Relationship-Centered Organization
What is the Relationship-Centered Organization?
Since people have come together to form organizations, an intangible, abstract entity has been observed. Within companies, schools, hospitals, agencies, or any form of organization, it has been called many things—the core, the heart, the DNA, or even the soul. Like gravity, you can’t see it or touch it. But also like gravity, you can observe and feel it. It is thought to be the hidden logic behind why organizations behave in the distinctively unique ways they do, for the good and the bad. While called many things, one word gets the most press: culture.
Organizational culture is discussed extensively in business literature, and many people have defined it and suggested what you can do to affect it. But until now, there has not been a good theory as to why it exists or how an organization can understand it most effectively to harness an unlimited supply of energy and position your organization to create infinite value.
What is an RCO?
While definitions of organizational culture vary, most center on it being a set of shared beliefs and attitudes that shape an organization. Notice how such definitions give human qualities to an abstract entity like culture. But again, explanations only go so far. In search of exponentially higher value, the Relationship-Centered Organization examines why organizational cultures exist, where they come from, and how to better understand them.
Let’s start from the beginning.
The Genesis of Culture
An organization’s culture doesn’t just materialize, and it isn’t random. It is a reflection of human behavior, which is why it is often defined using human traits. More specifically, culture is an echo of all the interactions and relationships between any people having anything to do with the organization, past or present.
To illustrate, consider this short story:
Jill started a business with a good product. In a short time, she built solid working relationships with key customers and suppliers, and they gave her feedback on ways to improve. Even as an organization of just one, these relationships shaped a culture based on listening and innovation. As the organization grew, she hired a team—John for Process Implementation and Tom for Sales and Marketing.
Jill encouraged Tom to listen to customers and anticipate their needs. Tom did this well, but John was not ready for his disruptive ideas while setting efficient processes. Jill liked John because he had an ability to organize things very well, so she often got what he needed. However, because of the pushback, Tom stopped bringing ideas to John, and customers learned it was a waste of time to bring concerns to Tom. Gradually, the culture morphed and was no longer based on listening and innovation. The point of the story is that the culture changed, not at the fault of any one person, but as a direct result of the relationships between people. The change in culture was not predicted—but could have been.
Bottom line: Relationships are the ultimate lever to evolving culture.
Definition of Relationship
In a general sense, the term relationship can refer to the nature of a connection between two or more concepts, objects,
or people. However, in the context of this paper, the term is expressly about the connection between people. And not just
any personal human relationship, but those that have an organizational (or business) reason for the relationship. Such an organizational setting implies an expectation of creating value or producing results of some kind; therefore, the need for people in the relationship to communicate and do things together is implicit. Consequently, in the scope of this paper:
Relationship: The state of connectedness between two or more people which dictates the manner in which they interact, communicate, and behave with each other in pursuit of a shared organizational purpose.
Culture is the Energy Source
But why are work relationships so powerful? And how are they able to change the course of an
entire organization? Try this thought exercise:
Take a moment and think about the best work relationship you ever had. Picture that person in your mind. Think about what you accomplished together, the fun you had, and the creative sharing and mutual growth. Let’s call that wonderful relationship your “R.” Now, imagine that same kind of relationship existed between you and everyone in your immediate team. What could you get done? Now, imagine that between everyone who has anything to do with your organization. Would the value potential of your organization be limitless, or even infinite?
When you think of your R, I bet you feel highly motivated. Accomplishment, joy, learning and helping others are motivating. In short, great relationships are motivating to all people involved, and that kind of motivation unlocks a unique creative ability. This is the power of great work relationships.
Bottom line: Work relationships serve as the primary energy source that fuels culture.
The Infinite Potential
If more motivating Rs are the energy source that fuels value, how can the tank be kept full with good fuel? The Relationship-Centered Organization defines that guidance as Purpose. But what is the secret behind a good Purpose? Passion! People interested in their organization’s Purpose are passionate. For employees, it isn’t just a job. It is something they believe in. Passionate employees are more engaged and productive. Most importantly, a strong Purpose gives context, stability and consistency for great, enduring work relationships. And, the more relationships that develop into great ones, the energy to create value skyrockets. When you consider how many opportunities every organization has for great relationships between everyone having anything to do with an organization, the potential energy source to create value is limitless.
Bottom line: Purpose sets the context for so many effective work relationships that the energy supply to create value has unlimited potential.
