An article from Riskinfo E Magazine that highlights the most valuable asset for any business that is often overlooked when looking at the Value of the business, but in reality is the platform on which any good business should be built. It’s about Trust, integrity, and relationships – something we at Active Wealth Managers firmly believe in and practice.
When we think of business capital, it is done in financial terms, for without this asset it is impossible for an advice focussed enterprise to operate or grow.
Mentor Education argues that ‘relationship capital’ is equally vital. In fact, it is the foundation for developing new markets (and clients) – and a quick glance at the financial statements will reveal how much of this asset a business has.
Business isn’t a spectator sport, and how well you develop and nurture relationship capital will define and play a major role in its financial success…or failure.
Building relationship capital
Developing strong relationship capital is a business strategy that’s often overlooked and even approached in a superficial or tokenistic manner.
It’s the relationship capital of your people that combine to become the reputational capital of your business.
But the effort put into building good relationship capital is one of the most cost- effective strategies with potential to deliver extraordinary outcomes.
It takes thought, practice, and the right attitude to get it right with the key focus being trust, sincerity, honesty, integrity and dependability – that when combined create the business culture, and in turn the reputation capital.
The practice principal and key personnel of an advice business build culture over time, as a result of their daily activities and interactions. It’s the relationship capital of your people that combine to become the reputational capital of your business.
When people think of ‘networking’, they often do so through a very narrow prism of networking events, adding contacts to a database, having meetings, etc.
In order to build relationship and reputational capital, a broader view is required.
With every P2P interaction – client, employee, the local café cashier – you’re engaging with people in your network, and the manner in which you speak and engage with each and every one is either contributing to or deducting from, your relationship capital.
Therefore, choose words, topics, and your thoughts carefully.
How many interactions have we all experienced with people that were lazy, argumentative or patronising in the way they sought or articulated information? Those people are undermining their personal and commercial capital, one careless and thoughtless interaction at a time.
We are all brokers of information, and the quality of the information is determined by us, and how well we deliver it.
Networking and engaging with other people is something that deserves more thought and preparation than many people give it. To be successful and effective it must be strategic and tactical in its application and purpose.
If you’re going to put time into networking, you must also put in the effort required to maximise the opportunities and outcomes.
Time isn’t money – relationships are money
Reflect on those significant client win successes: was it related to the number of hours worked each week on the proposal, or was it the rapport and depth of relationship and trust developed with the client?Developing relationships demands a significant time investment, but it’s the quality of the relationships – and the amount of relationship capital developed – that you’ll be able to take to the bank!
The extent to which positive, trusting and solid relationships are built will ultimately be reflected in the balance sheet.
Remember, people can open doors for you, but you must walk through them to find the opportunity. No matter how many networking events you attend, only you can build relationships with the people you meet.
It’s important to understand the opportunity cost to you of not networking well
The cost of not getting it right
Some might say that it’s difficult to measure the success of networking and building relationship capital. I would argue that measuring your success in these areas is as easy as looking at the financial statements of your advice practice.
It takes time to develop good relationship capital, but it’s important to understand the opportunity cost to you of not networking well and failing to develop that capital.
Relationship capital grows into reputation capital for your advice business over time. If you view this type of capital as an asset, you’ll see the sense in growing and protecting it. And as it starts to increase, you’ll see a corresponding increase in opportunities, and in your financial statements.
If you’re a reluctant networker, let me leave you with these two quotes:
“Life isn’t about finding yourself. Life is about creating yourself.” (George Bernard Shaw)
“Death is not the greatest loss in life. The greatest loss is what dies inside us while we live.” (Norman Cousins)
Article from Riskinfo E Magazine
Issued by Mentor Education RTO 21683: www.mentor.edu.au