tech to confirm each new clinician’s credentials, regulatory compliance, and more. Utilities can onboard contractors and hire extra crews to respond faster to disasters. Startups to mature organizations can deepen their relationships with investors, regulators, and customers through transparent reporting while reducing potential risk. We covered a lot of ground in this chapter. However, the implications of advanced tech in business relationships continue to be incredibly fluid. Although negative use cases of some of these technologies have dominated the conversation thus far, I believe more positive AI-­powered platforms and ecosystems will emerge in the coming years to enhance our business relationships. I can’t wait. Let’s wrap up this book with the last chapter on what I call my Star Wars trilogy: Relationship Economics, Co-­Create, and Curve Benders.

212

Relationship Economics

Chapter Six Summary • AI- and ML-­powered technologies such as Robotic Process Automation (RPA) are permeating every phase and type of business relationship—­from employee and partner interactions to customer buying journeys. • The Customer Lifecycle Journey Maturity Model includes eight phases of the customer’s interaction with a supplier of needed goods or services. • Conversational AI refers to the emerging capability of AI to smooth the online purchase experience for would-­be customers by using natural, direct human-­like interactions. • Predictive analytics uses current and historical data to forecast activity. Like all science-­based studies, it began with describing the phenomenon; from there, it progressed to explaining and predicting. • Virtual Reality and Augmented Reality offer a low-­risk, low-­ investment method of extending a customer’s understanding of a product or service and training new employees in tasks that provide significant risk or require unobtainable materials to master.

Chapter 7

Relationship Economics, Co-­Create, and Curve Benders In the previous chapters, my focus has been to help you understand the following issues: 1. Business relationships are more than a “nice to have.” 2. Relationships should be more than a simple transaction. 3. Creating a job description and shoving someone in it is not sustainable if you don’t create a culture where they feel they belong to something more than a paycheck. 4. Project plans are dramatically more effective if you prioritize relationships with key stakeholders. 5. Supply chains move more smoothly if you connect the relationships. 6. Beyond relationship creation, it takes resolve and diligence to bridge your efforts to relationship capitalization. In essence, you must go beyond intellectually understanding the importance of business relationships to grasping their significance in every facet of your work and life. In this final chapter, I want to help you see what I refer to as my Star Wars trilogy of Relationship Economics, Co-­Create, and Curve Benders. Suppose you watch the original Star Wars movies. In that case, in Episode IV (A New Hope), Episode V (The Empire Strikes Back), and Episode VI (Return of the Jedi), individually, you’ll get to know Luke Skywalker. Watch all three, and you’ll know him much better. That 213

214

Relationship Economics

character development, which makes the story much richer through the series, is what I’ve tried to bring to my research, examples, and interviews over the past two decades in these three books. Let’s examine why they’re the building blocks of personal and professional success and glimpse where my curiosity and research in this field lead me next.

Business Relationships: Intentional, Strategic, and Quantifiable I’ve observed colossal missteps in the past two decades of studying business relationships. Everything from amateur salespeople reaching out without an ounce of due diligence to relationship Takers who only call when they want something. I’ve seen countless examples of laziness, haphazard or ad hoc touches, behavior unbecoming of a professional peer (vs. a subordinate vendor), and brilliant technologist CEOs who forgot or never knew that, regardless of our job title, we’re all fundamentally in the relationship business! I’ve observed leaders act with incredible shortsightedness when they dilute or damage a business relationship in the long term for a short-­term, often highly transactional, gain. I’m perplexed at how entrepreneurs and enterprise P&L leaders can completely shut off new and potentially life-­changing business relationships because they’re “too busy” to meet someone for a 15-­minute coffee. The offenders in these examples undervalue the laws of business relationships that govern every interaction. I’ve found Social Exchange Theory explains these laws well. So let’s explore what critical concepts and practices it can add to your personal and professional success, as well as specific examples of the irrefutable laws. I hope you’ll internalize and consistently practice the positive findings in your daily business relationship interactions. Social Exchange Theory proposes that social interactions result from a unique exchange process (Figure 7.1). The parties have definitive relationship phases with a unique set of dependencies. Both parties constantly evaluate how to maximize the benefits and minimize the



Relationship Economics, Co-­Create, and Curve Benders

215

Figure 7.1  Social Exchange Theory

costs in exchange. Professionals weigh the potential benefits and risks of business relationships every minute. When the perceived risks outweigh the rewards, business professionals abandon or terminate the relationships. The immediate Relationship Currency exchange I mentioned earlier is seldom of equal perceived value. As such, business professionals also constantly consider the value scale of the benefits vs. the costs of each relationship as the biggest driver of whether they choose to continue a social association. As the enabling subprocesses for nurturing and deepening the relationship ensue, specific characteristics emerge, from no interaction to interdependence. Here is what this means for every business professional (regardless of your age or professional pedigree): you must treat every business relationship like a theater act with Before-­During-­After phases: 1. Before: Neuroscience tells us that the initial reaction between two individuals is the exploration of comfort—­do

216

Relationship Economics

I feel comfortable with this person or not? Is this person a friend or a foe? Some people rub us the wrong way from the start. Others we click with immediately. Our unconscious minds make those determinations—­and they’re made very quickly. This single unconscious determinant will affect everything that follows. If we decide on a “friend,” the potential relationship is off to a good start. The following stages will have a significantly better chance of feeling natural, becoming productive, and being perceived as value based. The converse is also true: if we decide “foe,” then most next steps that follow will become much more difficult. Communication miscues will be far more common, and our enthusiasm for the subsequent stages will diminish precipitously. Avoiding communication missteps is the single biggest reason that how you show up early in every potential relationship will be critical to your ensuing success. • Intentionality in your business relationships begins with alignment—­where are you going, how will you get there, and which relationships (or what types of relationships if you don’t know the actual individuals you need) will be the strongest enablers of your path forward. If you believe that business relationships are critical investments in your personal and professional success, be discerning about the individuals you choose to invest in. • In 2023 and beyond, due diligence is table stakes: on the industry, the company, the individual, critical topics they may be struggling with, and their potential aspirations. Walking into any possible relationship without these insights will be at your peril because there is a good chance you’ll spend cycles creating little to no value for the recipient. • Give them a compelling reason to connect with you by appealing to their logical self-­interest. Relationships are often less about you and more about how others will be better off because of a potential relationship with you. So  much of our willingness to engage a new contact is



Relationship Economics, Co-­Create, and Curve Benders

217

predicated on our perceptions of value—­if I take the time to speak or meet with this person, how will I be better off because of the investment? • Remember information for them, not about them. This sage advice was a deeply rooted belief by my former CEO and long-­ time friend Bruce Kasanoff. We ran Accelerating 1to1 together back in 1999 and 2000. He believed, rightfully so, that remembering information about them was for your benefit—­often to spam people with unwanted or unneeded intrusions. But, conversely, remembering information for them was for their benefit, such as a richer experience. “Mr. Nour, as I recall, you prefer a hotel room as close to check-­in as possible, don’t you?” is always met with overexuberance at a Ritz-­ Carlton property because they’ve captured that preference in my profile. • Professional, Polished, Persistence. We’re all busy, so it may take a couple of times to reach a new contact. Professional, polished, persistence is the expected etiquette—­always. What you never want to be perceived as is a pest. I promise—­the 94th phone message, the 18th email, or the 72nd text annoys and dilutes your credibility more than they get you through. If they’re not returning your calls and emails, your perceived value proposition is not compelling enough, and you haven’t given them a reason to act in your favor. Savvy marketing professionals do A/B testing of their messages to ensure they try different unique selling propositions (USPs). Do the same with contacts you’re trying to reach—­change your approach, stop selling and engage them. I’ve often found warm introductions by a credible mutual source to be the best approach to get in the door. 2. During: Get beyond “friend or foe,” and you’ll embark on the relationship’s credibility and relevance earning phase. Suppose you can make an opportunity to engage your contact. In that case, the next big hurdle is where both sides

218

Relationship Economics

decide whether the other person knows what he/she/they are talking about and are they relevant to my current challenges or future aspirations? This phase can take a little investment (time, effort, and resources) to a lot longer, heavily depending on the geographic and cultural norms (in different parts of the United States and the world, the speed with which people get down to business vastly differs) and the deliberate opportunities for establishing the same. Both sides constantly evaluate the individual, team, and organizational power, access, and competencies. • Every referral is a recommendation—­I learned this from a mentor years ago. Think about it a second—­people we tend to refer to others are those we like, trust, and have had a constructive relationship with. I mentioned earlier that I often prefer to get introduced to new contacts through great current relationships. I’ve found that their known entity carries much more credibility and relevance and can pave a strong path for me to earn my own. Most relationships also seldom introduce us to jerks, difficult or unreasonable people. If you’re not getting referred to others, this would be an excellent time to ask, Why is that? Similarly, if you’re not referring some of your great relationships to each other, you’re missing out on the opportunity to invest in two unique relationships! • Your due diligence should become your relationship hypothesis: In the before phase above, I suggested that you must do your due diligence on the industry, the company, and the individual you’re engaging. Then, you need to make the time to synthesize that information and develop a hypothesis of their current challenges and future aspirations. In the during phase, there are several significant opportunities to test your hypothesis, knowing that even if you’re entirely wrong, it demonstrates the care to prepare, think, and suggest a credible and relevant path forward for the relationship.