The Relationship-Centered Organization
The Relationship-Centered Organization. Traditional organization models view work relationships as a necessary requirement to get the job done. As a result, the number of Rs is small and the value potential of such an organization is finite. A Relationship-Centered Organization turns the traditional system on its head. Instead of viewing the product as the core focus, it places purposeful relationships at the center, knowing that the product will come in massive quantity and higher quality as the proportion of Rs go up. Work relationships require four basic things to lay the foundation to become Rs: Context, Relationship Abilities (DNA), the right Mindset, and the willingness to share useful Knowledge.
The Context of Rs
Remember your R, your best-ever work relationship? Ask yourself, what was the underlying purpose for it. Did that foundation light a fire inside you?
Most effective work relationships are built on something that excites passion. All organizations are perceived by the world and their employees by their Purpose and their performance around a few key factors. To a relationship-centered organization, these factors create a positive perception of purposeful results. They can also be used as a way to set deeper context of work relationships linking organization Purpose to individual Purpose:
These factors provide context for great work relationships. Relationships may change over time, but mutual respect of all the factors will lay a solid foundation for work relationships.
The Human Factor
The recognition of an individual’s imagination and creative gifts.
The Brand Factor
The opportunity to take pride in an organization and its Purpose.
The Innovation Factor
The freedom for discovery of new sources of value and creativity.
The Technology Factor
The ability to solve problems and issues that really matter.
The Infinite Factor
The chance to belong to something that provides lasting, meaningful value.
The DNA of Rs
Once again, think back on your R. What traits or skills did you bring to the table that helped Develop, Nurture, and Advance (DNA) that relationship? What traits did the other person bring? More than likely, things like cooperation, empathy, and communication come to mind. So, how do relationships Develop, Nurture, and Advance into Rs on an organizational scale?
| Consider a team of people building a house. Assume everyone has technical skills that allow them to swing a hammer, read blueprints, or take accurate measurements. These are required functional skills. But hopefully, they also possess another skillset. A skillset that allows them to communicate, express an idea, or understand the needs of their teammates. In the end, these relationship skills are equally important. If nobody communicated or listened, the house would never get built. |
A traditional organization tends to focus on functional skills and sees relationship skills as “nice-to-have.” In contrast, a Relationship-Centered Organization gives equal attention to relationship skills and functional skills.
The Mindset of Rs
When you think about your R, what attitude did you take at first? Was there a teacher-student or leader-follower dynamic? How did it change as time went on? In a true R relationship, individuals invest in each other. They become partners. Partners bring a different mindset to relationships that is unencumbered by rank or perceived importance. Consider the following four archetypes of excellent partnering mindsets:
Connector
Connectors help by expanding their partner’s network of people and ideas.
Cultivator
Cultivators encourage trust, which makes ideas flow freely.
Explorer
Explorers collaborate in an environment of openness and innovation.
Investor
Investors share ownership in the risks and results with their partners.
Purposeful context, relationship-building DNA, and Partnering Mindsets: These things set the foundation for effective relationships that create the energy supply to drive value. A Relationship-Centered Organization invests in them through a critical organizational capability, one that exists in all organizations to one extent or another: A Business Relationship Management Capability.
The Knowledge-Sharing of Rs
Think about your R yet again. What knowledge or experiences did your partner share with you? What did you share with your partner? Did the exchange of knowledge help nurture the relationship?
A strong R relationship depends on the willingness of each party to share their individual knowledge for the betterment of the relationship. Traditional organizations struggle with this need for willingness, wondering why people cling tightly to what they know and often shield it from others. Perhaps such organizations reward acts of individual heroism. They unconsciously give every incentive to individuals to try to stand out from everyone else by what they have between their ears rather than the number of R relationships they are in. In contrast, a Relationship-Centered Organization recognizes R relationships are the ultimate incentive. The rewards of such relationships are immeasurable to the individuals involved in them, so the focus is on developing, nurturing, and advancing such relationships.
What words come to mind when you think about the knowledge either you or your partner provided during your R relationship? Enthusiasm? Conviction? Confidence? Delight? There is good reason why sharing knowledge in a R relationship is so pleasurable: there is much joy in giving and receiving, especially with people you have great relationships with. Think about how great you feel to get an unexpected gift from someone you care about. Or think about how great it feels when someone sincerely acknowledges a gift from you. Your knowledge is a gift to a strong work relationship, and so is your partners. When acknowledged with sincerity, the relationship strengthens while creating value and spreading knowledge at the same time.
