Introduction

Power in organizations is generated by relationships ; the better the relationships, the more powerful the organization. This is true for organizational-to-organization relationships, department-to-department relationships, team relationships, and individual relationships.  Releasing the untapped power in any of these relationships improves capacity, effectiveness, and ultimately profitability.

We are defining relationship power in a very particular way. This power is neither organizational clout nor personal advantage, but a geometric leap in personal and organizational effectiveness, whose results tend to flow to the bottom line. Power in relationships, in our sense, is when the whole of the new relationship is greater than the sum of its old parts. Those new and more effective linkages tend to occur when relationships are free to develop, unconstrained by any personal or organizational barrier.

In large organizations, especially, it is easy for relationship power to become blocked or trapped. A firm’s size can have unintended consequences on such power. For full effectiveness, as an example, a middle manager might need to know critical players around the world. The sheer number of those players may be too great to develop strong working relationships. Thus the number of relationships and the organizational structure both act as barriers to developing a firm’s true productive capacity. Sometimes companies simply lack a relationship-building infrastructure. Without support systems, computer or otherwise, it may be impossible for managers to leverage the talents of employees around the world. The key point is that firms do not seek to block relationship building, but such blockage can occur as a result of size, quick growth, short-term focus, or a lack of effective communication processes and systems.

Unleashing Organization-to-Organization Relationships

A services company decided to buy its single largest competitor. The two organizations had been competing so long that there was bad blood between virtually every person, department and location in both organizations. The President of the buying company was a wise man. He understood that, while most organizations focused almost entirely on the financials to see if the merger made sense, whether or not the merger actually worked depended on how well and how quickly he could get the new and old employees working effectively together. Using outside expertise to assist with the organizational transformation, the President first determined who was not going to add value at the new company and let those people go. He then announced that no one else would be fired, which allowed employees focused on being fired at any moment to refocus on their work. To release the power of those employees remaining, he held a number of meetings first designed to integrate and align the new management team. The exercises allowed them to share their concerns, vent their frustrations, and get to know their various counterparts. At the end of these sessions, the new management group had become a high-performing team with deep trust, common goals, healthy team norms, and a common language.

The President’s plan yielded two main results. First, the President, who had been a part of many mergers and acquisitions, said that the guided intervention saved six months of productivity. The second result was that after six months, the outside experts could no longer tell which employees had come from which organizations. The integration and its attending productivity were complete. The power of the new organization had been unleashed. The company has continued to leverage its power and has grown exponentially.

Unleashing Departmental Relationships

There is a manufacturing company at which there was once major friction between Sales and Manufacturing. Manufacturing believed that Sales over promised on delivery to get the sale and Sales could not understand why manufacturing wasn’t hitting the delivery dates promised to the firm’s customers. Sales wanted to know why Manufacturing wasn’t more responsive to the customers who paid their salaries.

What finally unleashed the departments’ relationship power was a well-designed study that determined the firm’s critical customers’ expectations regarding product delivery. Manufacturing had argued that the customers were looking for deliveries in one to three weeks, which had been an industry delivery benchmark for decades. But when the study came back, customers said that they were expecting shipments in one to three days. There was clearly a performance gap that was undermining both internal and external relationships.

In this case, objectively gathered customer delivery expectations unblocked the power in the Sales-Manufacturing relationship, as well as that in the relationships between the manufacturer and its customers. As soon as those in Manufacturing saw that their basic assumptions were incorrect, they worked with Sales to hit the expected delivery times. Over the next six months, as Manufacturing tooled up, the new data created a 20% leap in Sales and a similar boost in manufacturing.

But the relationship power unleashed did not stop there. Relationships between individuals in the two departments improved because successfully working together on projects minimized turf issues.  The two functions worked together to improve other processes that flowed between manufacturing and sales—pricing, for example, line utilization, and internal and customer communication.

Unleashing the power of relationships is a little like dropping a stone in a lake. The ripples (positive energy) from where the stone hits spread out across the whole lake (the relationships through which the firm does business). Thus we see that unleashing the power of one department-to-department relationship can positively impact business relationships at multiple levels, from individual to organizational. The incremental revenue generated showed that the power unleashed was far from “soft stuff.” If organizations become aware of their potential relationship power and can start to unleash it, they can dramatically improve individual, group, and organizational performance.

Many decisions makers still see relationship development as a “soft issue.” The real question is: What level of productivity/profit are you currently losing through blocked relationships at the organizational, departmental, team, and individual levels? If you can name any losses, you can bet that there are more that you do not know about.

Unleashing Team Relationships

In virtually every organization, teams work together, usually for a common goal. These teams’ effectiveness depends on such things as: leadership, role and goal clarity, trust levels, and processes for both decision-making and conflict resolution. 

At a financial services firm we know, the strategic direction of the company changed so dramatically that one division that had been a minor player suddenly became the division spearheading the new strategy. Reaching the strategic goal thus became the priority of the new six-member divisional management team. Turning this new group of managers into a high-performing team became an organizational priority, especially since bad blood had developed among some team members over the years.

To create such a team and to achieve the strategic objective, the new executives had to reboot minds, develop deeper member relationships, create an effective team and then leverage that team into an effective division. The new divisional executive created a systematic approach to cultivate trust among her executive team—all at the Director level.

There are many ways to unleash the power of relationships, from greater appreciation of different personality types and effective coaching, to effective measurements around which to align the organization. The key point is that there are ways to dramatically improve organizational performance. Too few firms are taking advantage of this opportunity.

Unleashing Individual Relationships

As Tom Peters once said, “All purchase decisions, all repurchase decisions, hinge, ultimately, on conversations and relationships…. All dealings are personal dealings in the end. ”

There was a manufacturing project manager with many skills that the firm did not want to lose. On the other hand, this man’s total inability to relate well with others led to overly adversarial relationships with suppliers and people within his own organization. His lack of people skills caused projects to be completed late and over budget. In several cases, suppliers and contractors this person had treated adversarially sued the manufacturer and were awarded large settlements.

The critical individual relationship in this case was between the project manager and the firm President, who failed to hold the project manager accountable for his behavior. The project manager needed coaching, better direct management, or even a position, which might make better use of his technical skills. But none of those approaches was suggested and the organization continued to use the project manager on very large capital-intensive projects, fraught with huge potential losses.

In this case the individual relationships were not unleashed because the President refused to move the project manager and the project manager proved to be incapable of coaching from executives below the President. We wish we could say this was an exceedingly isolated incident but there are many cases of firms unwilling to move on an employee who has essentially leashed major relationships inside and outside his organization. Without the will to make changes, an organization can easily fall into this type of regressive thinking—the notion that doing the same thing again and again will somehow lead to different results.

Conclusion

We return to a question we asked earlier: What level of productivity/profit are you currently losing through blocked relationships at the organizational, departmental, team, and individual levels? Your firm probably makes continual capital investments—in IT, in building maintenance, in raw materials, perhaps in manufacturing components. Yet one of the least-capital intensive ways in which you might bring more to your bottom line is by identifying and unleashing relationship power throughout your organization. Not unleashing that power is akin to hosing down a car while the hose is crimped: it doesn’t work very well. There are systematic ways to uncrimp the hose and unleash the power of those relationships.  Unleashing the power of all your critical business relationships will give you the ultimate sustainable, competitive advantage.

© S4 Consulting