Relationship Economics, Co-­Create, and Curve Benders

219

• Convey your credibility through the questions you ask: In every interaction, my favorite scenario is when they’re speaking 50  minutes of a one-­hour visit. It proves I’ve made them comfortable to share their perspectives. More importantly, it validates that my due diligence was on the spot, and my questions made them think about our interaction and conveyed my credibility. The fundamental difference between confidence and arrogance is the belief that there is nothing new you can learn. So put away your ego and approach every potential relationship with curiosity to understand where they’re coming from and where they’re trying to go in their journey from now to next. • Synthesize only the most relevant highlights: Most people don’t want or need to know everything you know; they simply want to know what they need to know to decide. To buy from you: information, products/services, and credibility; to join you, partner with you, invest in you or otherwise trust you as a guest in their journey. Stop sharing 178 slides—­no one cares. Stop the monologue—­ no one will remember your 12th point. The Recency Effect in psychology tells us that most people will only remember the most recent items you shared. Given our shortening attention spans, focus on the most relevant highlights to excite or disturb them, intercept their status quo, and push back on their assertions and assumptions. If you’re solution number 12 of the same thing I’ve seen repeatedly, you’ll seldom stand out in their hearts or minds. • Always leave them wanting more: Have you ever tried pushing a rope? Most will agree that it seldom works. What does work is pull or market gravity. So, what if you added so much value during each interaction, yet you left the other party wanting more? More questions, deeper discussions, better insights, and genuinely unique

220

Relationship Economics

perspectives! As a mentor drove into me years ago, “Always get your return ticket punched!” Then, when you leave others wanting more, they’ll take follow-­up calls, want to meet with you again, and prioritize your conversations, interactions, and unique value-­add. 3. After: With “friend or foe,” credibility, and relevance under your belt, the work to convert a contact into a lasting, mutually beneficial relationship can begin with your efforts to establish and cement an unwavering trust. It’s the longest of the three phases because trust takes regular cadence over time to develop. Each party must see the other behave in different, often less desirable circumstances. Stress, frustration, deadlines, organizational rules, demands by higher-­ups, and financial or otherwise resource pressures all change the natural state for most of us. Relationships in the spring season of their trust may even test each other for confidentiality, reliability, loyalty, and consistency. Do you deliver under pressure or otherwise unusual circumstances? Trust is complicated to establish and easy to violate, dilute, or break. When that happens, most of us fall back on competence. We may continue the relationship if the competence is perceived to be high enough to overcome trust concerns. Otherwise, the relationship tends to break down, dissolve irrevocably, or naturally wind down as one of both parties pursue other options. If the competence estimation is high enough, broken trust can be overcome. If not, the relationship can irrevocably break down. The final stage is a natural winding down of the relationship. It may be strictly defined by a work calendar or, less precisely, by a sense that the goals set at the beginning have been accomplished. If the work has been successful and the personal connections strong, there may be continued connections long after the essential work is done. • Trust = Credibility + Empathy over Time: there is no shortage of all that has been written about trust. My formula is simple to understand yet incredibly difficult to execute. When you combine your deep domain expertise in your chosen field with empathy for the recipient of



Relationship Economics, Co-­Create, and Curve Benders

221

whatever value you’re trying to add consistently over some period, you earn their trust. It’s not handed out, given, or left on sidewalks. You must earn it by how consistently you show up. Developing deep domain expertise takes a real commitment to excellence. You must know more about your products, services, industry, geography, strategic differentiation, competitive and complementary landscape. You should be able to justify your unique differentiation through case studies of successful outcomes, pitfalls most people will fall into, who are the most credible sources for additional insights, as well as the ecosystem of dependencies between various forces. That’s credibility. When you put all that aside and immerse yourself in the needs, conditions, intent, constraints, and the buying journey of your relationships, you begin to exercise empathy. Only when you combine the two and reliably demonstrate a long-­term view of the relationship will the other side feel trust in a relationship with you. • Follow Through vs. Simply Follow Up: one of the fastest paths to earning trust is to deliver on your commitments. Peel back an extra layer here, and you’ll quickly realize that some people simply follow up—­transactional at best. “Did you get that email? Great!” Others who take that same approach deeper, further, and focus on desired outcomes by their relationships, tend to follow through—­a process. “Did you get that email. Was it what you needed? How else can I help? Let me introduce you to these two other people who may also help,” and “Let’s touch base in a month on your progress,” is an example of demonstrating a vested interest in the results from the follow-­through process. • Output + Outcome + Impact: in so many relationships, within the organization and external to it, most people primarily care about the output from their work. Let’s say it’s a report they generated. I don’t want to take anything away from your efforts in creating that report or the

222

Relationship Economics

value  of that report. Yet, I’ve found that relationships value outcomes a great deal more. Let’s say the insights you can provide go along with that report. But let’s not stop there. What if you could also recommend actions to course-­ correct or amplify an effort from the insights from that report? The relationship is deepened, value is created, and you’ve set yourself apart because you didn’t stop at an output and took the relationship further to the outcome and ultimately impact. Here is the key—­the course correction couldn’t have happened without the insights, and the insights would be really challenging without the report. So you need all three. • Don’t Commit to More than Three Action Items: in most interactions, well-­intentioned people want to help. Amid the exuberance of a great discussion, creative collaboration, or a challenging problem-­ solving session, they commit to a series of action items. Then they leave the Zoom or the physical meeting and get overwhelmed with everything they have going on. So little to none of what they discussed or agreed to, and the other party now depends on what gets done. The result? Diluted, if not destroyed, credibility and trust. Instead, focus on no more than three action items from any interaction. Ensure they’re of the most significant value and make it a game to see how quickly and impactfully you can deliver on those commitments. Send that follow-­ up email, complete the committed introduction, and produce the presentation you promised in the meeting within a day or two, and you’ve just elevated your perceived value. Do it in a week or two, and it’s still appreciated. Get it done in 6 to 12 months, and the other person often forgets when you met and what you discussed so long ago! When it comes to value creation from a relationship interaction, the combined time and quality are of the essence. • Reciprocate First through the Three-­Touch Rule: as mentioned earlier in the book, business relationships thrive



Relationship Economics, Co-­Create, and Curve Benders

223

when both sides make a concerted effort to invest in the relationship. They genuinely believe and aim to improve the other person’s condition—­through sharing unique insights, independent perspectives, or invaluable relationships. That’s why I’ll go out of my way to invest in every relationship at least three times without asking for anything in return. That’s my three-­touch rule. Second, I  am looking for the subtle behaviors in every professional: gratitude, reciprocity, and paying it forward. When we all go out of our ways to help, support, bolster, or otherwise amplify the success of others, at some point, the other person should say thank you! Not today, tomorrow, next week, or next month, but at some point, they should ask how they can reciprocate your kindness. Lastly, I need to observe them investing in others. These are all behavioral evidence that the person fundamentally understands and profoundly believes that we’re all in the relationship business. If they miss any of them, my relational yellow flags go up. If they miss all three, my relational red flag goes up. Finally, I’ll continue to be polite; I simply disengage or deprioritize interacting with them because they’ve demonstrated that they don’t get it. And none of us can afford to continue to invest in others blindly. Before, during, and after are great reminders to bring the social exchange theory to life in your personal and professional life. When you’re consistently strategic and intentional about the relationships you choose to invest in over time, you’ll discover that the quantifiable aspects begin to shine. Considering customer acquisition cycles and costs, I know sales professionals who haven’t had to cold-call for years. Similarly, consider the cost of attracting and retaining exceptional talent—­I know professionals who haven’t had to put a résumé together since they left their first job! Consider the quality of deals and a return on investments as an angel investor. One former tech exec friend is an angel investor in 30+ tech startups, all through relationships he has nurtured from his first job out of college with several successful exits. How about the cost of, and distractions from, the core business in raising capital? Another entrepreneur I know built three billion-­dollar

224

Relationship Economics

valuation tech companies from the same angel and institutional investors group. These people figured out how to become more intentional, strategic, and quantifiable in their business relationship investments. To summarize, some contacts you’ll meet become relationships through the exchange of value. In addition, a subset of that group over time will become strategic relationships due to their relevance to your growth journey ahead.

