Accounting For Your Relationships
Peter Drucker is famously misquoted as saying “What gets measured, gets improved.” The principle is solid, but he realised that there are nuanced aspects such as enthusiasm and alignment that can’t be easily measured or defined but should nevertheless be taken into account.
In business we often measure value. What is the return on investment? Which are our key performance indicators? What is the lifetime value of this customer relationship?
Relationships are medium to long term investments and shouldn’t be measured on the basis of individual transactions, but like a financial investment it’s worth checking in on each relationship regularly see if it’s trending up or down. You should remember to measure the value you’re contributing to each relationship as well as the value you receive.
How do we measure the value we are creating and receiving in our personal and professional relationships?
Things a relationship balance sheet could take into account:
Finances: Are you adding or subtracting value here?
Time: Are all the parties in this relationship dedicating an equivalent amount of time, or is there an imbalance?
Responsibility: Andrew Sloan writes about responsibility here. Responsibility always works two ways and when one party assumes ‘too much’ responsibility they may be robbing the other of the personal power that comes with owning their place in the partnership. Is there a balance between the responsibility you own and the empowerment you offer?
Energy: Do you add or subtract energy from this relationship? How do your interactions with the other party leave you feeling?
Status/Prestige: Do you contribute and/or benefit from the social implications of this relationship? Does this partnership inform how you see yourself or are seen in the eyes of others? Does it offer networks or opportunities that you might not otherwise be able to access?
How does each relationship look when you think about it as a whole?
Is it a good investment of your time and resources?
If you ignore the time and energy you’ve already invested as sunk costs, does the snapshot you take today represent this relationship in a positive light?
Without being purely transactional (if I give you A, I’ll expect B in return), in what ways can you add more value to this relationship? What should you consider asking for to make sure you get what you’re looking for?
Are there other things you think a relationship balance sheet should account for? Let me know here.