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Relationship Asset Management

by Thomas Richardson    

RAM, a system for mining the full value in every business relationship, has certainly worked for the authors. Today their holdings include interests in a venture capital firm, consulting firm, restaurant, packaging manufacturer, and resort and hotel properties. The authors originally developed RAM when building Systems Consulting Group, Inc., a highly successful technology consulting firm they founded in 1988 and sold in 1995.

"Relationship Asset Management summarizes what many successful companies have done intuitively" says Joyce Elam, Dean of the Business School at Florida International University. She adds, "It is also relevant to companies of any age and any size".

RAM is a step-by-step system for:

Initiating and building solid, supportive relationships with everyone your business touches

Developing strategies for putting your relationships to work

Mastering the art of "getting to know the right people"

Building your business, stakeholder by stakeholder.

This new paradigm of business management immunizes companies against the effects of the gradual depersonalization of business in America: job-hopping employees, fickle customers, high-pressure suppliers, skittish investors and hostile communities, to name a few.

"Relationships are under siege in this Age of the Internet, but human nature hasn’t changed," say the authors. "The human needs for contact, interaction, affiliation, respect, recognition, reward, teamwork and sharing have not diminished. That’s why relationships remain at the heart of business."

RAM is based on simple principles. First, relationships are assets in the same way that cash, real state and equipment are assets. You need them to do business. Second, every person and organization has a "relationship universe" and must achieve a proper balance in this universe. Third, although the process of building sound relationships is intuitive to many of us, it does not happen in business without a structured, proactive approach. Finally, a relationship must be win-win or it will not last. With RAM’s win-centric approach, people enter only relationships where both sides benefit equally over time.

In RAM every single relationship is important, not only those with employees and customers (as essential as they are). Richardson states: "Saying that your customers or employees or shareholders are number one misses the point. The priority of each stakeholder group needs to be balanced. It also needs to shift in response to conditions in a well-planned, well-executed manner."

The need for balance is evident when companies value only their relationship with "Wall Street." These companies sacrifice all other stakeholders on the altar of share prices. This myopic approach led a "high-flying" company of the 1990s to repeatedly cancel employee bonuses in order to hit its quarterly earnings targets. That tactic placed shareholder interests over those of all other stakeholders. Employees soon left and service suffered, which damaged customer relationships. This eroded revenues and profits and ultimately hurt the very investors that the company valued so deeply.

According to Vidaurreta: "Building and maintaining relationships is a bit counter-culture in our society. The US tends to be nomadic and a throw-away society. We don’t fix things, we replace them. This mind-set makes maintaining relationships difficult for most of us."

Implementing RAM

To implement RAM strategy, an organization or individual must:

Identify their goals, success factors and risks, because reaching goals, enhancing success factors and mitigating risks are the desired wins.

Define the stakeholder groups and, within each group, the individuals that can help the organization get its wins.

Identify the other party’s wins. One way to do this is to imagine yourself in the other party’s position and gauge their expected wins, a process Richardson calls "spoking-out."

Connect with the targeted stakeholder and learn more about their wins and how you can help them achieve those wins—and then pursue the identified mutual wins.

A successful RAM program calls for cultivating a broad relationship universe. This means treating every person you meet as a potential stakeholder. It means always asking yourself, "How can this person help me win, and how can I help him achieve his wins?" It means openly discussing the wins on each side, and each party doing everything it takes to deliver the agreed-upon wins to one another.

RAM has been presented—and enthusiastically received—at prominent graduate schools of business and at business organizations nationwide. Practitioners agree that RAM turbocharges their relationships with the people who hold the keys to their success. Moreover, the authors themselves are living proof that RAM works.


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What is RAM?  The new model for business success. 1. The process of looking at relationships as assets - just as you would cash, land, or inventory. 2. The mining and cultivation of value from a relationship to the benefit of all related parties. 3. Th