The future of high-value relationships
Last week I spoke at the annual meeting of a division of a major bank. It was a one-hour event, with a live audience of several hundred, and a few thousand who worked in other locations watching via a live webcast. Given the pace of change in their business and their overt focus on innovation, they had me speak for 20 minutes on the future, followed by the top two divisional executives for 10 minutes each on what they expect in the business moving forward, then the entire leadership team plus myself up for 20 minutes of Q&A. It was a first for them to use an external speaker for the event, though given the success of the format they will undoubtedly do it again. Bringing external perspectives can be invaluable in stimulating new thoughts on the business and where it can go.
My presentation quickly skimmed through the implications of shifting demographics, work dynamics, social expectations, financial and economic structures, and technology, framed in terms of how to think more openly about possibilities, challenges, and opportunities.
However in the final Q&A session I was asked about the future of business relationships. Given commoditization and competitive pressures, what would happen in relationships?
My response harkened back to my first book Developing Knowledge-Based Client Relationships.
Paradoxically, in a connected, global world in which relationships seem to be eroded at every turn, the fundamental of relationships are becoming ever-more important.
In financial services in particular, there are three key aspects to ‘knowledge-based’ relationships that not only create value, but can also essentially lock-in the client.
1. You know more about the client. If you know your clients better than your competitors, and critically do things differently because of that knowledge, you will provide deeper value.
2.The client knows more about you. If the client knows you and your business processes well, there is a real cost to learning others’ approaches and ways of working.
3. You enable the client to make better decisions. While there are a number of ways in which true knowledge-based relationships create value, in financial services the heart is in helping them to make better decisions. The value of improved decision-making is enormous, and something that cannot be readily replaced.
During the drinks after the event the person who asked the question found me and told me that he had just won a multi-million dollar deal, and he recognized after the fact that he had done that by applying exactly the three principles I offered.
In an intensely networked world it is true that some relationships erode. But that makes the value of knowledge-based relationships even greater.
