Building the Relationships That Will Sustain Your Career and Your Firm
It’s harder—but more important Than Ever
“SOMETIMES, I wonder if relationships matter anymore!” a partner in a large professional firm lamented to me recently. He was wringing his hands because his company had been asked to bid in a reverse electronic auction for a consulting assignment. Indeed, some signs point to a diminished role for relationships in many markets. Competition to win important clients has become brutal, and corporate scandals and some self-interested behavior have reduced trust in outside advisors. Furthermore, turnover among senior corporate executive clients has risen, creating a dilemma for the professional that builds up a relationship over many years, only to see his or her client move or get laid off. Other factors, such as the ubiquity of the Internet and greater transparency of market information, have helped create corporate clients who are savvy, sophisticated, and demanding.
A bleak picture? Actually, it’s not as bad as it seems. These trends, however real, are counterbalanced by a growth in the importance and need for trusted, personal relationships in what has become a low-trust world. Executives today face many different types of risk—more so than at perhaps any time in history—and trusted relationships reduce this risk. They also face a greater number of strategic and operational choices, and they will naturally want to work with someone they know well to help them make these difficult decisions.
By understanding how to systematically develop your Relationship Capital, you can in fact build a set of enduring relationships that will power your career and your firm’s business. To do this, however, you need to be willing to make the personal “balance sheet” investments that will help them grow.
Six Types of Relationship Capital
In my work with a broad variety of professionals, I have identified at least six major categories of Relationship Capital—six types of individuals that you must establish vibrant relationships with in order to have a balanced, successful career:
Clients. These are the people and organizations we do business with. When professionals think about their key relationships, they usually focus on past, current, or potential customers. This is an important starting point, but there’s more.
Counselors. Counselors advise and mentor us during our careers, providing support, encouragement, and guidance. Many studies have affirmed the importance of these mentors, but the effectiveness of formal corporate mentoring programs is less clear. You should not wait to be “assigned” a mentor—you have to actively develop relationships with your counselors, both inside and outside your firm.
Catalysts. A rare breed, these individuals can introduce us to others and make deals happen. Catalysts are often bankers, venture capitalists, board directors, and agents—but they can come in many guises. It is no accident that highly connected catalysts like Robert Rubin, the former Treasury Secretary, are so highly sought after for corporate boards and other advisory roles.
Collaborators. Most companies are aided and abetted by an extensive network of collaborators—business partners who really go well beyond the mere role of supplier. A law firm might be an important collaborator for an investment bank, or a business school professor for a consulting firm, for example, just as family practitioners are collaborators for the medical specialists they recommend to their patients.
Colleagues. It’s always been necessary to have a supportive group of colleagues, but as organizations become more global and the delivery of services more complex, this category of Relationship Capital takes on renewed importance. New research supports this, indicating that workplace “stars” don’t always transition well to new companies because they leave behind the supportive, internal networks they have developed with co-workers. In any large organization, your success with clients will ultimately be predicated on your ability to build these relationships.
Companions. These represent the final category of Relationship Capital. Companions are family and friends—a class often ignored by today’s workaholic professionals—who nurture our emotional and spiritual side. Companions help us to be effective with our clients in many direct and indirect ways. Above all, they provide needed balance to our lives, giving us the emotional stability and strength to deal with difficult moments at work. They also often serve as counselors to us, acting as sounding boards and providing calm advice when we are puzzled or uncertain. Usually, our family and friends are able to put our interests first when listening and giving advice, which is why we turn to them so often.
There are two important points to remember about these different types of relationships. First, there can be overlap—it is quite possible for someone to be both a counselor and a catalyst for you, or to be a client and a collaborator. Similarly, many professionals will and should play different roles, at different times, with their own clients. An executive may look to a banker for financing advice (a counselor), for example, but also as a source of introductions (a catalyst).
A Critical Few, Not Hundreds
I’ve suggested that relationships are both more important and harder to build than ever, and that successful professionals create an abundance of broadly defined Relationship Capital rather than a narrow set of client or customer contacts. The next step is to identify and focus on your critical few relationships, a strategy which runs to counter much of the advice proffered by networking experts.
