Managing Business Relationships

In my entrepreneurial journey I have co-founded a few businesses and each new venture has at its core a relationship model. Each business is locked into a complex network of relationships with customers, suppliers and business partners. As leaders, we need to assess the relationship models in each business entity. The way a business manages relationships with its stakeholders — employees, investors, governments and the community at large, is critical to its growth and at times survival.

Broadly speaking there are four types of relationship models, viz: Symbiotic, Parasitic, Caustic and Supportive. Each have their pros and cons and the best that have worked for me are Symbiotic and Supportive.

Symbiotic

In this kind of relationship interactions between two people are beneficial to each other. Symbiosis is when two entities meaningfully team up to achieve a win-win scenario. This act of collaboration allows them to survive better than they would have as individuals.

A symbiotic business relationship is one where all stakeholders concerned with a particular transaction mutually benefit from a positive outcome. A strategic alliance achieves synergy when the partners provide and extract value. Both companies benefit from the combined capacities (capital or expertise) and venture into bigger markets.

In my experience these are the relationships that survive the longest because of its mutual benefits.

Parasitic

A parasitic business relationship is where one entity lives off the largesse of another without giving anything in return, and at times may cause harm to the host. They take advantage without reciprocating while living at the hospitality of other.

Parasites persistently cling or bleed others for their own advantage, be it monetary benefits or fame.

A parasitic partner is often demanding unmindful of the consequences of their actions as long as their ends are met. Parasitic relationship may not be just between two business entities but could also be extended to customers. An organization that overcharges the customer for a product or service without delivering the expected outcome is one such parasite. The business makes profits without giving real benefit to the customer.

I have seen that such relationships have a very short life and often get discovered and then discarded.

Caustic

Caustic relationships are those that are corrosive in nature, doing more harm than good. A business relationship where you manipulate the other partner for your own advantage is a caustic relationship. Such a business partner can suffocate you with unrealistic expectations and drain your budget and resources.

It is best to avoid a demanding business partner or a customer who can erode your credibility and profitability with expectations that are not aligned to the price being paid. It is good to have a demanding customer that makes you work harder, but a caustic customer can demotivate your employees and deprive their sense of achievement.

A caustic relationship is worse than a parasitic one, because the irritation and frustration are intangibles that cost an immeasurable amount.

Supportive

In a supportive relationship one gives without putting any focus on receiving. The giver believes in the philosophy of “Givers Gain” and these relationships go a long way and are fruitful for both.

Mentoring is a supportive relationship between a caring organization that shares wisdom and experience with a partner who will benefit from this exchange. Both work with a sense of participation and without obligation.

It is also an emotion-backed relationship where both sides benefit. The giver is nurturing the mentee company to rise to a level to be a good partner. In the process, the mentor also benefits from upgrading itself to a level to be a good partner.

I like this kind of relationships and have benefitted from being a mentor. The benefits may not just come from the company being mentored but the valuable insights gained while teaching has helped me in my other ventures. At times, the fresh approach of the novice has given us a totally new perspective.

I look forward to hearing your comments, and what kind of relationships worked best for you? Were you in a parasitic partnership? How was the experience and how did you move it to a symbiotic one?