If you want to go Fast, Go Alone. If you want to go Far, Go with Others.
I must admit that while I was writing my last blog on social media advertising as a crucial customer touch point, my mind was already filled with hundreds of questions on the premise of how various dimension of business relationships impacts upward improvement in revenue, profitability, stock prices, intellectual properties, brand, product utilisation, partner networks, markets, productivity, customer satisfaction, employee satisfaction, reputation and many other outcomes too granular to be mentioned.
What a grave mistake it would be to simply engage into action, accompanied with just a ‘gut feel’, before analysing these relationships, its layers and tiers; correlatives; strength; values or risks to your business? Instead, should we be calling our actions and channeling our investments based on the conditions of key relationships to the business? How does one relationship affect the other? For example, negative energy accumulating in the workforce can certainly impact customers and partners which are critical to growth; ruthless investor activism that pushes leadership into buy back programs and dividends during sales slump to quickly raise return of stocks will not only result in exhaustion of enterprise coffers, but will contribute greatly to income inequality in the workforce and the society in general.
There are countless number of ways to bring structure and automation to track most of these relationships, but a bubble diagram is perhaps sufficient to initiate study and map m utual values, which paves the way to mark priorities according to business goals. In fact, any investment on marketing, advertising and automation should take into consideration of such priorities and value creation activities. Making this a critical exercise especially for small businesses in rapid growth mode with small caps and trust me that this blog will not lead you to a CRM dialogue of any ‘X’ factor as a necessary point of resolution but may influence such conversations in the future.
A Case to Reflect
Long standing enterprises that has been around for over hundreds of years such as Colgate-Palmolive ( or Colgate rather), Coca-Cola, Citi, IBM and GE were some examples of businesses which survived the test of time mainly due to their founding executives ability to visualise, create, manage and control internal and external business relationships to generate an overall positive vibe that fuelled growth.
Coca-Cola for instance, was once sold for 5 cents a glass and started business in the late 19th century with just total of 7 or 8 serving a day through soda fountains. Today, this business has grown close to 1.9 billion serving per day and I need not explain the prices nor its brand prowess. The creator of this drink John Pemberton, a pharmacist and a war veteran was hoping to find an alternative or cure for morphine addiction, as many people suffered such an addiction back then due to the war, just like Pemberton. In fact, the first version of this drink was a coca-wine (alcohol and cocaine infused drink) like many other carbonated fountain drinks of the time (e.g from Spain and France). The non-alcoholic version was created only after the banning of such ingredients in fountain drinks (even though I strongly believe that the coca leaves are still a key ingredient ). At the time, Mr Pemberton also claimed that Coca-Cola cured many diseases, including morphine addiction, indigestion, nerve disorders, and headaches, though these aren't the reasons why we drink coca-cola today. How this business grew to what it is today? I would think finding the the secret recipe to an elixir that appealed to a global taste bud was the easiest part.
Pemberton, sold his business, prior to his death, to several businessmen including a young druggist, Asa Candler. Pemberton, also brought his sons to hold different property rights of the business. Candler, saw the potential of the drink and started building his downstream relationships following the soda fountain trails of restaurants, bars and other recreational outlets despite infighting among the different stakeholders including a thorny relationship with one of Pemberton’s son. Candler also observed the increasing demand as a further opportunity to bring Coca-Cola directly to customers by bottling it with partners. Candler watched competition and imposters closely in order to understand how they try to clutter the market and introduced the unique design of the the bottle that is still in use today, to help customers choose the original product. Candler’s focus on relationships that created an advantage to his business soon overwhelmed and helped to severe toxicity from the equation and made more room for expansion.
A ‘Scribble’ is as good a Start as a ‘Doodle’
Sometimes finding the starting point is the hardest – and this is when a general mind map of all relationships that affect your business can come in handy. Scribble it or take it a notch further, just for the fun of it and doodle it (no one said business have to be boring or characterless).
