relationship economics

 
August 19th, 2013

To Improve Mergers & Acquisition Success Rate, Align Strategic Relationships

According to authors Chip and Dan Heath, authors of Decisive: How to Make Better Decisions in Life and Work, over 80 percent of merger and acquisition decisions end in failure. There’s been a lot of discussion about why that is. I believe that one primary factor contributes to this monumental waste: lack of strategic relationship alignment. We must change the compensation and culture of M&A deals to reward focus on relationships – before, during, and after the transaction!

To get a clear picture of how a lack of focus on strategic relationships harms M&A outcomes, consider the example of two companies with different distribution models. Company A, which sells predominantly via a direct sales force, buys Company B, which sells through channel partners. It’s easy to see that sales management is going to need to resolve that conflict once the acquisition takes place. What’s more difficult to see is the relationship conflicts that will ensue. Company A has a relationship with end customers. Acquired Company B is limited to relationships with distributors. Their distributors have relationship with end customers. Blending those two company’s customer relationships into a harmonious new status quo will not come easily, as neither company has experience with the new type of relationships required. Without conscientious attention to strategic relationship alignment, a rough road lies ahead.

Three Stages of Relationship Alignment

Few dealmakers look at relationship alignment in the pre-acquisition due diligence phase, or during the post-acquisition integration phase. And yet, unless three stages of relationship alignment are executed well, that M&A initiative is likely to join the 80 percent that fail. Here are the three stages: Read the rest of this entry »

August 19th, 2013

Stop Wasting Time on Wrong Relationships

Originally published in the Atlanta Business Chronicle on Aug. 16, 2013

It’s the end of the workday — again. And again you’re asking, “What did I really get done today?”

Your to-do list is no shorter. In fact, it’s longer than this morning because of the obligatory tasks spawned by the day’s interactions.

You know this territory. Every contact leads to a forest of follow-ups. Someone has made an introduction you now need to call, or a potential new contact wants to meet you for coffee, or a media contact has asked you for a fact sheet about your new product launch, or a between-jobs past acquaintance wants you to put in a good word with a new colleague. Read the rest of this entry »

August 19th, 2013

Don’t Wait ’til You See God Before You Grab the Brakes!

A couple of weekends ago I had a great experience at the Schwantz School held at the Indianapolis Motor Speedway. Kevin Schwantz, who runs this school for motorcycle drivers, was a legend in the motorcycle racing world back in the 1980s and ’90s. If you watch any of his race videos on YouTube, you’ll see that he raced only one way—to win. When he made his move for a pass the world held its breath.

One of the sessions at the school was focused on effective braking. I loved a quote that was shared in the class: “Don’t wait ‘til you see God before you grab the brakes!” Which means, don’t wait so long that you’re on the brink of disaster before you take appropriate and relevant action—in this case, slowing the bike down a straightaway for an upcoming turn. Read the rest of this entry »

August 16th, 2013

To Fuel Personal and Professional Growth, Network Strategically

Do you feel like networking is not working for you?  As a recognized thought leader on Relationship Economics—the quantifiable value of business relationship—that’s a complaint I hear frequently. I’m glad Heinrich Greve addressed it recently in his post on Strategy+Business, Is Networking Good for Business? Yes, But Not Always How You Expect.

I agree with what Greve wrote—as far as it went. He offers a framework for individual and organizational relationships. But he fails to offer a roadmap with a clear route to make networking pay a quantifiable return for your investment of time and energy. I’ll step up to offer just that. Read the rest of this entry »

August 14th, 2013

10 Tips to Improve Your Newsletter

Most people unsubscribe from a newsletter because they don’t perceive it to be of value! A friend recently sent me one and as an investment in our relationship, I simply replied back with the following 10 suggestions. Thought this list may be of interest to a broader audience.

  1. Make the newsletter personable by adding a note at the top; keep it short – great value in brevity!
  2. We’re a visual society, so create powerful visual impressions. Less verbiage, more white space, great images.
  3. Inspect what you expect. How do you know if anyone reads what you’re writing. Use a back end tool to see who is reading your ideas. Prioritize those topics next month. Dispense with the fluff.
  4. Get the formatting right; broad base of browser users, people who simply forward the email, those who want to see it as a URL. Cater to as broad base of an audience (visually) as possible.
  5. Write for the consumers of the information, not you as the producer of it. Read: less about you and more about how they’re better off because of you!
  6. Multimodality is always great; find ways to insert videos or a podcast. Share a presentation or an image that captures their emotions, not just their minds.
  7. Use consistent iconography. Ideally your newsletter looks or feels like your website / brand / window to the world.
  8. Create Tweetable moments. People online are browsers, not readers. Give them what they need with the option to read more.
  9. Deliver contextually relevancy. Help your readers relate to peers who have had similar challenges you’ve been able to address. STAR format works well – Situation, Tactics, Action, Results.
  10. Don’t put all of your eggs in one basket. Even with the above tips, you may still get a low open / read rate. So create other avenues to deliver value – write for print publications; post insights on various social outlets.

Above all, have a unique point of view and deliver it with conviction! If they get value from what you send, they’ll stay with you.

August 14th, 2013

To Command Price for Value, Educate Buyers

I received a call the other day from a meeting planner. “I heard you speak three years ago, it was one of the best speeches I’ve ever heard, I’ve read your book, I agree with your thinking, you’re a great fit for our group…” At some point I got a word in edgewise. I asked, “Who has spoken at your event in the past?” My yellow flag went up when I heard names I didn’t recognize. Then I asked for the budget range for past keynote speeches. The red flag went up when the caller said, “$500!”

I’ve been musing since that brief phone interchange because it struck me that here, once again, was an uneducated buyer, ripe for misalignment of expectations about price.

Uneducated buyers desire steak but want to pay taco prices. Even people who understand the relationship of price to value when they’re shopping for a product or service seem to fail to apply that knowledge when they’re searching for a relationship.

Those of us who sell the value between our ears are really at risk of this kind of misalignment of expectations. I have devoted 10 years to research into strategic relationships; I’ve written four commercial books; I deliver 50 to 60 speeches a year. Clients are paying for that knowledge, that experience, that practice that has led to world-class delivery when I’m at the podium. And you think $500 is a fair price for that?

If our buyers are uneducated when they reach out to buy something, anything—a meal, a machine, a keynote speaker—they are at risk of potential misalignment on perceived value. We all must recognize this. Before we undertake to deliver something—our time and expertise, our products and services—we must work to educate our buyers, diligently, throughout our engagement process.

Traditional advertising and marketing are rapidly losing their effectiveness. This creates a need for buyer education through other channels. The latest Global Trust in Advertising research report from Nielsen (released in spring 2012) found that 92 percent of global consumers trust recommendations from people they know, compared to under 50 percent trust in advertising. And that 50 percent has fallen by roughly 25 percent over the previous two years. You can see where that trend is headed, right? Read the rest of this entry »