There’s an old adage that relationships are both an art and a science. Reaching a potential client is the science. The art is conveying your sincerity to that client and getting them to believe that you will actually do everything you say you can. At the confluence of art and science, you find successful relationship building and the achievement of goals, whether those goals are financial or not.
The essence of relationship building (and relationship management) can be distilled down to one thing: truth. Sincerity and honesty will be the foundation of your strongest relationships and build the most valuable relationship capital. Keeping in mind that truth and a genuine approach underlie everything we’ll talk about in this article, let’s get into more detail about exactly what relationship capital is and why it matters.
What is Relationship Capital?
Simply put, relationship capital is all relationships within and between organizations. It is an element of your company’s intellectual capital and can include partners, vendors, former employers, personal relationships, and more. The “capital” comes from the value of the connection between these people or entities: the power or influence wielded by a role, the strength and type of the relationship, the number of relationships shared, etc.
Relationship capital is often intangible and notoriously difficult for companies to measure, yet it is universally agreed to be critical to the success and growth of any venture.
Why Relationship Capital Is Your Company’s Most Crucial Asset
Because of its intangibility and near-impossibility to measure, relationship capital has become the most under-utilized asset in organizations. Quite simply, most companies don’t know how to leverage it in an effective way. Yet virtually no dollar is spent without a relationship behind it – all successful deals, investments, and sales are based on relationship capital. It is the single best way to open doors and get introductions, and then maintain connections.
Standard of Trust founder Rob Peters is a vocal advocate for companies to invest more in relationship capital and frequently shares his insights on social media, including this apropos tweet:
@StandardofTrust: Not B2C or B2B, it is P2P. People buy from people they know like, & trust. It’s about building relationships today! #RelationshipCapital
Your organization should care about relationship capital because it is the underlying foundation on which all decisions are made.
Studies About Relationship Management & Capital
Analyzing relationships has long been a fascination of scientists, and the modern era of Big Data and fast technology has only increased the number of (and need for) these studies. A few recent studies focusing on elements of relationship capital are worth highlighting in this article for further background on this topic.
- The Importance of the First Relationship: The Ongoing Influence of Initial Network on Future Status
Analyzing a panel of 272 U.S. venture capital firms from 1980 to 2004, this study tested whether the “reputation of newcomers’ first partners exerts a positive influence on their future status.” In other words, would the very first partner these venture capital firms chose to work with impact their future partners, and subsequent network? The findings were that there was a long-term positive influence for newcomer firms whose first partners formed a “cohesive network.” Your reputation and value will be irrevocably tied to that of your partners or primary network, particularly your first connections.
- The Key to a Better Board: Team Dynamics
Surveying 182 directors of boards for companies with market values of $2 million to $78 million, this study was focused on boardroom dynamics. Directors rated interactions based on several factors, such as engagement, active listening, openness, and influence. Directors also scored what the interactions should have been like to maximize effectiveness. The results aren’t surprising and further reinforce the importance of relationship capital, even within an organization. The boards that functioned well as a team accomplished more company goals and were more profitable. The quality of board members’ interactions and relationships are critical to the success of that board, and therefore decisions they make for a company. Assembling an effective board is just as much about balancing the relationships as it is about assembling a wealth of experience.
- Nurturing interpersonal trust in knowledge-sharing networks
Referring back to the introduction of this article, trust is a foundation element to all relationships, and therefore an integral element of relationship capital. In this study, 20 organizations were interviewed to map ways in which interpersonal trust develops. The premise being that informal networks (relationship capital) are the “primary means by which employees find information, solve complex problems, and learn how to do their work.” If an employee’s competence and good will was trusted, then knowledge would be shared. But how do you measure trust? The study identified specific behaviors and practices for managers to target to foster trust and consequently “knowledge creation and sharing”:
- Behaviors: Discretion, Consistency, Collaboration
- Practices: Shared Vision, Transparency in Decision Making, Holding People Accountable For Trust
Each of the above studies further reinforces the importance of relationship capital management, and more simply, trust. There are very immediate, tangible benefits to maximizing your organization’s relationship capital, as well as longer-term, less tangible benefits.
The Technology of Relationship Science
If relationship capital is inarguably so valuable, yet massively unexplored in most organizations, what’s the solution? It’s a sharp mental shift, but companies should treat relationship capital the same as any other business channel by focusing on development, investment, and efficiency. Once that mental shift has been made, a company can seek out technology that will modernize its approach to relationship building. Relationship Science is the embodiment of relationship capital technology.
Relationship Science (RelSci) works with corporations, financial institutions, and nonprofits to “bring science to the art of business relationships.” In its most basic form, RelSci helps organizations gain a deeper understanding of their relationships to influential decision makers. More specifically, it is a sophisticated online platform designed to help companies find, build, and cultivate connections using complex algorithms that create a very dense universe of relationship pathways.