Startups might find this exercise pretty straight forward if you are dealing with a single or range of interrelated products aimed at the same market category. A simple bubble diagram, indicating upstream, lateral and downstream relationships (see illustration 1 – Sample Key Relationship Analyses), along with markers to identify layers of connections is useful visual analyses which helps to get detail idea of your current relationship trends, returns, advantages, risks, value creation and investment activities. In small companies, this can be a revealing exercise that points you where much of your resources is being consumed and if the returns are worthwhile. Save the diagram, and you will see that the story it tells, will change as you revisit them every quarter. In fact, you may also observe changes in business relationships for the better or worst depending on incidents and actions that your business may have undertaken. This will also help the business from refraining or changing tactics where relationships are cold and value creation there would just be like running ghost trains.
Prioritise Relationships - Finding the Perfect Balance
But the idea to get into this exercise is not just to identify types of relationships and where bulk of your investments are being absorbed or even what improvement is being attempted in the past. It is, sort of a barometer to the validity of your current business models and identify which relationships deserves your utmost attention at this moment in line with growth agendas (which changes from time to time). Evidently, there are hundreds of relationship commitment hypothesis, studies and best practises contributed by researchers on how to form long standing buyer-seller relationship stratagems in a variety of businesses and non profit backdrops (e.g. Equality, Trust, Openness, Rationalism - Smith 1998; Overall Satisfaction - Garbarino & Johnson 1999; Cost of Relationship Discontinuation – Morgan and Hunt 1994; Flexibility - TA Scandura & MJ Lankau 1997), and much of these practices have been assimilated according to industry settings into best breed of technology solutions for easier and faster consumption by businesses. However, what’s missing though is the simplification process of these various commitment variables which is equally critical in growing startups and small businesses.
E.g An IT service provider whom developed a tool that could help enterprise customers migrate swiftly from one cloud to another can choose to sell the tool and relevant services directly to customers facing such business pain. But upon proving the successful adoption of the tool, they may also see the potential to sell through partners and vendor marketplaces who may be in an ideal position to offer clients a transaction economics that the tool creator themselves are not able to deliver due to specialisation or other resource constriction. Hence, this becomes a question and point of decision between growing the partner network and the direct sales, or both. If so, what would be the ratio to be applied for ideal outcome.
Arms Length Transactions are not necessarily Evil
Many small businesses today are present online with complete automated systems. Clear content on products and terms of sale are self explanatory with online support for customers who may have additional requirements or questions. Apparel, groceries, movie tickets and other cyclical or standardised products (e.g cloud services) get sold without the need for a sales person to interact with each and every one of the customers. These customers don’t expect personal treatment, but just personalised services and products up to their expected quality of standards along with data protection and security assurance. Here, there is a necessity to capture and analyse customer data, purchase history and trends to make appropriate future updates or offers to woo the customers to return and form loyalty to the brand. Often the customers who fall in this category has a tendency to switch from one shop to another easily and as such understanding what is transaction economics to them is critical in deciding and architecting the right loyalty program, advertising media or partners to worky with. E.g. a wine shopper might also appreciate relevant wine accessories, gifting services or the right cold cuts and cheese to go with the wine, all in one place instead of having to visit 3 or 4 shops.
In other words, unlike popular believe, businesses can establish loyalty with arms length relationship by anchoring on the right value creation activities and fulfilling expectation voids left by competitors. As such, instead of running intensive loyalty campaigns for adhoc transactional clients, you might be better off, turning to methods of acquiring and maintaining them cost effectively apart from making continuous differentiation in your offerings. In addition, the freed sales resources can now be repositioned to work on other market segments that needs personal and advisory services to grow(e.g. B2B solutions).
Expect Toxicity and Difficult Relationships
In my years of observations (and personal experience), I am yet to find an enterprise or startup that is not faced with difficult or toxic relationships (futile search, but why not?). Mark Zukerberg and Eduardo Saverin of Facebook, the Ambani brothers of Reliance India, and the fallout between media mogul, Rupert Murdoch and Richard Li of the HK Satellite TV, are just some high profile known examples to back this.
