About seven years ago when I joined banking, I found out a very interesting phenomenon about business relationships that changed my way of thinking, considering an earlier experience. Just a year after joining college, my mum’s account was closed by a certain bank for having less than Kshs 10,000 as a minimum balance. To make it worse, she was advised that she could only operate a similar account 80km away.
My belief was that she deserved better treatment because a business, like a family, is anchored on relationships. Having been brought up in a large family setting in which people treated each other well, and created comfort for one another, this provided me with an example of how any professional or business setting should be operated. The damning news for my mother did not reflect that kind of warm association.
Anything about humanity in the world today that is successful has an element of relationship. A number of people sit together and agree to be directors of a company and pursue a common interest. A number of individuals consolidate their ideas and form a partnership in business. A couple sees an opportunity and goes for it, starting a business, first anchored on their marriage relationship but extending to social and financial freedom. So, start thinking what level of relationships is involved in your business.
Let me put this into context. A business, just like an individual, has social and financial needs. A lot of people put more emphasis on the financial needs, which is by all standards justified. All the resources in a business are anchored on cash flows. The employees have to be paid, while operational costs need to be taken care of. All these are financial needs that take precedence and priority. If a business or an individual does not take care of financial needs, its existence no longer holds and it’s headed to bankruptcy.
Social needs on the other hand are based on relationships. Great business acumen demands that a businessperson establishes watertight networks and relationships that can easily respond to its needs. Most times, the dynamism in business depicts a number of emergent situations, which in most cases cash flows cannot respond to adequately. Take for example, a recent transport environment where the regulatory authorities halted the sale of speed governors for a number of key players in the industry. In this instance, business players in the transport industry may not be in a position to finance operational costs in the absence of consistent sales. The situation is worse for players who cannot leverage on existing relationships to access working capital and bridge the financing gap as they await termination of such suspension.
While relationships may be anchored on key financial parameters, they go beyond this. Cultivating similar warm associations with the regulators, suppliers, media fraternity, key customer segments, lease holders and other stakeholders is the healthiest initiative to do for your business.
This is a challenge posed to most entrepreneurs who give me an opportunity to discuss the key anchors to their business success. First, they must scan through their business processes and establish who the stakeholders in their business environment are. From this long list, they have to narrow down to the most important, and initiate outreach to bring them closer. The healthiest business has working relationship with key stakeholders, and hence it will never lack a fallback position.
