The Power Of Relationships

As you all know I agree with Margaret Wheatley that the most important influence in organizations is relationships; not systems, not technology, but relationships.

I had the occasion to join a friend last evening with a friend and colleague of his I hadn't previously met. I found his friend to be charming, personable and very articulate. As our discussion turned to the inevitable " so what business are you in", he said that he worked for an organization that distributes a pharmaceutical type of product that is manufactured in Europe. What was especially interesting was that he shared their "distribution" network was almost exclusively based on relationship selling; no large sales force , no "cold calling". It is based on trust and referral.

A week or so ago I mentioned an article by Jeffrey Pfeffer of Stanford. He opined that much of the issue with health care in the United States is in many ways relationship based; most Americans rely on their employer for health care and for economic security. Compared to other countries our "safety net" is pretty small. He talked about the effects of stress about their employment and the accompanying systems like health care tied to employment and the direct correlation to health care issues. I agree with him.

I read some articles and listened to a couple of "idea casts" on BNET this week that illustrated the same thing from a different angle- the relationship between employees and leaders and how in these times especially employees watch their leaders for any sign of positive or negative events or signs. They do that normally, but in these times it is exacerbated to the nth degree. Marcus Buckingham says the most important attribute of leadership is clarity- people want to believe their leaders have a vision.

My own personal research validates information published by Peppers and Rogers, BlessingWhite, Gallup, and others about the power of engagement. I am talking about true engagement which includes customer, employee, shareholder, and stakeholder. Organization's with high engagement outperform their competitors consistently and by an order of magnitude. Engagement is about relationships.

I have written and spoken a lot lately about social networks and their increasing importance in communications strategy. I believe that social networking is about relationships.

I have also written and spoken about the "social contract". In historical times the poor were tied to the wealthy. They literally "belonged" to the property or estate for hundreds of years. The American "experiment" was all about eliminating that. You could come here and reinvent yourself.
You could homestead a piece of property of start a business. Then we ran out of frontier. Consistent with the rest of the world the Industrial revolution occurred. We exchanged the value of personal competence for the promise of "security" in return for "obedience" The power of the great capitalist was tempered only by the labor movement. That was about relationships,
however dysfunctional.

The "world" economy changed that social contract. American industry was not always dominant, our quality suffered and correspondingly so did our market share. Interestingly much of the "new" management models like lean manufacturing and TQM have very strong relationship components to them. U.S. companies retreated from economic security in return for "loyalty". Traditional pension plans are almost obsolete. The parental relationship between employers and employed relative to health care is in crisis mode. Our health care model is parental. We don't address root causes of costs, we shift them around. People don't want to share responsibility for their health or the costs of treating them. That is a relationship, although another dysfunctional one.

I am not suggesting that a "parental" model is appropriate. Anybody that has ever heard me speak, worked with me, or read any of my writing knows better. I rather like the concept of "personal competence" and relationships founded on mutual respect and honesty between employer and employed, taxpayer and government, supplier and customer, and individuals. A relationship based on respect, information, and mutual responsibility and built on a foundation of trust. Maybe I am just nostalgic or misguided, but I think that is what the Founding Fathers meant so many years ago when they formed this country.

Tomorrow is Independence Day, maybe a good day to reflect on what they meant and the critical relationships in each of our lives. I think that is what I'll do, how about you?