Unique Value Creation: When No One Has All the Answers For decades, we’ve understood collaboration is critical to the success of most organizations. Yet, most organizations fall incredibly short in helping their talent pool build their relationship-­development skills. As one of the most pervasive functions we all perform at work, we tend to collaborate more than any other task in our daily lives—­from meetings to project plans, managing up, down, and across business units, levels, sectors, and geographies. Yet, research shows despite the pervasive nature of collaboration, a great deal of headwind remains in relational challenges. Combine this challenge with data pointing to only 7 percent of companies delivering growth by unifying creativity, analytics, and purpose, and you’ll begin to understand the power and promise of co-­creation. As the pandemic affected every aspect of our lives, it forced customers and businesses to explore new digital ways of working, shopping, relaxing, engaging, and defining highly integrated behaviors or work and play. The pandemic also dramatically shifted the role of many leaders in a proactive approach to drive growth. Dynamic market ecosystems where the only reliable constant is the rapid pace of change create challenges and opportunities for incumbents and new entrants alike. Breakthrough ideas underpin bold, imaginative campaigns to gain mind share and wallet share. Individual leaders, teams, and organizations who can think and dream big open their aperture to new ideas, approaches, processes, and platforms to exceed relationship expectations. By taking a deeper and more meaningful 360-­degree view of their relationship needs, wants,



Relationship Economics, Co-­Create, and Curve Benders

225

intent, and behaviors, they tend to uncover unmet needs. When speed and granularity, delivered through analytics, are combined with innovative, breakthrough creative ideas and programs, the results resonate with relationships in a meaningful way. Existing customers are drawn to new products or services. Channel or distribution partners believe in the new go-­to-­market strategy. Investors double down on subsequent rounds of funding to fuel creative growth. Employees are excited to be part of something unique, fresh, purposeful, and fulfilling in their work. Often, these insightful analytics and creative ideas are not the core competency of a single organization. As such, they embark on three traditional types of collaboration models: 1. Partnership/Alliance—­ This is when two organizations come together and bring their unique offerings, such as the OEM product combined with the service delivery of a reseller or integrator. Partnerships or alliances are the most common type of collaboration as each organization stays in its “wheelhouse,” and their combined efforts create a unique value-­add—­a classic case of 1 + 1 = 2. 2. Joint Ventures—­This model is when two organizations form a new entity to go after a market opportunity under a new name, brand, or solution. Pharma and tech companies often do this to improve their competitive posture. Sony Ericsson comes to mind as a mobile handset brand to compete against Apple and Nokia, or BMW JV with Louis Vuitton to introduce a hybrid i8 car into the luxury market where Vuitton is well-­known. You could consider this as 1 + 1 = 4, as new entities often create net new growth (exponential growth) 3. Mergers/Acquisitions—­This model is when one organization acquires another (hint: there is no such thing as a merger of equals; someone is always buying someone else!). Some are to extend one organization’s product line. Others aim to integrate their markets vertically. Others are part of a roll-­up strategy. There are also opportunities to acquire a company’s talent, tech, customers, or distribution channels. For example, various acquisition growth strategies include AOL and

226

Relationship Economics

Time Warner, Verizon and Vodafone, Dow Chemical and DuPont, Glaxo Welcome and SmithKline, eBay and PayPal, and Heinz and Kraft. I would submit that there is a fourth option: Co-­Create! It’s a proactive approach to bringing two or more parties together to create a highly differentiated/unique value, where all parties have a long-­term vested interest in its success. Since Co-­Create: How Your Business Will Profit from Innovative and Strategic Collaboration (St. Martin’s Press) was published back in 2017, I’ve found countless often overcomplicated models with customer and supplier domains, existing value, encounter domains and knowledge, creators within the organization, and consumers external to it—­I’m sure they make brilliant academic papers. The challenge continues to be myths and misperceptions about what co-­creation is and why it matters for many leaders, their teams, and organizations to remain relevant. Let’s discuss what Co-­Creation isn’t! • It’s not a sales pitch. For example, one of the Big Four accounting firms has a creative innovation group that touts, “Bringing together value architects from across the firm, we’ll work alongside your team to co-­create and problem-­solve!” • It’s not social media opportunities to engage a customer. • It’s not brainstorming advertising taglines or product ideas. General Motors invited customers to tweak its advertisements, resulting in a rash of ads criticizing its SUVs as gas-­guzzlers that contribute to global warming. • It’s not a campaign! Ask Henkel, a prominent German manufacturer of detergent and other products. It ran a contest in which customers could submit innovative packaging suggestions—­and was deluged with negative ideas. (One was a label describing the detergent as “Yummy Chicken Flavor.”) • It’s not exclusive to input from customers. Several research studies have demonstrated their bias and myopic lens by focusing on direct input from customers. I’m not sure any customers asked Steve Jobs for an iPod or an iPad. As in the case of



Relationship Economics, Co-­Create, and Curve Benders

227

most market makers, the customers seldom initiate bold innovation strategies. • It’s not an open innovation platform. Unilever has a public webpage presenting specific challenges and encouraging individuals to submit ideas. If a suggestion is successful, the submitter can be offered a commercial contract for their solution. • It’s not PR. Search the IBM Newsroom for Co-­Create, and you’ll come up with no fewer than 77 results based on relevance. The first is a press release about how “IBM Works with Discover to Co-­Create Technology Solutions and Migrate to a Hybrid Cloud Platform.” IBM published a 2010 Global CEO Study, which surveyed 1,500 CEOs from 60 countries and 33 industries worldwide to uncover that “more than rigor, management discipline, integrity or even vision—­ successfully navigating an increasingly complex world will require creativity” (Figure 7.2).

Figure 7.2  CEO Creativity Survey

228

Relationship Economics

That was an entire decade before the global pandemic, when in fact the rising complexity mentioned in the research became an even more significant uncertainty and risk to every organization. So how did the call for CEOs and their teams to “lead with bold creativity, connect with customers in imaginative ways and design their operations for speed and flexibility to position their organizations for twenty-­first-­century success” evolve? It didn’t. Co-­Creation begins where Relationship Economics leaves off—­a tenured, battled-­tested, mutually valuable business relationship where the parties have demonstrated a vested interest in each other’s success. It’s a fundamental mindset shift by three types of leaders in two or more organizations (they can, of course, all be the same person): 5. An Executive Sponsor: Because co-­creation is a marathon and not a sprint, it often faces organizational scrutiny, usually caused by short-­term pressures such as quarterly earnings or immediate milestones. This role is fundamentally focused on the long-­term viability of co-­creation and the material impact on the organization’s evolution. The executive sponsor must devise the “why” with a concise vision, mission, or enemy, lay the foundation for two or more parties to come together, and provide oversight on the progress. This role is also well suited to keep the organizational oncologists (legal, compliance, finance, HR, etc., intent on digging out any new shiny ideas and killing them) at bay through consistent macro-­ level updates. Without this role defined, no co-­creation effort should ever move forward as it will become an exercise in futility. 6. Strategist: This role is tasked with the value proposition design in the co-­creation process. They work intimately with their counterparts to prioritize strategic pursuits, identify market gaps, and home in on crucial differentiators in the evolutionary process. They also own the strategic relationship cadence in each party involved. Without a strategic vision and path to get there, the co-­creation process becomes a partnership, an alliance, and often a short-­lived, highly transactional relationship.



Relationship Economics, Co-­Create, and Curve Benders

229

7. Tactical Execution Owner: If the executive sponsor provides air cover and the strategist devises a road map, this role owns the boots-­on-­the-­ground execution. They ensure that the trains run on time, from resources and time frame to milestones, communication preferences, metrics, and compensation. Classic COO functions with deep organizational knowledge, relationships up, down, and across their organization, and the statesman/stateswoman demeanor to work with their counterparts and marshal the same sense of urgency and forward momentum in the other parties. Like the executive sponsor, without this owner, the co-­creation process is destined to putter out or fail outright. With the shared vision, mission, or enemy (think overregulation or price dumping by a foreign competitor) as the lighthouse in the co-­ creation process, we’ve found that three unique phases and 10 specific steps deliver results (see “The Co-­Create Canvas,”1 Figure 7.3): • Phase One: Laying the Foundation—­four key steps here, starting with: 1. The past material impact from all parties involved. Where has the relationship created a combined output, outcome, and impact in their respective business? The material impact is such a critical foundation and regrettably skipped by many because they “already know each other!” They don’t consider changing times, key positions, and market dynamics, and it is critical to recall the goodwill and value created in their relationship. It reminds both tenured and new relationships of where they’ve been together, scars from market battles, recoveries from misunderstandings or missteps, and how they’re genuinely better off because they’re in a relationship. If no past relationship exists, you’re co-­creating in a sand trap or on zero foundation, and it is destined to fail.

1

 David Nour, The Co-­Create Canvas (St. Martin’s Press, 2017), Chapter Eight.