Spurred on by a large and growing literature on the importance of networking, we are supposed to mail hundreds if not thousands of holiday cards, “work the room” wherever we are (even in the Admirals Club at the airport), and hand out business cards by the fistful. We’re supposed to call people on their birthdays, and track the whereabouts of hundreds of contacts. I don’t know about you, but I find this approach both daunting and impractical (and so do most of my clients). Based on my own work with professionals in a variety of service businesses—consultants, accountants, lawyers, investment bankers, financial advisors, and many others whose livelihoods depend on strong client relationships—it is clear that much of this activity is wasted. In fact, a very small number of professional connections—often half a dozen—have an enormous impact on one’s career and, ultimately, on an organization as a whole.
For example: The head of M&A for a leading investment bank told me this story, which is not untypical: “Over the last 15 years I have cultivated a relationship with one particular lawyer in New York. We continually refer deals to each other. We talk once or twice a week. I would say that 15 to 20% of the business I have developed in my entire career has in some way touched this person. He has gotten to know many of the managing directors here, and I have now dealt with nearly 15 partners at his firm. The relationship has to some extent become institutionalized.” Another client of mine, a consultant, says this about a key relationship: “There is one executive that I have worked with for over 20 years, and during this time he has held five different top management and board positions with different, major companies. This relationship has not only resulted in a very large revenue stream over time, but he has served as a reference on many occasions, and referred a number of other important clients to me.” Sound familiar? Or how about this one: “We were in the running for this work with three other firms. What made the difference in the end was a board member who knew me from another client assignment.”
In each case the relationships being described are what we call Network Hubs. Network Hubs are those critical, few relationships that are or can be truly important to you. They have very particular characteristics, and there are specific strategies that can be used to develop them.
It is of course also important to meet new people and to regularly get in front of new, prospective buyers. But the best starting point for your relationship-building plan is to leverage a defined number of your current, highest-priority contacts, while aspiring to build relationships with a few important people that you don’t know today.
Four Key Steps
This exercise is going to take you through 4 steps that will help you prioritize and develop your most important relationships. These steps are:
- Define Your Personal Brand. Why would someone be interested in a relationship with you to begin with? It starts with your personal brand.
- Identify your Network Hubs. Most professionals have between 10 and 25 of these. If you’re at the beginning of your career, you might have fewer; if you’ve been working with clients for 25 or 30 years, you might have more.
- Articulate how you can add value to each Hub, and assess his/her degree of loyalty and connectivity.
- Define a sustaining program to stay in touch and cultivate your Hubs. Record one or more action steps you plan to take to sustain and deepen each Hub relationship.
Assessing the Connectivity and Loyalty of Your Hubs
Connectivity simply refers to the extent to which the person is “plugged in” to a broader set of networks and communities. Some executives, for example, by dint of personality and temperament, love to connect with others through an endless variety of memberships and activities—board directorships, round tables, conference participation, an active personal social network, and so on. In his book The Tipping Point, for example, Malcolm Gladwell makes the case that Paul Revere’s “ride” to alert Bostonians to the invading British was successful precisely because Revere was highly connected. Other leaders, in contrast, focus almost exclusively on their own organizations, eschewing this type of extroverted networking. These individuals, in our terms, have low connectivity.
The loyalty dimension asks how loyal this person is to the individual professional—or potentially to the firm as a whole—who holds the relationship. Keep in mind that loyalty in this sense does not mean exclusivity. A client of yours may be quite loyal to you, but that loyalty is typically in a specific sphere of business and it comes in exchange for ongoing value that you add. In business today, “blind loyalty” hardly exists. Evidence of loyalty can include sustained, repeat business with you or your firm; spontaneous word-of-mouth recommendations; referrals; formal references; and being invited into a trusted advisor, counseling role with the client.
Assess the Connectivity and Loyalty of each of your relationship Hubs, and map them in a 2×2 matrix.
