How Good Are Your Relationships?

I've not posted in a long time, nearly a year. Not through laziness, or because I've not wanted to. Conversely it's been one of the most interesting, fascinating and stimulating 12 months of my career, sadly given the privileged, confidential and high stakes nature of what I have been doing, I simply cannot really talk about what I am doing at present.

However, it strikes me that if there is one thing I definitely can discuss it is: relationships.

Relationships are what our lives are built upon; family, society, business. From the moment we're born until we die we rely on relationships to see us through much of our life.

Whilst work has been getting heated over the past 12 months I've given over a lot of time to thinking about what makes a good relationship and what makes a bad one.

Power dynamics in business can often make for uneven relationships; employer (company) to employee, or client to service provider are two examples of a dynamic which can lead to uneven outcomes if not viewed through the proper lens.

For example, employer/employee relationships can be heavily influenced by market dynamics: an employee can get hired at a time when their skill set is in short supply and thus they can have greater demand over the cost of their skills, but markets are never static. What happens to that same employee when a few months or years on and their skill set is in less demand or the market has moved such that the skills are no longer as rare as they were?

In truth, much as we may put a corporate spin on relationships when we talk about "long term partnerships" there is inevitably a portion of any business relationship which is purely transactional: you give me money and I perform in a certain desired way in exchange for the cash.

And these relationships are hard to ascribe a value too: generally as long as they are working for everyone, nobody is really too keen to scrutinise them too deeply. They are BAU for want of a better term.

But they are still based upon human interactions. We are more inclined to work with people who's company we enjoy, whom we find commonality with, whom we find accessible. And that's ok. The world has ever been thus.

But are those relationships "good"? Hard to say they're "bad". They work, they seem to be performing. But are they good?

Let's look at client and service provider for a moment. Too often this dynamic can fall foul of some toxicity. For example, rarely is there zero pressure on the client to deliver the service required at the cost that the service provider charges for it. There is always pressure to deliver it at lower cost: lower costs increase chances of profit. Rarely is this something that the client will internalise, and shield the service provider from. All too often there is pressure around various factors associated with the service. If it's provided on an hourly rate, that gets driven down. If it is being bought by a massive company from a relatively small one, that can drastically influence the dynamic: scale.

But again, do these factors make the relationship good or bad? I guess ultimately the answer is: it depends. And that's true. Not all massive purchasers of services pursue those services in negative or toxic ways. I have also seen service providers fight back, such that what the purchaser thought was a win through rate reductions ended up being no advantage as the service provider just worked around their criteria to ensure that they were paid what they needed to be paid for the job at hand. So was that a good relationship? I think both parties at the time would have classified it as such, but in my view it wasn't. It lacked the one true critical factor to make a relationship a good one: honesty.

And too often this is missing in a lot of business relationships. This is not to say that all business transactions are inherently dishonest. They are not. Usually they're transacted through a framework, and maybe the framework just hasn't been thought out properly.

Honesty is critical if any relationship is to survive and thrive beyond the transactional nature of most relationships. More often than not everyone in the transaction is too scared of the negative consequences of honesty to engage with it. There is usually too much at stake to make honesty feel like the right path.

Additionally, once something gets disrupted and BAU becomes business as unusual how do both parties navigate through that without honesty? "This isn't working for me". That should be an ok thing for both parties in any transaction to say. But too often one is too afraid to say it when the consequence could be not having that relationship at all.

I have also seen a number of relationships tested sometimes to breaking point this past year. A relationship I have had for over 20 years with one of the first people to ever buy me lunch when I joined the insurance market, and one of the few people who remained in touch with me whilst I was out of work said to me recently when we had to have a really tough conversation about the relationship of our firms "I hope we can get the relationship back to a good place"... and it pained me to point out "our relationship is, I hope in a good place, this rough patch will show us how good. Ultimately we've been lucky enough to have an untested relationship. We now find out how good it is".

Finally, I am not advocating that you go out and stress test all of your relationships. That would be madness. Relationships are undoubtedly built in the good times, but be wary of adding layers of stress to relationships in these times. Instead focus on building up capital for the bad times, because whether it takes a matter of months or years, those bad times will come and how you treated each other when times were good will be what sees you through.