Partner disputes over shares, intellectual properties and other business rights; a toxic employee or manager de-energising your workforce; a channel partner or sales person taking your business hostage by claiming exclusivity to relationships; technical staff making unreasonable demands in return for critical business assets; or clients threatening to switch provider if you don't lower prices or insist to work with only certain individuals; fraud; and other acts of sabotage are all common difficult relationship situations that can sow dissension and clutter in the business. The absence of or loose governing policies, contracting, legal and other enterprise services in startups and small businesses tends to make this worst. Some organisations become critically effete and drained due to the distractions. Others, take a stance to stay on course with goals and thrive in success by addressing conflicts firmly while putting in place mechanisms to protect critical intellectual, material and relationship assets.
Rewarding Relationships are Manufactured by Minds
“Hear much, leave all that is doubtful alone, speak warily of everything else, and few will be offended. See much, leave all that is dangerous alone, deal warily with everything else, and thou wilt have little to rue. If thy words seldom give offence, and thy deeds leave little to rue, pay will follow.”, Confucius.
Point is, you could be in possession of a ground breaking idea, a disruptive technology patent, abundant materials, and a ready market to adopt your offerings. Though, without identifying and cultivating the right relationships, mutual interests, trust, needs and co-dependence, mobilising these resources could end in long time to return or worst, fails to return.
The effects of advances in multiple enterprise technology disciplines that is transpiring through cloud services for superior infrastructure and applications services; advance analytics; automation of business processes; along with the rise of mobile and sensor based devices today, are driving digital transformations of every imaginable industry. Enabling us with valuable data, that can complement the humble bubble diagram that we talked about earlier in the blog. This present us opportunity to compare real figures of performance against relationships; recognise what we do and don’t know; where advantages exist; and where an upper hand’s support is critical to succeed. This is where we bring our multi-dimensional intelligence into work – the best of social, emotional, intellectual, qualitative, empiric and quantitative capabilities to unearth best call of strategies and actions to hold strong the founding virtues of the business.
I must admit that while I was writing my last blog on social media advertising as a crucial customer touch point, my mind was already filled with hundreds of questions on the premise of how various dimension of business relationships impacts upward improvement in revenue, profitability, stock prices, intellectual properties, brand, product utilisation, partner networks, markets, productivity, customer satisfaction, employee satisfaction, reputation and many other outcomes too granular to be mentioned.
What a grave mistake it would be to simply engage into action, accompanied with just a ‘gut feel’, before analysing these relationships, its layers and tiers; correlatives; strength; values or risks to your business? Instead, should we be calling our actions and channeling our investments based on the conditions of key relationships to the business? How does one relationship affect the other? For example, negative energy accumulating in the workforce can certainly impact customers and partners which are critical to growth; ruthless investor activism that pushes leadership into buy back programs and dividends during sales slump to quickly raise return of stocks will not only result in exhaustion of enterprise coffers, but will contribute greatly to income inequality in the workforce and the society in general.
There are countless number of ways to bring structure and automation to track most of these relationships, but a bubble diagram is perhaps sufficient to initiate study and map m utual values, which paves the way to mark priorities according to business goals. In fact, any investment on marketing, advertising and automation should take into consideration of such priorities and value creation activities. Making this a critical exercise especially for small businesses in rapid growth mode with small caps and trust me that this blog will not lead you to a CRM dialogue of any ‘X’ factor as a necessary point of resolution but may influence such conversations in the future.
A Case to Reflect
Long standing enterprises that has been around for over hundreds of years such as Colgate-Palmolive ( or Colgate rather), Coca-Cola, Citi, IBM and GE were some examples of businesses which survived the test of time mainly due to their founding executives ability to visualise, create, manage and control internal and external business relationships to generate an overall positive vibe that fuelled growth.
