In this final lesson, we're going to look at how you proactively manage relationships with your key contacts. So few of us do it. It was something I left to chance for much of my early career. And the further I progress, the more attention I'm now paying to this aspect of relationship building. Tom Spalding wrote a really great book entitled, it's not just who you know, which offers excellent ideas, Spalding suggests that many of us overlook the economics of relationships. He believes that the return on relationships or borrower is every bit as important as return on investment, or ROI.
In fact, in some of our organizations, these two metrics work at cross purposes, when we have a myopic view of focusing on the bottom line, disregarding the importance of relationships. For example, in finance, we tend to be the first one to cut out the meal entertainment budget when we go on a cost cutting initiative, whereas the sales people argue though are very necessary investments in developing deeper relationships with customers. When we look at how business is won or lost, whether projects are delivered on time and on budget, whether employees follow their leaders, all of these outcomes come from the strength of relationships. Return on relationships comes from stronger culture, stronger brands, higher morale, commitment and engagement, higher customer satisfaction and retention. financial results are always important, but should be balanced within need for developing stronger relationships. The cost of poor relationships shows up in lost sales, employee turnover, and lost productivity.
Spalding believes that organizations should cultivate a relationship driven culture to be successful. In doing so, organizations can propel themselves to new levels of achievement and Spalding opinion relationship economics boils down to this one simple equation. Relationships plus vision impact. We all have those equations as finance people. Relationships go hand in hand with identification and pursuit of a shared vision. When both are present, meaningful impact can be achieved.
We will come back to the importance of having a vision when we talk about credible leadership. In a later course, Spalding identifies that we have five levels of relationships with people in our personal and professional lives. relationships can move between levels, but by determining which contacts live on each level, we can become more proactive in how we promote or demote context between different levels. First level relationships are the meet and greet relationships. You often need specific pieces of information or something else from another person. You engage in dozens of these every day.
All relationships start here, but you rarely make effort to grow relationships past this point. you've likely got dozens if not hundreds of business cards you've collected Over the years, and may have hundreds or thousands of LinkedIn, Facebook and Twitter followers, most of these people you can hardly remember, perhaps you've never actually even met them. Are you going to do any business with these people? Or are they going to with you? The answer is usually a resounding no. Second level relationships evolve when you begin sharing basic non personal information, contacts at this floor become acquaintances.
Spalding refers to these relationships as NSW relationships as we talked about in the last lesson, new sports and whether you still don't share personal things about yourself that make you vulnerable. You will notice that when we talk about acquaintances, life is always perfect. Just like we see those Facebook posts. You don't let them in on any professional or personal secrets. These are people that we are comfortable to approach in most situations, but they probably aren't people that we're likely to do business with, because we really don't know them that well. Third Level relationships result when you develop an emotional connection with your contact, you begin sharing your opinions, you begin sharing your position on issues.
In doing so your contact begins to understand you, your beliefs and your values. Now we're getting somewhere. These are people that we understand and might be able to work with. fourth level relationships evolve. When you share common interests goals, you work through conflicts, and you've shown that you value the relationship with your contact. This level of relationship tends to expose vulnerability, but you extend that trust and expect that the other person will not violate that confidence.
Achieving this level of relationship with someone takes work. You aren't going to achieve a level four relationship by meeting someone at the Chamber of Commerce dinner. But after you meet that person, you can cultivate that relationship by asking them to lunch, giving them tickets to an event. sending them an interesting article or book. In fifth level or penthouse relationships arise when you are totally vulnerable, loyal, trustworthy and authentic with your contact, you almost develop an intuitive understanding of each other's needs. It's a relationship based on giving you become confidence advisors and help each other achieve mutual goals.
Level four and five relationships have an element of love and personal interest embedded in the relationships. When we love someone we are personally committed to their interests and well being. Many of us have Fifth Level relationships with a very small select group of people in our lives. Think of the fifth level relationships in your life as your own personal board of directors. These are the people you likely love unconditionally, steadfastly loyal to you and you to them. People who have each other's backs.
We can't have penthouse relationships with everyone, however, We can have a penthouse relationship with anyone. Don't close the doors to the penthouse, there is an opportunity to develop this level of relationship with a greater number of people than you realize right now when you proactively cultivate relationships, it's entirely possible and desirable to keep bringing in new people to the penthouse through your career and life. The penthouse should be populated by individuals from your personal as well as your professional lives. Finally, remember that once attained penthouse relationships need sustaining catbacks that's an idea that those of us in finance can relate to. You don't let them into the penthouse and then never connect with them again. To retain a level five relationship requires a mutual investment of time, interest and love to sustain.
Making level one and two relationships is relatively easy, and doesn't take much work. The problem with level one and two relationships is they aren't really that meaningful. There's no connection between yourself and the other person. And as a result, when opportunities arise to do important work together, or when they're thinking about making decisions in which you might have an interest, hiring, purchasing, etc, your name doesn't come to mind. That's why very little business is actually conducted through simple resumes or LinkedIn profiles. Your credentials and experience are very important parts of building relationships.
But absent the emotional connection, you will be left out when it comes to developing relationships that give you executive presence. So it begs the question, how will you build deeper relationships? I'm talking at least the third level and ideally higher. Think about that for a moment. What steps will you take to move beyond level one and level two? Perhaps you considered taking a genuine interest in finding out more about them and move the conversations beyond the news, sports and weather.
Keep probing different interests until you find areas of common ground. Common Ground can arise in our personal lives. For example, when our kids both play hockey, or in our professional lives, we're both members of the same Industry Association. Follow up and keep following up and make and keep personal notes about these people. You can personalize your messages and your conversations to demonstrate interest in the contacts life. In your workbooks, you can follow along and do this yourself in exercise number six.
In this exercise, we're first going to scroll through your contacts and just note the key people in your personal and professional life. categorize the level of relationships you have with each contact by placing their initials under one of the five columns. circle the key people on which you desire stronger relationships. drawn arrow to the level in which you aspire to grow this relationship. And finally, identify strategies you might use to move between each of the floors. What are some of the strategies that you came up with?
Some of the things I can think of to build stronger relationships? How about volunteering, working with people with whom you'd like to get to know better, perhaps working on the same fundraising event? Spend more time actively listening to people and discovering what their true interests are. Find out who else is in the inner circle of someone that you'd like to get to know better, and perhaps they can give you a personal introduction. Pay attention to the contacts spouse or significant other spouses have a tremendous amount of influence. So it's important that we incorporate them into our relationship vision.
Think about consistent communication with contacts, certainly not spamming them or anything but touching base every quarter or every six months with an interesting article. What about driving Someone to the airport. It's a way to get 30 minutes of their time, and then they can owe you a favor. The bottom line is that there are many, many ways to build strong relationships. You just need to think proactively.