Figure 7.3  The Co-­Create Canvas

230



Relationship Economics, Co-­Create, and Curve Benders

231

2. Situational Awareness is about what’s happening in their respective markets, ecosystems, competitive landscape, and complementary or adjacent spaces. This step is fueled by gathering ecosystem insights, discerning what’s relevant today, and anticipating what will become a potential enabler of growth or an existential threat. It is critical that a distinction is made between a person (or a system) and the environment. In the aviation industry, think of the person as the pilot and air traffic control they have a relationship with, and the environment as the cockpit, the weather, traffic patterns, airplane, passengers and cargo load, and so on. A wheel hub and the impact of the surroundings on the spokes attached to the hub is another relevant lens to see situational awareness. 3. Strategic Priorities over the next 18–36  months; that’s long enough to impact yet not so far out that we’re future-­ gazing. It is critical that all parties (a) focus—­just because you can, doesn’t mean you should, and (b) share their strategic priorities—­relevant to the co-­creation process transparently. “Given the above landscape we find ourselves in, or want to pursue, here are our top 3-­5-­8 strategic priorities and why,” is a rich conversation between co-­creators. If I know where you’re going and how you plan to get there, I can focus my efforts on how to be of the most significant value, propel, amplify, enhance, or otherwise fail-­ proof your path ahead. 4. Market Gaps have a foot in both the foundation and value proposition phases. The first step in identifying the gaps is focusing on each party’s macro trends. Momentum proofs highlight the frequency, velocity, or data points that highlight a market gap worth pursuing. For example, other than small niche players, few organizations want to be highly successful and scalable, world-­class horse saddle makers when the entire market is buying cars! Early-­stage firms spend a great deal of time, effort, and resources on product-­market fit for this exact reason. If you don’t begin

232

Relationship Economics

with a hypothesis of a market gap, you’ll create a solution looking for a problem. • Phase Two: Value Proposition Design—­ three key steps here including the following issues: 5. Differentiators must be more than superficial and can only come from a solid foundation of the first four steps above. How will the parties create a more than incrementally better, faster, or more efficient solution? We’ve found that incremental progress doesn’t get parties excited about the long-­term viability of co-­creating together. As such, our counsel is always to aim for exponential growth, entry into new market segments, or creation of new growth engines altogether (market makers). Remember that the only market validation that matters here is paying customers—­those who have the problems you’re trying to solve and are willing (and able) to invest in solving them. Ideal if you also tackle “my hair is on fire” challenges with a sense of urgency to address. Needs perceived as nice to address (vs. must) tend to get deprioritized. 6. Resources and Time Frames are all about what each party is willing to commit to by when. Co-­creation without the commitment of resources is a pipe dream. And resources are more than just capital; they also include the commitment of the effort, organizational bandwidth/ capacity, prioritized pursuits, executive buy-­in, and demonstrated commitment (internally and transparently to the market), dedicated headcounts, and keeping intruders and derailers out of the way. Time frames are about anticipating those resources’ needs, applications, and outcomes. We’ll need to have XYZ in place to accomplish these milestones by this time frame. Resources and time frames fuel the relationship to forge ahead, particularly through challenging times, internal or external obstacles, and the barrage of naysayers.



Relationship Economics, Co-­Create, and Curve Benders

233

7. Strategic Relationships is a relationship map of the vital co-­creation stakeholders. You’ll need leads from each party and a series of supporting casts, often with the lifecycle maturity of the co-­creation process. For example, early on, you may need relationships as subject-­ matter experts (SMEs) to get the initiative off the ground, answer technical questions or create a Proof of Value (POVs vs. Proof of Concepts—­POCs). Later in the co-­creation lifecycle, you may need access to financial modeling, forecasting, or revenue operations relationships to measure, report, and analyze essential performance or progress indicators. Our counsel here is always to go in with “Seal Team Six vs. a Battalion.” If you consider co-­ creation strategic, you’ll want fewer of the most elite team members getting the job done vs. an entire army you’ll need to feed and care for endless periods! • Phase Three: Execution—­final three steps in the co-­create process, including the following: 8. Milestones make or break the perceived progress of the co-­creation process. They’re success benchmarks, a dashboard of the relationship ROI, and material gain to prove we’re better off because we’re on this journey together. Early on, you’ll make your best guestimates as there is less clarity on your traction or progress. Your milestones should be updated and communicated regularly, as few executive sponsors appreciate bad news, late! 9. Communication Preferences are all about exceeding expectations. Understand early and often what each party needs communicated, by when (regular, consistent cadence) and their preferred style. For example, some leaders and teams prefer written progress; others simply will want to meet as an entire group for updates. Others need weekly updates on a year-­long effort. If you don’t understand their communication preferences, you’ll create

234

Relationship Economics

a vacuum ripe for misunderstandings and misperceptions on what, if anything, is getting done! 10. Metrics and Compensation are your yardsticks and the definitive ROI on the co-­creation process. How we will define success and measure our progress against it should be discussed at the onset of any co-­ creation process. Compensation or the economic model is also more critical to some leaders and their organizations than others. We’ve found that compensation can mean market share, industry recognition, or social consciousness by some leaders and their organizations. So never assume. Ask, propose, clarify and get both qualitative and quantitative measures identified early and often. Make no mistake about it. The above three phases and 10 steps are just the journey’s beginning. If you noticed in the Co-­Create Canvas, there is version control. Co-­Creation is seldom an event; it’s a process of hypothesizing, anticipating, and reacting based on the available insights, learning, applying, and growing through an often volatile, uncertain, complex, and ambiguous (VUCA) market dynamics. The success of any co-­creation process will heavily depend on the longevity of the strategic relationship investments. Those investments are much easier to make if the co-­creation process produces qualitative and quantitative results, so keep your various stakeholders abreast of your progress with regular updates. Few things get  all the parties excited about the relationship than meeting or exceeding their desired strategic outcomes. To summarize, in Relationship Economics, some of the contacts you meet become relationships through the exchange of value. Over time, a subset of that group become strategic relationships due to their relevance to your growth journey. Here a subset of your strategic relationships elevated their status to co-­creators. You embark on a deep, highly interdependent relationship where you create significant value for two or more parties and the commitment to see your joint efforts realize their most significant potential. A good analogy for co-­creation in our personal lives is our kids. An entire village comes together to have, raise, nurture, and sustain a



Relationship Economics, Co-­Create, and Curve Benders

235

child’s viability and holistic success. We’ll always want the best for them; they don’t stop being your kids when they’re 10 , 20 , 30, or 40 years old. In most cases, it’s challenging to have that child alone. Ideally, two or more parties bring the best attributes of themselves, their resources, and positive/productive ecosystems to the relationship. What if that child was in a business relationship and each party behaved in the long-­term interest, success, and impact that child can have in their chosen field? That child is more than a partnership, an alliance, a press release, or a short-­term fad. Similarly, co-­creation is a long-­term commitment to thinking and leading differently.

Future of Work: Nonlinear Growth This year we’re celebrating the twentieth anniversary of our advisory firm. I’ve been thinking a lot about the work we’ve done in our past, the clients we’ve served, and what the next two decades may bring. The global pandemic also challenged our collective assumptions—­ that productivity was measured by showing up in a physical location to do the actual work, that collaboration or training was predominately an in-­person effort, and that we had to travel to get things done. If you think about it a second, during the global pandemic, we also didn’t spend more time with more people; we spent more time with fewer people. We prioritized family, close personal friends, and professionally, relationships we already had—­people we knew, liked, trusted, and felt a personal connection to beyond any transaction. We left our offices to work, learn, and teach from home. Families with young children made lifestyle adjustments to adapt. We became more empathetic to the kids running into our video backgrounds and pets jumping in on our laps. Entire organizations and industries that were not previously video or remote work cultures quickly adapted—­ because they had to. We shifted our priorities and the never-­ending struggle for work-­ life balance (a fallacy) to work-­life blending. As a long-­time friend and mentor Alan Weiss taught me years ago that we don’t have a work life and a personal life; we have one life. So blending the two and combining early morning Zoom or Teams meetings with colleagues or

236

Relationship Economics

customers in Europe, with mid­day lunches in T-­shirts and shorts with our spouses or kids at home, became the norm and not the exception. We worked from mountain and beach homes, rented RVs, went on road trips, moving to more affordable and quality-­of-­life-­centric small towns, and as long as we could connect, we worked from everywhere (WFX, where X marks the spot!). Four years ago, I embarked on a journey to research different lenses on the future of work. If the global pandemic was any indication of mass disruptions to how we worked, lived, played, and gave to others, what other dynamics could create similar disruptions? Longitudinal research led our team to narrow it down to 15 unique forces (Figure 7.4). From Black Swan events like the global pandemic to geopolitics—­the