Coca-Cola for instance, was once sold for 5 cents a glass and started business in the late 19th century with just total of 7 or 8 serving a day through soda fountains. Today, this business has grown close to 1.9 billion serving per day and I need not explain the prices nor its brand prowess. The creator of this drink John Pemberton, a pharmacist and a war veteran was hoping to find an alternative or cure for morphine addiction, as many people suffered such an addiction back then due to the war, just like Pemberton. In fact, the first version of this drink was a coca-wine (alcohol and cocaine infused drink) like many other carbonated fountain drinks of the time (e.g from Spain and France). The non-alcoholic version was created only after the banning of such ingredients in fountain drinks (even though I strongly believe that the coca leaves are still a key ingredient ). At the time, Mr Pemberton also claimed that Coca-Cola cured many diseases, including morphine addiction, indigestion, nerve disorders, and headaches, though these aren't the reasons why we drink coca-cola today. How this business grew to what it is today? I would think finding the the secret recipe to an elixir that appealed to a global taste bud was the easiest part.
Pemberton, sold his business, prior to his death, to several businessmen including a young druggist, Asa Candler. Pemberton, also brought his sons to hold different property rights of the business. Candler, saw the potential of the drink and started building his downstream relationships following the soda fountain trails of restaurants, bars and other recreational outlets despite infighting among the different stakeholders including a thorny relationship with one of Pemberton’s son. Candler also observed the increasing demand as a further opportunity to bring Coca-Cola directly to customers by bottling it with partners. Candler watched competition and imposters closely in order to understand how they try to clutter the market and introduced the unique design of the the bottle that is still in use today, to help customers choose the original product. Candler’s focus on relationships that created an advantage to his business soon overwhelmed and helped to severe toxicity from the equation and made more room for expansion.
A ‘Scribble’ is as good a Start as a ‘Doodle’
Sometimes finding the starting point is the hardest – and this is when a general mind map of all relationships that affect your business can come in handy. Scribble it or take it a notch further, just for the fun of it and doodle it (no one said business have to be boring or characterless).
Startups might find this exercise pretty straight forward if you are dealing with a single or range of interrelated products aimed at the same market category. A simple bubble diagram, indicating upstream, lateral and downstream relationships (see illustration 1 – Sample Key Relationship Analyses), along with markers to identify layers of connections is useful visual analyses which helps to get detail idea of your current relationship trends, returns, advantages, risks, value creation and investment activities. In small companies, this can be a revealing exercise that points you where much of your resources is being consumed and if the returns are worthwhile. Save the diagram, and you will see that the story it tells, will change as you revisit them every quarter. In fact, you may also observe changes in business relationships for the better or worst depending on incidents and actions that your business may have undertaken. This will also help the business from refraining or changing tactics where relationships are cold and value creation there would just be like running ghost trains.
Prioritise Relationships - Finding the Perfect Balance
But the idea to get into this exercise is not just to identify types of relationships and where bulk of your investments are being absorbed or even what improvement is being attempted in the past. It is, sort of a barometer to the validity of your current business models and identify which relationships deserves your utmost attention at this moment in line with growth agendas (which changes from time to time). Evidently, there are hundreds of relationship commitment hypothesis, studies and best practises contributed by researchers on how to form long standing buyer-seller relationship stratagems in a variety of businesses and non profit backdrops (e.g. Equality, Trust, Openness, Rationalism - Smith 1998; Overall Satisfaction - Garbarino & Johnson 1999; Cost of Relationship Discontinuation – Morgan and Hunt 1994; Flexibility - TA Scandura & MJ Lankau 1997), and much of these practices have been assimilated according to industry settings into best breed of technology solutions for easier and faster consumption by businesses. However, what’s missing though is the simplification process of these various commitment variables which is equally critical in growing startups and small businesses.
E.g An IT service provider whom developed a tool that could help enterprise customers migrate swiftly from one cloud to another can choose to sell the tool and relevant services directly to customers facing such business pain. But upon proving the successful adoption of the tool, they may also see the potential to sell through partners and vendor marketplaces who may be in an ideal position to offer clients a transaction economics that the tool creator themselves are not able to deliver due to specialisation or other resource constriction. Hence, this becomes a question and point of decision between growing the partner network and the direct sales, or both. If so, what would be the ratio to be applied for ideal outcome.
