The Importance of Relationship Capital During the COVID-19 Pandemic

Better Relationships Lead to More Success

Organizations that leverage their employees’ personal and professional networks are more successful than those that don’t.

Research by organizational network analysis expert Rob Cross and others suggests that the quality of employees’ networks can have even more impact on an organization’s success than product knowledge and sales training.

For example, in studying account teams in the professional services industry, Cross and his research colleagues found that: “While individual competency and training can keep teams from landing in the bottom 20% of performers, it is almost always networks that turn out to be key predictors in distinguishing the top 20%.”

Their research identified three types of connections that distinguish high-performing teams and organizations from low-performing ones:

1. Quality of relationships between the client-facing team and the client organization: The right level of high-quality connections to the client organization “allows for better client service, discovery of cross-selling opportunities, and decreased susceptibility to the departure of key individuals on both sides of the relationship.”

2. Quality of relationships within the client-facing team: “A team fluidly connecting key expertise and roles is much more efficient and effective in identifying and capitalizing on sales and delivery opportunities.”

3. Quality of relationships connecting the client-facing team with other employees in the client-facing team’s organization: Having a broad network of connections within their own organization allows client-facing teams to “leverage scale in a large organization and so materialize the right products, services, and expertise for clients in a timely and efficient fashion.”

Relationship Capital & COVID-19

At RelSci, we call an organization’s web of internal and external connections its relationship capital. It’s an organization’s most important asset.

Relationship capital is even more important in the current environment, as organizations grapple with the negative effects and uncertainty caused by the COVID-19 pandemic.

According to a survey of business-to-business (B2B) companies conducted by the consulting firm McKinsey, “nearly 50 percent of companies have cut their short-term spending in response to the crisis and declining demand, and a similar portion expect to reduce their long-term budgets as well.” 

As the McKinsey report points out, “Amid uncertainty, the power of a brand as a known quantity is a tremendous asset.”

For many organizations, especially less-popular brands, being a “known quantity” means leveraging their employees’ warm connections to prospects and existing clients and customers.

How RelSci Can Help

RelSci is the most effective tool for relationship-driven business development.

If you would like to learn more about how your organization can better leverage its relationship capital, we’d love to hear from you.

Request a demo to speak with one of our sales representatives.