Each quadrant presents a particular set of issues, questions, and potential strategies:
- Potentials. Potentials are, in a sense, the pool from which your Relationship Hubs are ultimately drawn. They could be people you just don’t know enough about to catalog properly in the matrix, or they could be younger professionals whose ultimate potential—and proclivity to connect or become loyal to you—is still undeveloped. I’m also going to give you the opportunity to identify some really long-term “Potentials”—individuals you aspire to meet but with whom you don’t yet have any sort of relationship.
- Connectors. These individuals can make a huge difference with a phone call or even a fleeting reference to you or your company. The question here is, “What can you do that is of value for this individual?” Loyalty, in the complex world of business-to-business relationships, is based on a subtle blend of demonstrated value-added, personal trust, and reciprocity. By cultivating these three factors, you may be able—if only around a specific transaction or niche—to move a connector to the right.
- Loyalists. Loyalists are often current or past clients that you have worked closely with and done a great job for. They fall into the lower-right quadrant because—like many—their connectivity is only average to low. The questions you must ask yourself about Loyalists include, “How can I continually add value and sustain their loyalty?” and also “How can I help make this person more connected?” A major way of adding value to a key individual in your own circle is to plug him or her into a broader network of relationships. The vice president of business development for a Fortune 500 company, for example, told me, “One of the most valuable things that some of our outside consultants and bankers have done is to introduce me to my counterparts at other companies. They have connected me into their network.”
- Multipliers. In the upper-right quadrant are those rare but exceedingly influential relationships with highly connected individuals who are loyal to you. Many professionals have only one or two relationships in this category. These are especially important relationships, and they need to be carefully nurtured and protected. There are several questions to ask about your Multipliers:
How can you partner with Multipliers in innovative ways? For example, coauthoring an article together, jointly developing intellectual capital, bringing the Multiplier into a deal or business opportunity, creating many-to-many relationships so that there is an institutional bond as well as a personal relationship, and so on.
What can you do to encourage or facilitate Multipliers to spread the word about your services and abilities? Are they willing to act as a reference and provide referrals?
The art of developing your key relationships, therefore, is around discovering how to identify future Hubs from the pool of Potentials, creating value for Connectors to increase their loyalty, connecting your Loyalists into broader networks and always working to sustain their loyalty, and partnering closely with Multipliers.
Keep in mind that the sustaining activities you can use to stay in touch with your Hubs fall into four major categories:
- Ideas and content: Following up with ideas, research, perspectives, articles, books, etc.
- Connection: Adding value through introductions—by connecting your Hub into your or your firm’s broader network of relationships.
- Personal help: This can take many forms, from advising someone’s teenager about colleges to providing career advice or the name of a good doctor.
- Fun: Sports, social and cultural events, concerts, dinners, etc.
Different people are interested in different things—you have to get to know your Hubs in order to understand what will appeal to each of them.
To this last point, regardless of which quadrant someone falls into, there are some universal questions that need to be asked:
- How well do you really know these individuals, on both a personal and a professional level? (The last page of this article, “How Well Do You Really Know Your Relationship Hubs?” illustrates the kinds of things you might, eventually, want to know about your Hubs)
- Do you understand their vital interests and needs?
- What can you uniquely do to help them?
- Do you have a sustaining program for each of them? How will you stay in touch and develop the relationship over time?
How Well Do You Really Know Your Relationship Hubs?
As a Person
Spouse or partner, children
Parents’ vocations and interests, siblings.
Educational background
Formative life experiences
Where he/she grew up
Avocations—hobbies, interests
Personal issues he/she may be grappling with
Non-profit or charitable involvement
Personal style: introvert vs. extrovert, detail oriented vs. focused on
big picture, etc.
Risk tolerance
As a Professional
Preferred means of communication (e-mail, phone, etc.)
Work style (early/late, weekends, etc.)
Name of personal assistant
Strengths and weaknesses as an executive
Role models, mentors
Career history: accomplishments positions held
Career goals and aspirations
Most concerning issues right now
Quality/tenor of relationship with his/her boss
Relationships with key direct reports (do you know them?)
Professional associations
Alumni associations
Conference participation
Corporate Directorships
Other top executives he/she associates with
His/her most important “network hubs”
preritgautam 