Business Benefits From Building Collaborative Relationships

By Diane L. Friar, CPA/ABV

The skill of building collaborative business relationships is critical both to the long term success of a business/organization and the formation of one’s career. When individual business successes are closely examined, it is not solely the person who created the company’s accomplishments but the relationships he/she developed. Jack Welch, CEO of General Electric, turned his company into an extremely valuable and profitable one through his relationships with hundreds of GE employees, board members, shareholders and others outside the company. Mr. Welch understood his network relationships both inside and outside GE were critical to his company’s success and included them in the mix of his intelligence, efforts and perseverance.

The personal benefits of building networks and relationships have been the subject of many scientific studies. It has been found that managers with diversified networks get promoted faster and at younger ages than those without networks. People find better, more fulfilling, and higher paying jobs through personal contacts. Those with solid, social networks are less likely to become ill. Leaders who have built strong working relationships are more likely to succeed when they initiate new programs or take the lead with new strategies.

Relationships and networks also establish stronger businesses and organizations. Businesses building on dynamic internal and external relationships have many advantages. Business opportunities, ideas, goodwill, trust, information, investment capital, power, and more can be found through both personal and business networks. The amount and value of these advantages depend on the quality, quantity and makeup of both personal and business relationships among owners, management, employees and outside interested parties.

Formal and informal networks create many benefits. Networking between employees from different areas of a business can activate new ideas, better efficiencies and/or cost savings. Supporting such a business culture can keep the organization ahead of the competition. Leaders and managers who encourage personal growth and learning through coaching, mentoring, sharing thoughts and dreams and instituting best practices may find workers are more enthusiastic, productive and valuable. Strategic alliances can give companies many cutting edge advantages. The ability to pick the brains of other entrepreneurs, obtain answers or suggestions from someone who has been there before and share helpful information with each other multiplies each business’s effectiveness.

Creating positive networks and relationships can produce a company’s best advertising. Printed promotion may increase the awareness of a product or service, but a personal referral or recommendation has a much greater positive impact on a purchase decision. When someone known and trusted suggests a service or product, the impact on sales is great. Word of mouth advertising cannot be purchased but is created through product value, satisfactory interaction with employees and relationships which provide affirmative endorsements.

Keep in mind that collaborative relationships last because they are reciprocal. People and businesses are helped by others because giving is the most important part of networking. Be certain to contribute to those in the network relationships. Ask what may be needed. Listen actively, rather than simply hearing a person’s words. Be attentive to body language. Give with a desire to genuinely help others with no expectation of getting something in return. This may generate many more networking and business opportunities than imagined. Businesses having strong relationships with friends, colleagues, employees, investors and strategic alliances have very definite advantages over competitors who attempt to be rugged individualists and don’t take the time or initiative to network and build solid business relationships.

Diane L. Friar, CPA/ABV has been associated with Echelbarger, Himebaugh, Tamm & Co., P.C. (EHTC) since 1977 and is currently a Shareholder and Vice-President of the corporation. She is active in the litigation support and business valuation department as well as client and human resource consulting. Diane may be reached at 616.575.3482 or dianef@ehtc.com.