Business Relationship Management Capability
Redefining Value: The Triple Bottom Line
The good news is that within the Relationship-Centered Organization System, Business Relationship Management is a well-defined organizational capability with a clear mission, processes, roles and responsibilities, and metrics that can be summarized succinctly into evolve culture, build partnerships, and drive value. Culture is evolved through the creation and improvement of partnering relationships. Increasing the proportion and quality of great relationships provides an unlimited energy source to drive value. Not just value for the next quarter or next year, but infinite value by expanding the bottom line into the triple bottom line: people, purpose and planet.
People
Organizations have a responsibility to empower their people to become their best selves. All organizational activities begin and end with people. Hence, without people and relationships, organizations cannot drive value. A motivated workforce allows organizations to tap into their infinite source of creativity and innovation, which sets the stage for driving infinite value.
Importantly, organizations can motivate their people by supporting individual goals and fostering an environment of collaboration, compassion, and continuous learning. In doing so, people feel safe to bring their authentic selves to work, which opens communication channels. A culture of effective communication gives employees a voice which leads to enhanced morale and satisfaction.
A truly people-centered organization promotes diversity and uses difficult conversations to break down walls between people, unleashing the value of authentic relationships. By recognizing the humanity behind their people, organizations can cater to individual needs and empower them to share their unique value.
Purpose
Organizations must know why they exist and let that drive their actions. Every organization exists to satisfy a purpose and fulfill a mission. When enough people believe in that mission, the shared purpose becomes exponentially more powerful. For example, BBVA is leveraging technology to enhance collaboration among all of its partners, both internal and external. Leadership engaged thousands of employees to define their organizational purpose and create a new tagline: Creating Opportunities. They aim to create opportunities and promote trust by assuring transparency with customers and motivating employees to develop innovative solutions to satisfy purpose.
Furthermore, purpose does not come at the expense of profit. In fact, purposeful organizations enjoy higher profitability, earning financial returns ten times higher than the S&P 500. Thus, profit is not forgotten by the triple bottom line, but rather enhanced and used for the organization to continually work towards satisfying its purpose and ensuring its longevity.
Planet
Organizations hold a responsibility to protect the planet, to which they owe their existence.
In 2018, the Intergovernmental Panel on Climate Change warned humanity has twelve years to mitigate (not prevent) the substantial consequences climate change will have on the world. Some reports view an even narrower window for action, with massive governmental and organizational overhauls necessary before 2021. The effects of climate change are already being felt across the world, and it can no longer be ignored by organizations that want to exist long-term. After all, organizations cannot satisfy their purpose on a planet inhospitable to human life.
If ever there were a time for organizations to serve their purpose, that time would be now. That purpose becomes safeguarding a future where the planet can sustain life, which includes and is majorly affected by people.
Consequently, employees, customers, and investors demand more sustainable organizations to promote the health of the planet, and many organizations are answering the call. For example, there are over 2,500 certified B Corporations*, and the list of these evolutionary organizations is growing.
*B Corporations are defined as, “businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose”. B Corporations represent a growing number of organizations that recognize and strive to satisfy a triple bottom line.
Organizations that recognize they exist as a part of the greater whole are those best positioned for prosperity and sustainability. With finite resources and endless capitalistic competition (which falsely assumes infinite planetary resources), eventually, our resources will run out. On the other hand, organizations have the impactful opportunity to combine their relationship networks for mutual benefit and planetary sustainability. By adopting a global collaborative mindset, they position themselves to drive value long into a future where they can continue to thrive.
The core message of the triple bottom line is that investing in relationships provides a return of infinite proportion back to the organization and its longevity
The Evolution of Organizations
This makes way for a new type of organization, one using a Relationship-Centered Organization System.
Organization systems of the industrial ages like Taylorism valued efficiency above all things, resulting in a machine-like culture in which work relationships were expected to be a product of top-down direction and often led to the formation of silos. More recent organization systems try to break down the silos with the formation of more autonomous teams. While more malleable, such organizations still carry forward a finite perspective of value with an inward focus of creating product and profit. Relationship-Centered Organizations understand the incredible power inherent in the creative human mind and the need for human relationships to supercharge and distribute that power. Relationship-Centered Organizations advance your business relationship management capability and are focused on people, purpose, and planet, not just for benevolent reasons, but because it is in their best interest:
It is the only way to position your organization to access infinite value.