Why Relationship Economics Matter More than Ever

In my last post on Relationship Economics, a Refresher, I re-introduced the concept as the building blocks of the favor economy. Most professionals, certainly sellers, would agree that buyers and influencers have an exhaustive decision criterion in what to buy with their limited budgets. In doing so, they’ll logically evaluate features and benefits, assess ROI vs. other prioritized uses of the same budget, conduct proof of concept/value with several options, and yet often make their final decisions based on the intangibles - perceptions really about the company, the leadership, and the sales professional they’ve been working with. 

As such, explanations of human behavior are a central part of economics. And how every professional up, down, and across the organization engages and influences those buyers and influencers is a fascinating blend of the art and the science of relationships. The art is more prevalent in our psyche. Search business books on networking, and you’ll likely come up with several thousand. Regrettably, many are pedestrian at best - one I read by a claimed expert actually suggested that you should run into people at events to start a conversation! 

The science is truly fascinating as Social Network Analysis (SNA) focuses on studying patterns in human interaction. The challenge is that it’s incredibly academic and will put most business professionals to sleep in 15 minutes or less. 

Over the past two decades, I’ve found the blend of the art and the science of relationships beneficial. I believe it’s essential to understand the theoretical constructs for their validity as a general law that governs relational and economic phenomena, such as trends in relationship progression along a continuum, just as physics looks at laws that explain the acceleration of a rocket. However, finding laws of human behavior is much harder than explaining the path of a rocket. 

This is why in times of great economic growth, or the challenging ones we face today, Relationship Economics fundamentals create more conversations, which lead to a greater understanding, establishing a foundation of trust, from which we’ve proven the outcomes you seek - from driving revenue to instilling lasting change in every organization and delivering real innovation, will come. Should we spend money when everyone else is cutting back, and what type of returns can we expect in the next 12-18 months from our relationship investments today, these are prudent conversations.

In my writing of this blog, books, keynotes, leadership development programs, and certainly, through the GenAI technology we’re building, our goal is to demystify the complex discussions of something we all agree is critical to our success, relationships, with more quantifiable, strategic, and intentional investments in identifying, nurturing, and sustaining them over time for an extraordinary return.

In the coming weeks and months, I’ll boil down Relationship Economics concepts into accessible explanations that will hopefully make the important and influential ideas of strategic business relationships easier to understand and implement in your own work and life.

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