Arms Length Transactions are not necessarily Evil
Many small businesses today are present online with complete automated systems. Clear content on products and terms of sale are self explanatory with online support for customers who may have additional requirements or questions. Apparel, groceries, movie tickets and other cyclical or standardised products (e.g cloud services) get sold without the need for a sales person to interact with each and every one of the customers. These customers don’t expect personal treatment, but just personalised services and products up to their expected quality of standards along with data protection and security assurance. Here, there is a necessity to capture and analyse customer data, purchase history and trends to make appropriate future updates or offers to woo the customers to return and form loyalty to the brand. Often the customers who fall in this category has a tendency to switch from one shop to another easily and as such understanding what is transaction economics to them is critical in deciding and architecting the right loyalty program, advertising media or partners to worky with. E.g. a wine shopper might also appreciate relevant wine accessories, gifting services or the right cold cuts and cheese to go with the wine, all in one place instead of having to visit 3 or 4 shops.
In other words, unlike popular believe, businesses can establish loyalty with arms length relationship by anchoring on the right value creation activities and fulfilling expectation voids left by competitors. As such, instead of running intensive loyalty campaigns for adhoc transactional clients, you might be better off, turning to methods of acquiring and maintaining them cost effectively apart from making continuous differentiation in your offerings. In addition, the freed sales resources can now be repositioned to work on other market segments that needs personal and advisory services to grow(e.g. B2B solutions).
Expect Toxicity and Difficult Relationships
In my years of observations (and personal experience), I am yet to find an enterprise or startup that is not faced with difficult or toxic relationships (futile search, but why not?). Mark Zukerberg and Eduardo Saverin of Facebook, the Ambani brothers of Reliance India, and the fallout between media mogul, Rupert Murdoch and Richard Li of the HK Satellite TV, are just some high profile known examples to back this.
Partner disputes over shares, intellectual properties and other business rights; a toxic employee or manager de-energising your workforce; a channel partner or sales person taking your business hostage by claiming exclusivity to relationships; technical staff making unreasonable demands in return for critical business assets; or clients threatening to switch provider if you don't lower prices or insist to work with only certain individuals; fraud; and other acts of sabotage are all common difficult relationship situations that can sow dissension and clutter in the business. The absence of or loose governing policies, contracting, legal and other enterprise services in startups and small businesses tends to make this worst. Some organisations become critically effete and drained due to the distractions. Others, take a stance to stay on course with goals and thrive in success by addressing conflicts firmly while putting in place mechanisms to protect critical intellectual, material and relationship assets.
Rewarding Relationships are Manufactured by Minds
“Hear much, leave all that is doubtful alone, speak warily of everything else, and few will be offended. See much, leave all that is dangerous alone, deal warily with everything else, and thou wilt have little to rue. If thy words seldom give offence, and thy deeds leave little to rue, pay will follow.”, Confucius.
Point is, you could be in possession of a ground breaking idea, a disruptive technology patent, abundant materials, and a ready market to adopt your offerings. Though, without identifying and cultivating the right relationships, mutual interests, trust, needs and co-dependence, mobilising these resources could end in long time to return or worst, fails to return.
The effects of advances in multiple enterprise technology disciplines that is transpiring through cloud services for superior infrastructure and applications services; advance analytics; automation of business processes; along with the rise of mobile and sensor based devices today, are driving digital transformations of every imaginable industry. Enabling us with valuable data, that can complement the humble bubble diagram that we talked about earlier in the blog. This present us opportunity to compare real figures of performance against relationships; recognise what we do and don’t know; where advantages exist; and where an upper hand’s support is critical to succeed. This is where we bring our multi-dimensional intelligence into work – the best of social, emotional, intellectual, qualitative, empiric and quantitative capabilities to unearth best call of strategies and actions to hold strong the founding virtues of the business.
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