Figure 7.4  Fifteen Forces in the Future of Work



Relationship Economics, Co-­Create, and Curve Benders

237

ripple effects of what we’re seeing in global energy and wheat, as well as tech development due to the Russia-Ukraine War, shrinking planet, haves vs. have-­nots, visualization, demographics, diversification, grit, and visionary storytelling to share a few.2 With these personal, organizational, industry, and transitionary forces creating headwind, tailwind, and turbulence in our lives, the single thought running through my mind, as well as in conversations with over 100 global executives, was, How does one remain relevant? To answer that question, I began with a baseline assessment of our personal market value today—­how much are we really worth in our respective roles and within our organizations? And how can we both qualitatively and quantitatively measure it, plan our journey from now to next, and invest in crucial areas of our personal and professional growth (see “Your Personal Market Value,” Figure 7.5). What I discovered was that the fastest path to remaining relevant was to embrace a digital, entrepreneurial, and growth mindset and accelerate one’s personal and professional growth. But how? Much research shows that our traditional, what I call linear, learning journeys, are no longer as effective as once believed. Think about your undergraduate degree—­learn, learn, learn, and maybe at some point in the future, apply a fraction of that learning. I don’t know about you, but it’s been a while since I’ve used differential calculus! I’m not taking anything away from undergrad degrees. I just don’t need one from MIT in computer science if I want to learn to code. Hence the notion of nonlinear growth—­how can we identify an immediate need, learn a potential solution quickly, apply it (including mistakes and course corrections), see the results quickly, and move on to solve the next problem? And one of the strongest accelerants of your personal and professional growth in a nonlinear growth? You guessed it—­certain relationships! But not just any relationships. These are rare individuals who seem to enter and exit our lives in random patterns and, in the process,

 David Nour, Curve Benders (Hoboken, NJ: Wiley, 2021), Chapter Two: “Forces Impacting Your Future.” 2

238

Relationship Economics

Figure 7.5  Your Personal Market Value



Relationship Economics, Co-­Create, and Curve Benders

239

change both the direction of our journey and our ultimate destination. My research identified them as that childhood coach, adolescent-­year teacher, unique undergrad or even grad ­school professor, an early boss in the spring of our careers, a mid-­career mentor or statesman leader, or an executive coach who helped us see the best version of ourselves, even when we couldn’t see it ourselves. They believed in us, poured knowledge and wisdom into us, and nurtured that unique ingredient in us to reach further, aim higher, and take a leap of faith. They mentored and guided us, challenged our assumptions and assertions, helped modify our behaviors, and pushed us beyond our own perceived limitations. Most importantly, when we reach the arc of any role or realm of responsibility, what I refer to as the Refraction Point (Figure 7.6), in our careers, they behave very similarly to light refracted through glass or water (Figure  7.7). They both accelerate our journey through a challenging period in our lives and help us see a different path or potential option forward. I call these incredible relationships in our lives Curve Benders, as they tend to leave an indelible imprint on not just what we accomplish but on the leader and the human being we become in subsequent years.

Figure 7.6  Refraction Point

240

Relationship Economics

Figure 7.7  Light and Curve Benders through Glass

The single biggest question I often get asked when people read Curve Benders or hear me deliver a keynote on the topic is that if Curve Benders are these magical, mystical creatures that can profoundly change our lives, where are they? How are they found, and how can we meet them? As you can imagine and appreciate, they’re few and far between, are busy creating value for relationships they choose to invest in, have little to no patience for mediocrity, and are earned versus handed out. What I did provide in the book are seven steps to meeting potential Curve Benders (Figure 7.8): 1. Personal Foundation—­ Begin with a nonlinear growth mindset—­ digital, entrepreneurial, and collaborative—­ to fuel your curiosity, creativity, and connections. 2. Professional Commitment—­ You must establish a solid foundation for exceeding existing expectations. Mastering your craft is a lifelong pursuit. 3. Catalyst—­A spark can bring an awareness of something missing or something you aspire to gain to improve your condition dramatically. This can also be a less materialistic and more intangible/soft asset.



Relationship Economics, Co-­Create, and Curve Benders

241

Figure 7.8  Seven Steps to Meeting Potential Curve Benders

4. Immersive Inquiry—­If a catalyst whets your appetite, you must next deeply research how to challenge biases and assumptions and fan the spark to explore the possible potential and path forward. 5. Strategic Relationships—­With a flame to pursue, think of your most valuable relationships as fuel to connect the dots. You must nurture existing relationships, create new connections, and gain access to an opportunity with prospective Curve Benders.

242

Relationship Economics

6. Agile Execution—­Revisit the Growth Grid with your clarity of intent, committed bandwidth, and an agile/iterative process. 7. Connection Cadence—­This final step will focus on keeping your strategic relationships updated and consistently recalibrating your direction. In the final chapter of Curve Benders, I provide a road map for your personal and professional growth. Broken down into four distinct time frames with five critical steps in each (Figure  7.9). The most immediate or what I call Act Now is focused on the next one to two years. What should be your short-­term focus, based on the available data and evidence you have today? Prioritize these actions, as they dramatically enhance your current market value in consistent execution, critical thinking, and discerning prudent options. I coach the reader to align their personal and professional aspirations, design an effective information diet, embrace immersive inquiry into the next best version of themselves, invest in their Relationship Bank, and begin to identify a few they want to nurture a long-­term, Curve Bender relationship with. Throughout this journey, if you become more intentional in the relationships where you choose to invest, a theme I hope you’ve read throughout this book, you’ll discover that they can become an accelerant in every positive, constructive, and growth-­oriented aspect of your work and life: • In Relationship Economics, I shared how some contacts you meet can become relationships through the exchange of value. A subset of that group, over time, can become strategic relationships due to their relevance to your growth journey ahead. • In Co-­Create, I shared how a subset of your strategic relationships elevate their status to co-­creators. You embark on a deep, highly interdependent relationship creating significant value for two or more parties and the commitment to see your joint efforts realize its most significant potential.



Relationship Economics, Co-­Create, and Curve Benders

Figure 7.9  Act Now Key Steps in the Next One to Two Years

243

244

Relationship Economics

• In Curve Benders, I shared how a few relationships in our lives can profoundly impact our nonlinear growth to remain relevant, particularly in times of disruption. They shape not just what we can accomplish but also the leader we can become. In essence, they alter our direction and ultimate destination to help us become the best version of ourselves.

What’s Next? So where do we go from here? What facets of business relationships am I thinking about, researching, and am particularly curious about now? After two decades of being a student of business relationships, I’ve completely fallen in love with the ever-­changing nature of business relationships. I’m constantly looking at this nebulous yet critical aspect of our personal and professional lives as something we all realize is important and yet continue to miss its significance. Here are just a few areas in which I continue to research, interview executives, and keep wondering: • Inner Circle—­These are the people who are the closest to us. Entertainers, athletes, politicians, and most CEOs all have them. So how do you get in, what are the rules of engagement once you’re in, and how do you create one as your board of directors? • Pretirement—­The global pandemic changed our perceptions about work—­how we define it, measure it, value it, contribute to it, and integrate it into the rest of our lives. In recent years, I’ve met several executives who aren’t quite ready to retire yet, as they still have much to give to their chosen fields. But they also don’t want to stay on their current path. Welcome to the preretirement phase of your career and life. • Accelerating Relevance—­I wrote about this idea in Chapter Three of Curve Benders. As I think about a great deal of disruption in the future of work and how we all remain relevant, I believe it will continue to be of great importance.



Relationship Economics, Co-­Create, and Curve Benders

245

• Agile Alignment—­Another Covid moment: how do you keep a remote team focused on a set of outputs + outcomes + impact? How can we culturally shift to say more with less, visually? Agile Alignment may be the recipe book! • The Immigrant Success DNA—­The more first-­generation immigrants I meet, the more unique DNA I uncover: incredible value in education, strong work ethics, give and save before you spend, enrich the lives of others at every opportunity, law-­abiding, God fearing, double down on family values. No wonder first-­generation immigrants are four times more likely to become millionaires in the United States than those born here. • Visionary Stewardship—­ I’m passionate about a fantastic board of directors. The ones engaged are partners of the CEO and the management team, with a relentless focus on the evolution of the business. Regrettably, they seem to be far and few between. Most focus on risk mitigation rather than real and lasting innovation that will keep the business relevant. Meet the next generation of board members driving incredible value creation as stewards of the companies they govern. We’ll see if these ideas become a blog post, a position paper, or one of the next books. I would love your input—­join us in the Nour Forum (NourGroup.com/Forum) and share your thoughts. Thank you for reading this book and for your continued interest in my work. Nour

246

Relationship Economics

Chapter Seven Summary • Building and nurturing business relationships should be a life-­ long endeavor beginning with the exchange of Relationship Currency, to building Reputation Capital, and ultimately accumulating a Professional Net Worth. • Certain relationships elevate their value exchange to become strategic relationships. Some of those relationships become Co-­Creators in new products, services, or market opportunities. • In the future of work, 15 forces will disrupt how we live, work, play, and give to others. These forces will become a tailwind, headwind, or turbulence in our life. • Your ability to remain relevant will strongly depend on your future success. One of the most efficient ways to do that is to accelerate your learning and growth. The biggest asset in your effort to grow and remain relevant is a few profound business relationships I refer to as Curve Benders. • Your Personal Market Value—­ how much you’re worth in the market—­depends on critical skills, knowledge, and behaviors outlined as Foundational Rings, Value Accelerants, and Growth Enablers.

