Value of a Firm in Transition Can Hinge on Relationships

From the August 1, 2003 print edition
Transition Issues

This is the third of an eight-part series on business transition issues.

Ever wonder why one of the most difficult tasks of senior management is to achieve consistently high performance from their people?

Getting top performance is possible, but it takes a lot more than “common sense” management or simply applying the latest management tools. That is because most of us, although possibly schooled in business concepts, fail to understand the power of relationships.

People aren’t merely a component in our complicated business machine — they are the very engine! When we fail to understand the power of this engine, no management or leadership method alone can deliver the kind of results we desire.

The performance driver: Relationships create the conduit for great business results. Relationships have more potential impact on performance than any other leadership issue. Building effective team skills unleashes vast performance potential, which is dependent on relationship skills. I do a lot of work with family businesses; 60 percent of family business breakdowns arise from “how we get along.”

Bad relationships rank as the greatest threat to business performance as well as longevity. That’s why we must address this important issue as a part of a business transition strategy.

Social skills support the ability to organize groups, negotiate solutions, have empathy and create rapport. People who possess these skills can connect with people quite smoothly, be astute in reading the reactions and feelings, lead and organize, and handle the disputes that are bound to flare up in any human interaction.

A high level of social competence is necessary to create a level of comfort, support and enthusiasm. Casey Stengel, the amazin’ New York Yankees manager, provides us a keen insight into the importance of relationship skills. He said “it is easy to find the stars; the difficulty is to get them to play together.”

That is true in business as well.

Creating an awareness and appreciation individually for the importance of positive relationship skills is a crucial beginning point. This is part culture, part learning, part leadership, part team development — actually it is pervasive in the development of a high-performance organization. Look at world-class sports teams, as well as businesses that are creating world-class results. There are exceptions, but in most exceptional performances, you will find exceptionally high levels of mutual commitment among the individual participants.

It is this kind of commitment that management-leaders want to examine to see if the same kind of relationships, which not only support superior performance but actually fuel it, can be replicated.

Applying emotional intelligence: The fundamental task of leaders is to prime good feelings in those they lead. A leader creates resonance — a reservoir of positivity that frees the best in people. Behavioral scientists are now describing relationship skills as emotional intelligence. Psychologists are telling us that, unlike IQ, EI can be developed. With relationship skills now being the most sought-after of the leadership skills, this is indeed great news.

When people feel good, they work at their best. Great leaders work through the emotions. A great leader’s success depends on his or her use of emotional intelligence. The leader acts as the group’s emotional guide. The boss creates the conditions that directly determine people’s ability to work well together.

It’s our task as leaders to help our colleagues “feel good” about what they are doing. Then they will commit their highest levels of performance to the work at hand. The quality of relationships has a significant impact on business performance short term and long term, making it an essential component of effective business transitions.

What are you doing to improve relationships?

Hal Johnson has been CEO of eight companies and has authored two books on mentoring business performance. He is chairman and CEO of LeadershipONE, a business transition consulting firm. He may be reached at (916) 391-3042 or at [email protected].

© 2003 American City Business Journals Inc.