Why Relationships Matter As Much As Products And Services

Sallie Sherman is a woman who acts like the world has finally woken up to something that has been obvious to her for years. Back in the 1980s, when she started the Ohio-based firm S4 Consulting, business largely had the attitude of "build it and they will come", she explains. "They were trying to grow and stumbling. They couldn't work out what was going on."

There was a lot of emphasis on products and services, in keeping with the times and the focus on the quality movement. But, as Sherman adds, people were "beginning to see that you could have a good product and a pretty good service and still lose big customers". The missing piece was relationships. In particular, broken relationships. Companies felt those they were doing business with were unreliable, or untrustworthy or where treating them badly. By the mid-1990s, says Sherman she and her colleagues had done enough research to be able to say with confidence that the relationships enjoyed by good businesses with their customers were "assets as valuable as boilers or trucks".

From this, she became intrigued by the skills exhibited by leaders whom she deemed particularly effective in this area. With collaboration and teamwork a critical part of how businesses operate today, building relationships - both within and beyond their organizations - and effective leadership go hand-in-hand, she adds. “Your ability as a leader to create and develop powerful relationships is fundamental to success,” she says. “The leader’s world is about creating a direction and context for action, and leaders  need to develop special relationships that include high levels of trust and commitment.”

• Staying true to yourself. Sometimes leaders promoted to a higher executive position struggle to grasp their expanded, strategic role, which can be ambiguous initially as they find their way. “Many new leaders admit it’s challenging to stay true to themselves, especially with things coming at them so fast,” Sherman says. “Those who are able to stay true to themselves and manage their initial anxiety listen more and seek feedback. That allows them to increase trust and develop powerful relationships.”

• Managing multiple relationships. The higher you climb on the corporate ladder, the more people who want your attention. It’s impossible to do justice to them all so it’s time to prioritize the list to keep your most important working relationships manageable and growing. Extra time is required to invest in and build mutual trust with the new connections without casting aside existing ones. “An effective leader needs to be a juggler of relationships, deciding which to invest in, how much to invest, and when to invest,” Sherman says.

• Building an organization where relationships thrive. An enlightened leader creates a culture where powerful business relationships can flourish. By aligning the culture around a mission supported by values and goals that promote high trust and collaboration, workers are able to take risks, learn from mistakes and adapt quickly, resulting in a successful, ever-growing enterprise. “When structure and culture are not aligned, your organization struggles, failing to fully execute your strategy or realize your vision,” Sherman says. “Often this leads to dysfunction, a toxic environment...”

Doing all this does not come naturally to many. But Sherman insists that the ability to form and nurture these relationships can be learned and even enhanced by those already effective in this area. In her view, those who are most effective exhibit three key behaviors. They are particularly good at:

• Listening rather than talking;

• Being transparent; and

• Connecting.

The last is especially important and can be difficult to pull off because it requires the confidence to spend time talking about things other than business in order to win trust before attempting to forge a business relationship. Essentially, it is akin to the old adage of people wanting to do business with people they think they like. But the important thing to realise is that it is a skill that can be learned like any others. And it is worth developing for the simple reason that the stakes are so high.

As Sherman says, “A major part of a leader’s job is to promote a healthy culture in which people, teams and organizations can succeed by working together productively. You are ultimately responsible for the health of your organization and the health of its critical business relationships. For many companies, these critical relationships become the ultimate strategic advantage.”