The risk of being too relational
The following is based on one of The Covenant Group’s clients. All of the names and telling details have been changed.
Jan Holman’s strategy of building a team of specialists and assistants to help him move into the business market was backfiring badly. His expenses had gone through the roof, but his revenue hadn’t budged.
Jan had been an advisor for over twenty years and for the previous eight years his business, with the help of two dedicated assistants, had generated over $450,000 annually. Last year, after reworking his business plan, Jan made the decision to hire two specialists, one marketing wizard and a sub-producer, to support his strategy to specialize in the business market, where he had dabbled for many years. It was a bold move, but he was confident that if he could get face to face with a steady stream of affluent prospects he would have no trouble generating the revenue to cover the new hires and make a profit. The sub-producer would help relieve Jan of service work for C and D-level clients and the marketing specialists would run a number of campaigns and events to attract high-quality prospects. It all made sense on paper, but six months into the new plan, Jan had seen no reward for his efforts.
“Adding two new people to my team has really taken a lot out of me,” Jan said. “I guess I was optimistic about when I’d start seeing results. Maybe I need to give it more time.”
“Perhaps,” I said, “but I would think by now you should be seeing a return on your investment. What do you think the problem is?”
“Well, basically it comes down to me not seeing enough good prospects.”
“And why is that?” I asked.
“I hired Barb, my sub-producer, and Cole, my marketing guy, to free me up to work at a higher level. But the reality has been I’m getting bogged down. Barb is a good advisor, and I really believe she’ll be able to grow into a top producer, but I’ve had to spend a lot of time with her, introducing her to my clients and training her on how I want her to service them. I didn’t expect to spend this much time with her, but I guess it’s a good investment in my business. Soon she’ll be more independent.”
“And what about Cole?” I asked.
“Cole’s a good guy. I really like him. He’s the son of a friend of my mine and I’ve known him since he was a young kid.”
“But how is he on the job?”
“He’s coming along.”
I encouraged Jan to be completely frank with me.
“I guess I have some concerns.”
“Like what?”
“Well, we’ve now run a couple of seminars and both times I was disappointed in the types of people that showed up. They didn’t fit the profile I was looking for. Only a few were affluent prospects.”
“Why didn’t the right people show up?” I asked.
“Because Cole didn’t invite them.”
“Why?”
“I’m not exactly sure. I wanted Cole to work with Carole, an accountant I know, to develop a list of high profile prospects and invite them. But he only got a couple of names. I was expecting a list of fifty people. Cole was supposed to send out an invitation on Carole’s letterhead to attract these people.”
“So what was the problem?”
“Maybe he didn’t feel comfortable working with Carole. I’m not sure. Maybe Carole was busy.”
“Jan,” I said, “I’m concerned about your not knowing what the problem was. Weren’t you managing Cole throughout the process.”
“Sure, but –”
“But you were afraid to bring up something negative.”
“I guess so. Cole’s a hard worker. He’s been working late nights, putting in all kinds of crazy hours. He really loves working with me.”
I interrupted Jan. “Look, it’s great that Cole loves working with you, but you’re running a business, Jan. And you’ve got to make sure that your business achieves its objectives, and right now, it’s not.”
Jan nodded, but said he wasn’t sure how to handle Cole. “Cole is the son of a friend of mine, I have to be careful.” Jan said.
“I respect that,” I said. “But it’s better for you and for Cole and for your friend if you can get your business on track. You’re not doing anyone any favors right now. A great friend of mine, Patrick Foley, who is Head of Individual Insurance Group at Allianz Life in the US, taught me something I’ll never forget. He calls it Foley’s Law. According to Pat, there are two types of approaches to building a relationship. The first is relational, where the focus is on building trust and getting people to like you. The second is confrontational, where the focus is on challenging the relationship and encouraging it to evolve and grow. Strong relationships are built on a judicious blend of these two approaches. Unfortunately, with most people, one of the approaches tends to predominate, to the detriment of the relationship.”
“I guess I’m the relational type,” Jan said.
“Yes, and it’s interfering with your ability to manage. I want to make something very clear, Jan. Confrontation is not a substitute for managerial responsibility. If you don’t assign the task properly, if you don’t set the right context and provide people adequate resources, you don’t have the right to confront them. When something doesn’t go according to plan, you have to be clear about when the fault is yours and when the fault lies with your employees. And you have to be open to things going wrong because of external forces and unforeseen obstacles. But from what I’m hearing, it sounds to me like you set the context and assigned the tasks properly, but failed to monitor Cole’s performance.”
Jan agreed.
“It’s your job to ensure that Cole is doing his job the right way. I understand that it’s often not practical for you to be able to keep on top of everything, but you certainly should have sat down with Cole after the first seminar and debriefed on what went wrong. And when I say you need to confront Cole, I don’t mean you need to raise your voice, I simply mean you have to deal with the issue head-on and not be afraid to bring up issues that you feel people will take personally. The basis of your discussion should be looking for growth opportunities. You and Cole need to explore together what went wrong. You have to be open to taking responsibility yourself if it is warranted, but don’t overdo it. Be open to Cole’s accountabilities and where he fell down. In the end, you might find out that Cole is not right for the job, but there’s a good chance the issue is skills related and your solution will be to train and coach Cole to the skills he’s going to need to do the job properly. Most people in Cole’s position don’t willingly admit to a lack of skills or aren’t aware they lack the necessary skills. It’s your job to find that out.
“If you don’t confront Cole, you will continue to get frustrated. People who are too relational end up with mediocrity. They tend to sweep things under the carpet, and eventually the carpet gets too lumpy to walk on. By contrast, people who are too confrontational usually get good short-term results but eventually their employees either burn out, bow out or rust out.”
Jan agreed to change his approach and committed himself to hold his people accountable.
A couple of months later, Jan told me the process was nothing like he’d expected. There were no big fireworks or crying jags. While Cole did have a tendency to get defensive, in the end, they were able to identify developmental areas for Cole and to put together a training solution to address those needs. In fact, Cole was actually excited about learning and growing. And Jan’s fear of jeopardizing his relationships with Cole’s father turned out to be a non-issue. Cole has since run two more seminars, both of which generated numerous high-quality prospects for Jan to follow up with. Revenue has picked up finally and Jan is on target to grow by 35% this year.
Lessons Learned
- Jan learned four important lessons about building effective teams:
- Foley’s Law states there are two types of approaches to building a relationship: relational and confrontational.
- An approach that is too relational builds trust but doesn’t lead to effective performance.
- An approach that is too confrontational will usually work in the short-term, but burns people out.
- Successful relationships are built on a judicious blend of the two approaches where managers build trust but aren’t afraid to hold their people accountable to assigned tasks.
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The Covenant Group is referred to by many as the place entrepreneurs go to become Business Builders. They are considered to be thought leaders and have authored the best-selling books, The 8 Best Practices of High- Performing Salespeople, The Entrepreneurial Journey, and The Business Builder.