Jean Roberts

There is an art and science in ensuring that each of your Business Relationships is an investment – and not just a cost.  The bottom-line is that each business relationship must add a measurable value to your business – preferably in the short to medium term, but certainly in the longer-term.

The trust factor can protect you and your business interests.  But to do this, you need to check your trust style.  Do you assume trustworthiness when you firstly engage with a person?  Or do you wait and watch for evidence of trustworthiness before deciding whether and how to engage with that person?

1. Strategic Business Relationships

Most businesses will have relationships with a number of external organisations, groups and individuals.   These may provide access to information, advice, trends, learning and development, or social or formal networking with like-minded people.   The challenge for any business is to ensure that each business relationship is an investment – which means it either creates or adds measurable value to the business.

There is an art and science to ensuring that each of your Business Relationships is an investment – and not just a cost:

Art is the doing of a thing.  You may have a need, challenge or opportunity, and decide to look for individuals or groups who may be able to assist or be useful.  The next step is to find out as much as you can before committing yourself and accessing their information, advice, data-base, workshops – or paying your subscription and entering in to a formal relationships.

You may decide that a business opportunity is in sight but that you wish to consider becoming part of a consortium or alliance – or even considering a partnership.

Science is the understanding of a thing.  It is necessary to understand and appreciate the practical implications of what you do, why you should do one thing and not another, how you assess risk and how you will manage any ensuing commitment.

If you understand your business relationship activity, you will be able to monitor and measure progress, value and costs.

Strategic business relationships – by very definition – are relationships that will contribute to the viability, credibility or durability of your business.    You need to strategically design this aspect of your business to ensure minimal cost and maximum benefit or value.  You will need to invest some of your scarce resources – which could be membership dues, registration fees, travel costs – or more importantly opportunity cost.  If you are convinced that time spent in each business relationship is an investment, then assess and then measure the investment as compared with the cost.

2. The Trust Factor

Trusting is a different challenge – and you will also need to work on this continuously.

The trust factor can protect you and your business interests.  But to do this, you need to check your trust style.  Do you assume trustworthiness when you firstly engage with a person?  Or do you wait and watch for evidence of trustworthiness before deciding whether and how to engage with that person?

The ideal starting point in a potential business relationship is to adopt a neutral attitude and expectation of others, and to manage trust by seeing if others earn or deserve our trust, or if they should not be entitled to or worthy of our trust.

If a business relationship earns your trust, the next step is respect, then willingness to collaborate, perhaps even dependence, and finally investment of time, energy or even money:  the ideal business relationship is one of mutual trust and respect where both parties work at retaining that trust.

On the other hand, if a business relationship does not earn your trust – or deteriorates at any stage along the path toward investment – you should heed any warning sign, which may turn to a sense of alarm: a relationship rarely survives the alarm stage – if it does, it has a high possibility of becoming dysfunctional and finally breaking down.

However, you can find yourself remaining in a dysfunctional working relationship if you either fail to recognize that this has happened, or have put yourself into a situation from which it is difficult or perhaps impossible to retreat or escape.

Be aware that, as a business person, you we can be charmed, tricked or cajoled into trusting another person or group of people, so that you subconsciously give them your trust rather than waiting for them to earn or deserve it.  This can result in your committing to an arrangement without checking whether the other party is worthy of such commitment.  On the other hand, you can hear something about a person before meeting them that may set off a warning or even raise an alarm within you: then, when you do meet them, you withhold our trust unnecessarily, thus negating any chance of an effective relationship.

Probably the hardest thing for a business person is managing trust.  And I need to emphasize that the key word in the previous sentence is ‘managing’ – it is your responsibility to manage trust, not the responsibility of others.  If someone lets us down or takes advantage of you, you need to look for the moment that you allowed this to happen.    If you genuinely look for it, you are sure to find it.  And there is your lesson upon which to build better trust management.

3. Strategic business relationships Checklist – checking the trust factor

This Checklist is a ‘to do’ list to follow – so make sure to read the following sections of my earlier writing:

1. Governance Kit No. 2 – Partnership Relationships

-       Features a 9-stage flowchart to establish an effective partnership relationship

2. Competitive Tendering – how to write a competitive tender

-       Features a detailed sections on analysis of existing relationships and strategic planning

3. Managing Governance in Nonprofit Organisations in Australia – book/CD ROM

-       Features several relative Units

4. The Left and Right Brain Business

-       Features the benefit of orientation in developing effective business relationships

5. One Man Show – the smallest of small business

-       Features a detailed ‘Continuum of Trust’ to assist in monitoring trustworthiness

6.      Issue Paper No. 37 – Stakeholder Analysis and Stakeholder Survey

-       Features detailed tools for assessing current and desired business relationships

• Governance Kit No. 2 – Partnership Relationships
• Competitive Tendering – how to write a competitive tender
• Managing Governance in Nonprofit Organisations in Australia – book/CD ROM
• The Left and Right Brain Business
• One Man Show – the smallest of small business
• Issue Paper No. 37 – Stakeholder Analysis and Stakeholder Survey