Understanding Relationship Capital Better for Your Business

I define relationship capital as “the relational reserve of credibility (Intangible Asset) measured by completed commitments that allow leaders, employees, peers, clients, vendors and regulators to talk about anything.” A “Reserve” must be built up over time so it is there when needed.  “Credibility” captures the richness, complexity, and influence that is required to create an open dialogue and that sets the stage for success. Neither RC or credibility are singular quick fixes, just additional tools that can be used to improve relationships that affect your business in a tangible way.

My definition of credibility: the quality of being believable or worthy of trust, a valued intangible asset arising from the interaction reputation of a business and its relations with its leaders, employees, customers, and vendors, distinct from the value of its stock and other tangible assets.

Credibility also encompasses trust, loyalty, positive beliefs, benefit of the doubt, honesty, transparency, safety, grace, forgiveness, a commitment to communicate, motivation, inspiration, and much more. I believe each of these individual components must be a focus of relationship building within any company or business relationship.

Hope is not a great business improvement method.

My passion is to help companies conduct conversations and develop relationship skills that allow them to plan their growth and success while engaging in healthier, more intimate participant relationships as a result of the process.

Wow! Exciting, right? The goal is to bank your relationship capital assets that can improve your company’s reputation and potential. You can actually use the process to create a stronger organization and build positive relationships internally and externally. It is really possible to proactively evaluate completed commitments as a measure of providing tangible value and measure credibility.

If you want to strengthen your company, you can’t just “hope” it will happen. In fact, the natural tendency in many companies is to avoid communicating about relationships and utilization of intangible assets. It is also normal for senior leaders to do their planning behind a cloak of secrecy and relationship isolation.

So, is there a way to defy this rather internally centered tendency? I believe there is, if you follow the four keys outlined below:

Key No. 1: “Empower” Open discussion and planning.

When company issues & decisions become supercharged, hidden, or fear based, they can go unaddressed, and thus create emotional distance, resentment, and a lack of individual leadership and employee engagement.

That is why it’s so important to empower the discussion of issues, expectations & decisions by talking early, openly and often, using soft-skills. Listening more than talking. This can be done by holding discussions within your company, about investing in people and relationships, having proper work ethics, providing support for company family members in the future, or helping others in need. Authentic discussions build relationship capital. You can also reinforce the logic and discipline necessary to track mutually beneficial completed commitments.

 Key No. 2: Ensure the right people are talking about the right things at the right time in the right way.

Many times, conflict occurs when the wrong people are talking about the wrong things at the wrong time in the wrong way—including, the times no one is talking about anything.

A better approach is to empower your leaders and employees:

First, let everyone know that they have a role in the discussion and planning process.

Second, define the different roles people have, determine what the content of the different conversations should be, decide when and how different people will be involved, and declare what effective company communication looks like.

Third, encourage listening and proactive participation.  Avoid letting people give excuses, encourage clear, concise and effective communication. Engage them in supporting each other in the process of tracking and recording completion of commitments internally and externally as a way of demonstrating credibility and trust.

 Key No. 3: Apply the “voice not vote” rule.

Many times, when we suggest that all leaders and employees have a role in the planning process, it can create fear in older tenure employees, who think we are saying that everyone gets an equal vote.

In reality, I believe few companies are a totally open democracy. I do think decision control should be defined by the person who owns and is responsible for the assets.

However, I believe that the more impact a decision has on an employee or team, the more voice you should give him, her or them. For example, as a parent, you may recognize that when you give a voice to children, it builds self-respect, teaches them how to ask questions and express opinions, and gives them a sense of destiny and influence over their future. A similar effect can be applied to employees.

Too many times leaders will make decisions based on assumptions, which may or may not be true for a person or group of people. This can lead to a breakdown of internal and external relationship capital leading to a reduction in value.

In the end, the company’s planning must be realigned by appropriate discussion and listening to accommodate the voices of its stakeholders which will result in a unified vision. Recording the collaborative agreements, expectations and completions that are made would allow for people’s voices to be heard and acknowledged.

Key No. 4: Build on a dream, not fear.

I always like to think about the incredible tension between “dreams” and “fears” when it comes to employee nurturing. Many people have strong inner dreams around relationships, expectations, lifetime goals, and the company legacy but they are often distracted by fears or coercion.

Coercion is often brought by leaders through the practice of persuading someone to do something by using force or threats.  Fears, on the other hand, are generally internal to the person. Evidence is that you get more risk-taking, innovation, and high relationship capital from inspiration or “dreams”.

Great leaders, for example, have a dream that their managers, employees, and clients would be independent, accountable and agile, but their “fears” keep them from empowering people to spread their wings and make their own decisions. They are afraid they might fail.

We want them to have a strong voice in the organization, but our fear of losing control keeps us from giving them a voice with us. We wish all stakeholders could have financial security from our efforts, but our fear is that they may become spoiled and entitled and that keeps us from engaging them in conversations around planning for the future.

In order to build relationship capital, leaders must embrace the dream over the fear. And in my experience, the dream is always under the surface whereas the fears, expressed or hidden, are front and center. Part of every dream should be making everyone comfortable in discussing and agreeing to commitments that are mutually beneficial and profitable for the company.

Often, when I am talking with leaders and I hear their fears coming through, I stop the conversation and ask, “Where’s the dream?” Many times, with some coaching, they can re-engage the dream and discuss the behaviors that are associated with the dream versus the fear.

 Relationship capital is an outcome.

I believe that by following the keys above you can help build a reserve of credibility within the company and individually, i.e., relationship capital. In my mind, the ultimate goal of developing such a credible portfolio of relationship capital is to ensure the organization can effectively talk about anything with all stakeholders!

This might sound idealistic, but when relationship capital is in play, communication capabilities are much more vibrant and extensive, allowing the “anything” to include the full range of planning, processes, roles, topics and strategies, unfettered by constrained human dynamics.

The culture and DNA of the organization are much more open and constructive. Negative and caustic discussions are dealt with and solutions discovered before they become destructive.

When you bring relationship capital to the table in your company, I believe you increase the opportunity to leave a legacy of sustainable growth, visionary service and high employee engagement.

Would love to talk about how you can introduce this in your company; check out my website at Transformative Leadership Group or call me at 630-454-4821.