How the Relationship Equity Formula Helps Your Business

When you open up a new bank account, you need to deposit money into the account.

Imagine, then, that you made withdrawal after withdrawal from that account – without depositing any more money into it.

Then one day, you go to the ATM to take more cash out, and a message pops up: INSUFFICIENT FUNDS.

It’s not rocket science. When you take more from your bank account than you put in, you’ll be left with a zero or negative balance. It really doesn’t make any sense, but people do this all the time with their money.

What I’ve noticed is that we often operate like this in today’s business environment as well.

I often see more withdrawals than deposits in business relationships. As a result, deals stall. Prospects go cold and go radio silent. Negotiations sour.

What if there was a similarity between the way a bank account operates and how relationships work? 

It turns out there is.

There is a formula to how relationships can be developed and nurtured that can open doors that you didn’t even realize were there.

One meaningful relationship, where you’ve successfully built relationship equity, can change the trajectory of your life. 

The Importance of Relationships in Business is Overlooked

Social media channels have opened up the floodgates when it comes to connecting with people from all over the globe. You now have access to key influencers, leaders, prospects at your fingertips.

However, with the good comes the NOT SO GOOD.

What was once an avenue to connect and begin a relationship has become a race to the finish line before the race has even begun.

A lot of noise comes with the way society deems acceptable forms of communicating and relationship building for that matter. Hidden agendas come to surface on why you really reached out.

Quite frankly, standards have fallen and the importance of building real relationships has become an afterthought.

What exactly do we mean when we talk about “relationship”?

One definition of relationship could be the connection point between two individuals that have some commonality and is bidirectional (two-way), where value is exchanged. 

Relationships are crucial on how you do business; no one argues this fact.

However, how you decidedly go about building those relationships is another matter altogether. Especially, for those in the business of healthcare...trust is a big issue.

For instance, the lack of relationship equity can make or break sales process, strategic partnerships, technology implementation projects, diminish employee productivity, lessen patient engagement and impact other important initiatives.

Relationship equity isn’t just about making a sale. It applies to every single facet of human interaction. Try deploying a solution to clinicians without having any relationship equity. What do you think will happen? Exactly, nothing.

The Relationship Equity Formula in a Nutshell

The Relationship Equity Formula is a set of easy to apply connection principles that break barriers of race, ethnicity, and religion. It’s about human to human connections for the greater good of society.

The Relationship Equity Formula is quite simple. If you were going to outline it as an algebra equation, it would look like this:

Connection x Authenticity = Trust

Trust x Time = Relationship 

Relationship x Value = Equity 

In other words, the stronger the relationship you have built, along with the value you have provided in business, the more “equity” you have developed. This equity translates in the real world into bottom line impacting tangibles such as partnerships, business deals, and referrals.

Notice that our Relationship Equity Formula isn’t just about addition, but multiplication. Your efforts aren’t just doubled, they compound over time, which means that efforts could be tripled, quadrupled or even 100X’d!

Let’s take a look at each element of the Relationship Equity Formula:

1. Trust

How do you build trust? You guessed it...there’s a formula for that too.

Trust = Connection x Authenticity 

Connection is about finding common ground with someone else. It can be in a myriad of ways. You can talk about kids, hobbies, interests – you name it.

Combine that with authenticity and you have a foundation to build up from.

Authenticity is about being real. Don’t be fake or try too hard.

This goes hand-in-hand with honesty. Keep your promises. A lack of honesty and authenticity will definitely have an adverse effect on your reputation with decision-makers.

2. Time

This is an old relationship truism: If you value your relationships, you need to invest time into them. Invest in them regularly and consistently. 

For example, when a client comes in for a meeting, don’t just rush them out the door as quickly as possible.

Of course, you don’t want to waste their time by dragging things out. But give some space and time so they feel that their questions and concerns are answered.

3. Relationship

Remember, Trust x Time = Relationship.

So, if you develop trust and invest the time, you now have a relationship with someone (a positive one). Let’s now see how this relates to our next formula:

Relationship x Value = Equity 

4. Value

Let’s return to the very simple example of not rushing a meeting with a client. You provide the time and space to answer the client’s questions and concerns. But you also need to add value.

You could be the nicest person in the world, but if your answers to the client’s questions aren’t helpful or accurate, you have not provided any value.

Value is something you can develop by improving your knowledge and finding out more about what the client wants and needs.

5. Equity

When we talk relationship equity, we are talking about the long-term value of the relationship. Using the banking metaphor, the equity in your relationship is the positive value of the relationship minus any “liabilities.”

Perhaps a personal example will best illustrate this. Let’s say you are dating a potential new partner. Their positive traits include friendliness, openness, and attractiveness. Their negative traits include being consistently late and argumentativeness.

A relationship with this person potentially has a lot of plusses – you have fun, and you find your partner attractive. However, if the minuses outweigh the plusses – your date simply argues too much – then you are likely to end the relationship.

That is a relationship that has low equity.

In fact, your relationship equity is something you can draw on to make things happen. Let’s say you have developed positive relationship equity with a client. There might be a time when you have to raise your rates; that relationship equity will go a long way toward your client accepting your higher fees.

The Bond Between Relationship Equity and Healthcare Innovation

There's a strong bond between the relationship equity formula and healthcare innovation. Especially when it comes to the current speed of adoption within healthcare. It has everything to do with technology utilization, new leadership initiatives, workflow improvements and how providers engage with patients across various healthcare settings. 

Research tells us that as you focus on adding value and building relationship equity, you will actually enjoy your business relationships more. Instead of meetings being chores, they can be opportunities to explore and grow. Your projects will be more successful, your clients will be happier, you will engage with your patients at a deeper level and your business will thrive.

Final Thoughts

Forget about cryptocurrencies. Moving ahead, the currency of the future is relationship equity.

Let there be no hidden agendas. It’s no longer about taking. Think “give first and ask later.” Start by asking yourself: “Who can I add value to today and how?”

How do you go about building relationship equity in your business?

It would be great to see comments and examples below that others can leverage.