About the Author A senior leadership/board advisor, educator, executive coach, and best­ selling author, David Nour is inter­ nationally recognized as the leading expert on the applications of stra­ tegic relationships in profitable growth, sustained innovation, and lasting change. Nour is the author of 12 books translated into eight languages thus far, including best­ sellers Relationship Economics®—­ now in its third edition (Wiley)— ­Co-­Create (St. Martin’s Press), and Curve Benders (Wiley). Nour is a trusted advisor to global CEOs, and he coaches leadership teams and rising entrepre­ neurs. He is CEO of The Nour Group, Inc., an Atlanta-­based advisory firm focused on removing friction and accelerating revenue growth. Recent client engagements span leading global companies, including Becton-­ Dickinson, Beyond Identity, BreachQuest, Metal Service Center Institute, Query.AI, Refratechnik, Schneider Electric, Security Scorecard, Werfen, and Westat. In addition to advisory and executive coaching, Nour delivers an estimated 50 customized keynotes annually for global brands, associa­ tion conferences, and academic forums on strategic business relation­ ships. Tailoring content for audiences from boardrooms to ballrooms globally, delivered in person or virtually, he shares unique insights and an independent perspective. His sessions are peppered with interactive moments and real-­world takeaways to inspire audiences to think and behave differently in the face of continued disruptions.

247

Untitled-2 247

28-12-2022 04:25:08

248

About the Author

Nour is an adjunct professor at the Goizueta Business School at Emory University and is an alumnus of the Leadership Atlanta Class of  2022, Thinkers50 Radar Class of 2021, and Global Gurus Top 30 Leadership Professionals lists. In addition, he is a member of the FBI Citizens Academy, the Association for Corporate Growth, and the National Association of Corporate Directors (NACD), where he has earned the Governance Fellow accreditation. A Forbes leadership contributor on the future of work and an Inc. contributor on relationship economics, Nour’s unique insights have been featured in a variety of prominent publications, including the Harvard Business Review, the Wall Street Journal, the New York Times, Fast Company, Huffington Post Business, Entrepreneur, and Knowledge@ Wharton. He’s also the host of the popular Curve Benders podcast. Born to middle-­ class educators in Iran, Nour arrived in the United States in 1981 with a suitcase, $100, and no English fluency. He lived with an aunt and uncle in the Atlanta suburbs, where he fin­ ished high school and became an Eagle Scout. He graduated from Georgia State University with a bachelor’s degree in business manage­ ment and went on to earn an Executive MBA from the Goizueta Business School at Emory University. He resides in Atlanta, Georgia, with his family. Learn more at www.NourGroup.com.

Other Books by David Nour

A

prolific writer, Nour has spent the past two decades researching, advising, and coaching leaders—­in essence, becoming a student of  business relationships—­how individuals, teams, and organizations deliver unprecedented growth through a unique return on their strategic relationships. Think of his books, Relationship Economics, Co-­Create, and Curve Benders, as his “Star Wars trilogy”: • In Relationship Economics, Nour shares the idea of intentional, strategic, and quantifiable business relationships accelerating business outcomes. • In Co-­Create, he provides a canvas for applying strategic business relationships in iteration, innovation, and disruption opportunities. • In Curve Benders, he focuses on a road map of how strategic relationships can dramatically alter our nonlinear growth trajectory against the forces that will shape the future of how we’ll work, live, play, and serve others. Following are just some of his books available from NourGroup. com/store.

Curve Benders (Wiley, 2021) Our research points to 15 forces that will dramatically impact the future of how we’ll work, live, play, and give. From Relationship Strategy to Grit, Visualization, Technology, Economy, Geopolitics, and Black Swan Events, these forces will create headwind, tailwind, or turbulence in our personal and professional paths forward. To remain relevant, every professional must move 249

250

Other Books by David Nour

faster and immediately apply that learning to tackle critical challenges and opportunities. That’s where your Curve Benders become an unparalleled asset. In this insightful yet practical book, discover your Personal Market Value, explore Growth Grids, exploit your Personal S-­Curves in search of Refraction Points, and create a Road map to Your Curve Benders. Packed with pragmatic advice, tools, and links to  resources, Curve Benders is your guide in the journey from now to next.

Co-­Create (St. Martin’s Press, 2017) In our dynamic world, no one has all the answers. What if two or more of your most valuable and strategic relationships came together to create something far beyond what anyone thought imaginable? With a long-­ term vested interest in its success, could this initiative, campaign, product, service, or unique outcome deliver profitable, net–new growth opportunities? More importantly, could it transform the relationship to something more profound, meaningful, and dramatically more impactful, often impen­etrable by competitors? In Co-­Create, Nour makes more than a compelling case to innovate through your strategic relationships; he provides a proven road map to do so.

Return on Impact (Jossey-­Bass, 2013) Access to information is instantaneous. Social tools put professional networks within arm’s reach. So what leadership strategies will allow your organization to create and support differentiating value and nurture ongoing relationships with your members? In Return on Impact: Leadership Strategies for the Age of Connected Relationships, Nour charts the implications of a socially enabled world and the reinvention—­in structure and governance, talent acquisition, listening practices, and business and revenue models—­ that leaders of organizations must undertake to fuel growth in the next decade.



Other Books by David Nour

251

ConnectAbility (McGraw-­Hill, 2010) Drawing from the powerful lessons of emotional awareness and relationship dynamics, this book promotes a sophisticated yet simple method for developing superior partnerships, guaranteed to create quality results consistently. Unfortunately, even the best-­ intentioned team players too often focus more on communicating their ideas than hearing and understanding what others have to say. ConnectAbility changes all this, using eight steps to foster optimum communications.

The Entrepreneur’s Guide to Raising Capital (Praeger, 2009) Written to help entrepreneurs navigate the capital-­ raising maze, this book shows how to attract financing to fund the startup and growth phases any business moves through. Nour provides real-­ life, pragmatic advice from entrepreneurs who have successfully raised capital from friends, family, angel investors, banks, and institutional investors such as venture capital and private equity firms.

Index 2 AM relationships, 86, 88, 104, 107, 110 A Academic competency, 157 Actionable/real-­time data insights, usage, 57 Action items, commitment (avoidance), 222 Act Now steps, 243f Adoption, 197, 200 Agile alignment, 56f, 245 Agile execution, 242 AI Annotator, usage, 201 Albrecht, Karl, 134 Alliances, formation, 57–58 Amazon, net sales/income growth, 76f Ambient Aware, 98 Ammunition, arming, 28f, 41–43 Analytics, types, 203 Anticipated relationships, 118f Antifragile organizations, strengthening, 70 Applied clinical analysis, usage, 205 Artificial Intelligence (AI), 187, 199 algorithms, 203, 207 At-­home/at-­office workforces, equity (corporate adjustment), 69–70 Augmented reality (AR), usage, 208, 210 Awareness, 195–196, 199 situational awareness, 231 B Bell, Peter, 111 Bhalla, Ajay, 202 Bit Tech, market dominance leverage, 143–144 Black Swan events, 236–237 Botler.ai, NLP (usage), 191 Bots, usage, 197 Bradley, Chris, 124 Brand familiarity, 159, 160f Brand insistence, creation, 160f Brennan, Stephen, 192 Business model innovation, acceleration, 55–57 Business relationships, 51, 188–193, 214–224 assumptions, challenge, 106

attributes, 2, 14 Before-­During-­After phases, 216–223 changes, 12–13 future, 207–211 identification/nurturance/sustaining, 80 impact, 94 intentionality, 216 investment, 23–24 leverage, 20 myths/misperceptions, 3–8 pre-­pandemic/post-­pandemic lessons, application, 125f valuation, 9, 11 Bystanders (disillusioned archetypes), 82 C California Consumer Privacy Act, compliance, 202 Candor/authenticity, display, 90 Capitalizing (strategic relationship phase), 81, 81f, 109–113 Carney, Jeff, 112 Casale, Jeff, 111 Catalyst, impact, 240 Centers of Influence (COIs), usage, 64, 64f CEO Creativity Survey, 227f Churchill, Winston, 98 Clari, sales forecasting tools, 196–197 Coase, Ronald, 17 Coasting, culture, 122 Cobots, usage, 192–193 Co-­Create (Co-­Creation), 242 canvas, 230f defining, 226–227 initiation, 228–229 usage, 95 Co-­Create (Nour), 193, 213, 226 Collaboration corporate adjustment, 69 models, types, 225–226 Collaborative data sharing, usage, 205 Colleague-­centric relationships, 64

