Very few people now argue with the good sense of establishing and nurturing longer-term, fully functioning business relationships. While the theory is accepted, however, the practice of pursuing optimal collaborations can often lag behind the received wisdom.
Of course, it is rare for businesses immediately to cease trading simply because their relationships come up short. In truth, as a consultant in relationship enhancement, I cannot deliver the instant, spectacular impact of a paramedic, a firefighter or a superhero.
But relationships are not ‘nice-to-haves’ in the commercial world. They are measurable levers which powerfully enable and underpin effective business interaction. And they need constant, careful attention for all parties genuinely to enjoy the best of each other.
So, how do decisions on relationship management sometimes become relegated to the ‘I hear you but not now’ category? Or worse, how are they only confronted when fractures appear in the foundations of key alliances?
This month’s Harvard Business Review (HBR) provides a timely reminder of the influences upon decision making and why misjudgements can be made.
Citing Daniel Kahneman’s book, Thinking Fast and Slow, the HBR piece describes the two modes which it is now accepted that human beings use to process information and make decisions – System 1 (fast and emotional) and System 2 (slow and logical). Each mode has its advantages and disadvantages but, as the article asserts: “All too often, though, we allow our intuitions or emotions to go unchecked by analysis and deliberation, resulting in poor decisions.”
Unpacking this a little, given that meaningful relationships are emotional in nature, we see that some of the cognitive biases which influence all decision making are particularly relevant here. They can take the form of action-orientated biases like overconfidence where we overestimate our skill level relative to others and consequently our ability to affect future outcomes.
Similar biases can relate to perceiving and judging alternatives. For example, there is confirmation bias where we place extra value on evidence consistent with a favoured belief, failing to search impartially for evidence.
There are also stability biases, like present bias where we value immediate rewards very highly and undervalue long-term gains. This is celebrated by chocolate bar manufacturers the world over!
All of these factors can sap the motivation to consider important commercial relationships in the round and to seek a credible outside view. Interestingly, in this regard, the HBR feature warns of an additional danger, being “fooled by experience”, urging that: “Honest feedback – an unbiased, undistorted assessment of one’s experience – is essential for improving decisions.”
This begs the question of how to engage System 2 thinking in decisions pertinent to relationship management. Again there are pointers in the HBR piece, some based on the concept of choice architecture introduced by Thaler and Sunstein in their best-selling book Nudge: Improving decisions about health, wealth and happiness. Specifically, we can improve decision making by upgrading the processes by which information and options are presented to us – for example, by using planning prompts and reminders, by creating opportunities for reflection, by inspiring broader thinking, to include the consideration of disconfirming evidence.
Building on this, my experience tells me that gaining a balanced, realistic view of the future, specifically, of the personal and professional needs of our business associates, is vital to the success of longer-term, mutually valuable relationships.
In a 2013 article for Fast Company magazine, Chip and Dan Heath (authors of, among other appetising works, Decisive: How to make better choices in life and work) advocated the 10/10/10 rule to help legislate for a future focus in decision making. (In facing an important decision, ‘How will we feel about it in 10 minutes from now?; How about 10 months from now?; How about 10 years from now?)
10 years might be too long-term for most business relationships but there is no debating the conviction that this shift away from the present “can help us keep our short-term emotions in perspective. It’s not that we should ignore our short-term emotions; often they are telling us something useful about what we want in a situation. But we should not let them be the boss of us.”
Enlightened organisations increasingly manage their important internal and external relationships with an eye on the future and, as result, include this activity within the realms of strategic planning. The importance of day-to-day delivery is not diminished in this analysis, just the risk of being caught out by tomorrow.
We’re in an overwhelmed economy where, more than ever before, we are tired, stressed and spinning plates. In these pressurised times, don’t be a victim of your biases. Take the time to outsmart them. It will be worth it to get the most from your business relationships.