Unsurprisingly, Neal Goldman, the founder of RelSci, explains it best. Paraphrasing from a Goldman Sachs panel he was part of in 2015, “RelSci maps the most active and influential people across multiple industries that your company would be doing business with. We then lift off an estimated social graph – who knows who, and how. This is not based on social network data — no one has to give us any info or “friend” anybody. We figure it out by aggregating and reverse engineering these relationships.”
Using the aggregated data, a company has access to all of its employees’ connections. This is a live social graph of how your company links to the entire world. If you’re looking for a connection to a specific person, you see the possibilities of all relationships to that person in seconds. These relationship pathways normally take days, if not weeks, to track down (or wouldn’t be discovered at all). RelSci is a hyper-advanced version of getting access to a bunch of C-suite Rolodexes.
How Relationships Science Strengthens Your Relationship Capital
A large part of the way RelSci strengthens your relationship capital is simply by revealing its depth and reach. Your relationship capital is Big Data you didn’t even know you had. RelSci aggregates that data for you and presents it in a format that’s easily understood and used, providing you with “warm” introductions you might not ever have taken advantage of.
Corporations use RelSci to gain intelligence on their collective relationships and reach, identify warm access points to decision makers, and manage and maintain existing clients. Nonprofits use the platform to secure major gifts from qualified donors by accessing giving history, organizations, and gift causes. Financial institutions use it to help with new client acquisition, deal sourcing, and portfolio services.
At a high level, your organization can use RelSci to:
- Determine the person, company, or industry to target
- Access tremendously detailed information sets on your target
- Reveal relationship pathways to your target
- “Wake up” all your dormant connections
(What RelSci doesn’t do is make the introductions for you. The technology is the link to the relationship, the not the relationship itself. RelSci gives you a detailed map, but you must follow the path yourself.)
Aside from revealing its power, your organization’s relationship capital is also strengthened by RelSci’s backbone of extremely detailed research and information. The purity of RelSci’s data supports and supplements your relationship capital in a unique way. Pulling from thousands of sources that are all publicly verifiable, there is no spam, no ads, and no empty, inflatable data points like LinkedIn recommendations or Facebook likes. “We’ve chosen not to be user-generated,” Goldman says. “Users can fluff anything.”
RelSci currently has 6+ million people in its database, and all are highly vetted. It profiles the most powerful players in the business world and then shows you clear, verifiable pathways to access them. The pathways between people or organizations are clear and solidly backed by verifiable facts, including everything from employers and board memberships to donations and family relationships.
To further explain, here are some specific tools your organization can leverage within the multi-faceted RelSci platform:
- Path Finder. This tool is aptly named, as it plots out connection points like landmarks on a map as you travel to a specific destination. Path Finder shows the connections between different people in an organization. You can see how your first-degree connections create new access points to the people and places you’re trying to reach, as well as see colleagues’ access points.
- Power Search. Smarten up your target list with Power Search. RelSci gives you a limitless capability to query a proprietary database of over 6 million influential decision makers in over 2 million organizations. Search by industry, school, cause, political contribution, and more to see who you, your colleagues, and extended network know. The result? A custom report that’s mapped directly to you and your organization’s relationship capital.
- Profiles. Access research-driven profiles on both companies and individuals, built from a collection of thousands of public records and updated daily. These profiles show connections, relationships, education, career history, corporate boards, donations, public holdings, awards and honors, etc. You get immediate insights on how your network (or colleague’s network) map to each person or organization profile you’re viewing.
- Discovery Tool. The Discovery Tool gives senior executives a dashboard view you’re your organization’s relationship capital. View direct relationships and extended networks across an industry, location, and role. This will help your organization make informed decisions about what markets to approach, areas to leverage expertise, and how to mitigate risk.
- 360 Alerts. It’s a constant challenge to track the activities of your prospects or customers. 360 Alerts is customizable news, pushed directly to you every day. You can get news and updates on a specific person (and all the entities that person is affiliated with) or company. The alerts also surface items of interest like stock sales, transactions, job changes, donations, and other key professional developments not typically covered by the media. These news bytes provide a reasonable and actionable way to reach out to a target.
For your organization, the first step should be to recognize and prioritize the value of relationship capital and relationship management. Despite the fact that these aspects of intellectual capital have traditionally been hard to quantify, measure, and leverage effectively, they are undeniable the most valuable asset you have. By shifting your internal organizational focus and viewing relationship capital as a business channel that should be fostered and developed, you will naturally begin to create structure around maximizing it.
RelSci is a technology platform to help you do this, at an incredibly sophisticated level. The company’s approach is to help its clients take a practical approach to their business development efforts. Close a deal. Win a client. Raise capital. Get the inside track. Whatever your goal, RelSci gives you the information you need to be successful. It is a completely revolutionary way to approach merging the art and science of business relationships.