253

254

Index

Commitments (strengthening), strategic relationships (usage), 167 Communication corporate adjustment, 69 preferences, 233–234 shift, 128–129 Compensation, importance, 234 Complacency, impact, 174 Conflict, relational asset, 180 Connection cadence, 242 Contact, conversion, 220 Continuous improvement cycles, usage, 133 Conversational commerce, 193–202 Conversations harvesting, 36 increase, 128–129 Core competencies, focus, 4–5 Corporate culture, ratings (change), 68–69 Corporate relationship deficit disorder, 48–49 Corporate strategy, strategic relationships (integration), 55 Courage, commitment, construct (3Cs), requirement, 142 COVID-­19 impact, 8, 54, 69 screenings, administration, 201 Coworkers, characteristics, 5 Created relationships, 118f Cross-­functional departments, capitalizing (display), 110 Curve Benders impact, 5, 239, 240f meeting, 240–242, 241f Curve Benders (Nour), 8, 169, 174, 213, 244 Customer-­centric relationships, 63 capitalizing, demonstration, 110 Customer experience (CX) intersection, 193 journey, 194f Customer Lifecycle Journey Maturity Model, 194, 195f Customers behaviors/need changes, digital experiences/products/services (responses), 70–71 identification, 149–150 lifecycle maturity, 193–202 relationships lifetime value (LTV) analysis, 195–196 negative consequences, 84 service, improvement, 149 success leaders, real-­time text prompts, 200

D Danziger, Eric, 191–192 Decision making filter, absence, 174 shift, 130 Delen, Dursun, 204 Deployment On-­ramp, 198 Descriptive analytics, 203 Design thinking, 130–134, 131f Diagnostic analytics, 203 Differentiated culture, organizational struggle, 80 Differentiated strength/focus, location, 150–151 Differentiators, usage, 232 Digital on-­ramp, usage, 195 Digital presence, amplification, 9 Dig Your Well before You’re Thirsty (Mackay), 35 Disillusioned archetypes, 82–83 Diversified/purpose-­driven relationship strategy, 87–90 Drucker, Peter, 30 Due diligence, 21, 34, 98, 216 process, 132–133 relational due diligence, 43 relationship hypothesis, connection, 218 Dunbar, Robin, 37–38 Dynamic market ecosystems, 224–225 E EarthLink, Cresta usage, 201 Ecosystem (Reputation Capital law), 165 Egan, Dick, 111 Emotions, filter (absence), 174 Employer-­specific competency, 157–158 Engagement, 196, 199 display, 90 Engagement/influence, 17 Enterprise resource planning (ERP) systems/ budgets/forecasts, usage, 135 Established relationships, strategic relationships (contrast), 113–114 Evaluation, 196, 199 Evangelize, 198, 200 Executive sponsors impact, 228 relationship requirement, 146 Existing relationships, 118f Exponential relational growth, 59–62 Extended reality (XR), usage, 210



Index

F Facial recognition AI integration, 190 usage, 202 Fake reviews (company credibility), 198 Familiarity, knowledge, 159 Family culture, presence, 6 Favor economy, survival, 16, 36 Feedback loop, mechanism, 96 shift, 130 Feedforward, 180–181 shift, 130 Financially astute relationships, 65–66 Focus importance, 7 location, 150–151 Follow through, follow up (contrast), 221 Follow-­through phase. See Networking Force Multiplier, 151 Four, The (Galloway), 142 Frequently discussed, Ambitious in scope, Specific metrics/milestones, Transparency (FAST), 30 definitions/benefits, 31f goals, 31f, 152 Functional relationships, 18–19, 18f Fuzzy goals, 28f, 29–30 G Galloway, Scott, 142 Gift of time (Relationship Currency type), 91 Givers/takers/investors, impact, 28f, 47–48 Global economy, shutdown, 9 Global perspective, investment, 11 Goldsmith, Marshall, 11 Gong, ML/NLP leverage, 199–200 Gratitude (Relationship Currency law), 162 Great Resignation (Great Reconsideration), 68 Growth, 174 attributes, 23–24, 53 relationships, 51 H Hamel, Gary, 30 Hanifan, L.J., 22 Haphazard/reactive efforts, 28f, 32–36 Hart, Cees’t, 127 Have-­to event, 33 Hayek, Friedrich, 17

255

Hertz, Doug, 42–43, 45 High-­performing teams, relationship-­centric blueprint, 70–77, 72f Hirt, Martin, 124 Human Capital Trends Report (Deloitte), 190 Hybrid relationships, 1 I Iconic Moves, portfolio (creation), 74–75 Idealists (disillusioned archetypes), 83 Ideal relationship profile (IRP), absence, 28f, 43–45 Immersive inquiry, 241 Immigrant success DNA, 245 Impact (value), 197, 200 Individual aspirations, setting, 73–74 Individual competencies, 177–179 Industry-­sector technical competence, 157 Industry-­wide technical competence, 157 Influence, authority (absence), 139–140, 140f Influential hubs, identification, 39 Influential relationships, access (Relationship Currency type), 92 Inner Circle, 104, 244 Innovation organizational struggle, 80 requirement, 142 visual storytelling, usage, 141–144 Inorganic relationships, 66 In-­person businesses, changes, 12–13 Insistence, impact, 159 Interaction phase. See Networking Internal relationships, SRP focus, 127 Internet of Things (IoT), usage, 208 Intracompany relationships, 127–130 Intra-­company relationships, negative consequences, 83 Investment relationships, 85, 88, 104, 107 Isolated exceptionalism, organizational struggle, 79 J Joint outcomes/results/status, 152 Joint ventures (collaboration model), 225 Jones, Dale, 1 K Kasanoff, Bruce, 217 Key performance indicators (KPIs), 57, 79, 122 Kim, Jim, 11

256 Knowledge breadth, 89 special knowledge (Relationship Currency type), 92 transfer/brain drain, organizational struggle, 80 L Lagging/leading indicators, basis, 121 Laughlin, Kyle, 206 Leadership, shift, 129 Leaders, person description, 160–161 Learning, indifference, 174 Lifetime value (LTV) analysis, 195–196 Linear learning journeys, 237 LinkSquares, machine learning (usage), 202 LivePerson, customer service platform, 201 Locascio, Rob, 201 Location, corporate adjustment, 70 Logarithmic relational growth, 58–59 Loyalty, attribution, 159 M Machine learning (ML), 188–193 algorithms, 203 leverage, 199 usage, 202 Mackay, Harvey, 35 Management competency, 157–158 Mapping (strategic relationship phase), 81, 81f, 96–98, 109 Market gaps, 231–232 opportunities, identification, 149–150 relevance, organizational struggle, 80 validation, 62 McKay, Peter, 111 Mental health, corporate adjustment, 69 Mergers & acquisitions (collaboration model), 225–226 Messages, usage, 169 Metrics, importance/usage, 148, 234 Milestones, 233 Mindset shift, 127–128 Mixed reality (MR), usage, 210 Moore’s Law, 61 Mullaly, Alan, 11 N Natural interactions, 208–209 Natural language processing (NLP), 207

Index leverage, 199 usage, 191–192, 197 Negotiations, usage, 140–141 Net Promoter Score (NPS), usage, 79, 122, 168 Network actors, structure-­based roles, 25 Networkers (disillusioned archetypes), 82 Networking, 1, 4, 21 ease, myth, 3 follow-­through phase, 27, 41–48 interaction phase, 27, 32–41 preparation phase, 27–32 problems, reasons, 26, 28f stages, 27 Nonlinear design thinking approach, 131f Nonlinear growth, 235–244 Nurturing (strategic relationship phase), 81, 81f, 100–102 Nyberg, Anthony, 71 O Objectives and Key Results (OKRs), 5, 79, 122 Objectives, resources (alignment), 54–55 Object of interest, 89–90 presentation, 98–99 Occupation-­specific competency, 158 ONE organizational relationship, 65 Organization courage, commitment, construct (3Cs), requirement, 142 future-­proofing, 73–75 machine learning/business relationships, 188–193 Organizational aspirations, setting, 73–74 Organizational growth, 53–62 relationship strategies, 63–67 Organizational Reputation Capitals, contribution, 171 Our Why conversations, 147 Outcome-­driven relationship frameworks, 94–95 Output/outcome/impact, 221–222 P Parrinello, Mark, 67–68 Partner relationships, negative consequences, 84 Partnership/alliance (collaboration model), 225 Partnerships, formation, 71 Past material, impact, 229

Paying It Forward (Relationship Currency law), 162–163 Peer discipline, 181 People person, avoidance, 6 Personal action plans, usage, 119 Personal effectiveness, 156 Personal foundation, impact, 240 Personal market value, 238f Personal/professional growth, relationships (impact), 52 Personal relationships, 18–19, 18f Personal tech stack, sample, 10f Perspective/conviction, display, 90 Pilot initiatives, usage, 132 Pivotal Contact, usage, 101–102, 102f, 119 Planning, importance, 118 Point of view, display, 90 Portfolio relationships, 85–86, 88, 104, 107 Post-­pandemic economy, organizational growth, 53–63 Predictive analytics, 202–207 Predictive Analytics (Delen), 204 Predictive success, 209 Preparation phase. See Networking Preretirement, 244 Prescriptive analytics, 203 Presentations, reduction, 128–129 Proactive talent management, 138–139, 139f Problem/solution, path (accelerated), 138f Problem solving shift, 129 usage, 138 Product Age, acceleration, 143–144 Product development acceleration, 71 goals, 206 Product On-­ramp, 198 Product/service innovation, acceleration, 55–57 Professional commitment, 240 Professional maturity, absence, 173 Professional Net Worth, 2, 152, 155 assets, 184 building, 17, 175f development/sustaining, 184 endgame, 171 practices, 182–184 Professional, polished, persistence (etiquette), 217 Professional relationships, long-­term viability, 175–177 Profit and loss (P&L) viability, systems thinking (usage), 135–141, 137f

Index

257

Proof-­of-­Concept (POC), 196, 233 Proof of Value (POV), 233 Prototyping, strategic relationships (equivalence), 133 Purchase, 196–197, 200 Purpose, absence, 28–29, 28f Purpose, goals, and plan (PGP), 32 Q Quality, quantity (relationship), 87 Questions asking/quality, 99 credibility, conveyance, 219 R Reach/rapport, 169 Real-­time analytics, 203 Real-­world augmentation, usage, 210 Reciprocal value, request (avoidance), 103 Reciprocation, 222–223 importance, 98–99 Reciprocity (Relationship Currency law), 162 Referral, recommendation (equivalence), 218 Refraction Point, 239, 239f Regency Effect, 219 Relating (strategic relationship phase), 81, 81f, 98–100 Relational growth, types, 58–62 Relational Onramps, 43–45 Relationship bowtie, 107, 108f Relationship-­centric culture, resilience, 73–75 Relationship-­centric goals, 94f, 97, 119 Relationship-­centric growth drivers, 63–67 Relationship-­centric high-­performing teams, 177, 185f Relationship-­centric mindset, usage, 85 Relationship-­centric organization, 182–185 Relationship Currency defining/types, 91–92 exchange, 17, 93, 103, 119, 162f, 164 freshness dates, 161–163 investments, 106 laws, 162–163 short-­term exchange, 155 value creation, enabler (impact), 172 increase, 93 Relationship Currency Deposits, 36, 89, 91–95, 91f creation/production, 92–93, 98, 100–101 stakes, increase, 104 value, 102

258 Relationship Economics, 161–162, 234, 242 characteristics, 16, 26 Relationship Economics (Nour), 213 Relationship intelligence, 202–207 Relationships automation, myth, 5 avoidance, 6 bank, 119 capitalization, weakness, 109 centricity, 5 creation, 109, 213–214 creation/relationship capitalization (connection), 23 development plan, absence, 28f, 30–32 differentiation, 126 diversified/purpose-­driven relationship strategy, 87–90 economic value, quantification, 23 engagement process, 146–147 exponential growth, 60f insight validation, absence, 28f, 46–48 insistence, 156–161 interaction norms, elevation, 167 investments, 126 investor/bank, balance/development, 48 investor, impact, 89 liabilities, 172–174 linear growth, 59f mindset shift, 127–128 misunderstanding/ underdevelopment, 81–83 organizational management/guidance/ tapping, absence (reasons), 83–85 pace, uniqueness, 99–100 productivity, 126 quarterback/captain, impact, 146 resources, 126 soft skill, myth, 3 status, 148 strategies, 63–67 function, 119 types, 126–127 takers/givers, 103 types, 18, 18f, 85–87, 104, 107, 118f Relationship shoelace, 107, 108f Relationship Value Pyramid, 85–87, 86f, 103–104 2 AM relationships, capitalizing (reservation), 110 movement, 104–106 Relevance, 237 acceleration, 244 Reputation Capital, 100, 152, 155

Index accumulation, 17, 164, 165f, 172 challenges/opportunities, forecasting, 170 considerations, 168f contribution, 171f derivation, 166 evolution, 167 hit types/consequences, 170f laws, 164–165 market value, 163–171 price/benefit, 105 reality gap, determination, 166–167 risk management, 166–167 Requesting (strategic relationship phase), 81, 81f, 103–105 Resources/timeframes, importance, 232 Revenue performance, organizational struggle, 79 Risk assessments, streamlining, 202 Risk management, 166–167 supply-­chain/operating-­model adjustments, 71 Risk mature relationships, 66 Robotic Process Automation (RPA), usage, 189 Robots, evolution, 192 Rumelt, Richard, 120 S Sales-­model changes, 71 Scenarios, range (setting), 74 Seekers/solvers, connection, 11 Segmented ecosystems, usage, 210 Seidl, Randy, 68, 111–112 Self-­awareness/self-­mastery, absence, 174–175 Selflessness, display, 90 Selling, general, and administrative (SG&A) activity, 126, 135 Sentiment analysis, 168 Setbacks, lessons, 52 Shea, Mary, 13 Silver Tsunami, 123 Situational awareness, 231 Situation relationships, 85, 104, 107 Slack (dominance), 191 Smart, Bradford D., 68 Smit, Sven, 124 Social capital, impact, 22–26 Social Exchange Theory, 214–215, 215f Social Intelligence (Albrecht), 134 Social network analysis (SNA), usage, 24–26 Social penetration theory (SPT), usage, 37 Stakeholders, impact, 146–147 Strategic direction, dynamic adaptation, 75

Strategic enterprise relationships, impact, 188f Strategic focus design thinking, usage, 131–134 problems, 121–122 Strategic outcomes, tracking problems, 122–123 Strategic planning, flaws, 120–124 Strategic plans disconnection, 121 outcomes/metrics/milestones, absence, 122 relationships, socialization (absence), 123 Strategic priority, 102, 231 Strategic Relationship Plan Blueprint, usage, 140, 144–152, 145f Strategic Relationship Planning (SRP), 95, 102, 117, 120f focus, 127 follow-­through, 141f process, 97, 124–130 steps, 119 Strategic relationships, 18–20, 18f, 241 artificial intelligence (AI), role, 187 building, phases (usage), 96 cultures, 76–77 development plan, absence, 28f, 30–32 established relationships, contrast, 113–114 impact, 54 integration, 55 map, 233 mergers/acquisitions/divestitures, 127 phases, 79, 81, 81f, 95, 96 plan (execution), systems thinking tools (importance), 136 reasons, 147–148 triangulation, 45–47, 45f usage, 167 Strategic thinkers, mindset shift, 127–128, 128f Strategies, actions (disconnection), 122 Strategists, impact/role, 228 Strategy Beyond the Hockey Stick (Bradley/ Hirt/Smit), 124 Subject-­matter experts (SMEs), relationships, 233 Success defining, 52 mapping, 51f measurement, 147–148 Sull, Donald/Charles, 30

Index

259

Sustaining (strategic relationship phase), 81, 81f, 105–109 Systems thinking, 130 tools, importance, 136 usage, 135–141, 137f T Tactical execution owner, impact, 229 Taleb, Nassim, 70 Talent proactive talent management, 138–139, 139f relationship-­centricity, 67–70 silos, organizational struggle, 79 unique talent (Relationship Currency type), 91–92 Team aspirations, setting, 73–74 dynamics, 179–181 relationship-­centric attributes, 182 Technical competence, preference, 156–161, 156f Technical skills, preference (building), 161 Technology-­enabled relationships, 64–65 Three-­touch rule, usage, 37–38, 222–223 Tipping Point, The (Horchow), 39 Topgrading (Smart), 68 Toyota Motor North America (TMNA), Invisible AI (partnership), 191–192 Transactional doers, mindset shift, 127–128, 128f Transactional fraud (company credibility), 198 Transformation, organizational struggle, 80 Triangulation, 45–47 Trust automation, 211 centering, 181 equation, 220–221 Reputation Capital law, 164 Trustworthiness/value, establishment, 100–101 U User experience (UI), intersection, 193 V Value comparison, Reputation Capital law, 165 creation impact, 172 uniqueness, 224–235 proposition design, 232–233

260 Value-­based interactions, usage, 105 Vibration, forward motion (contrast), 88 Virtual reality (VR), usage, 208, 210 Visionary stewardship, 245 Visual storytelling, 130 usage, 141–144 Voice, share, 168–169 Volatile, uncertain, complex, and ambiguous (VUCA) market dynamics, 234 W What’s in It for Them? (WIIFT), 28f, 36–38, 88–89, 92 Wilson, Lin, 130 Wise, Melonee, 58 Women, networking success, 4

Index Work arena, physical proximity scores (McKinsey & Co), 15f future, 207–211, 235–244, 236f Working from Anywhere (WFX), impact, 55–56, 236 Working from home (WFH), 128 Work-­life blending, 235–236 Workplace changes, internal cultures (adjustments), 69 competency, 157 Wrong people, engagement, 28f, 38–41 Y Young, Paul, 1

WILEY END USER LICENSE AGREEMENT Go to www.wiley.com/go/eula to access Wiley’s ebook EULA.