Early in both Iraq and Afghanistan our troops did body counts, à la Vietnam. But the big change came when the officers running these wars understood that R.B.’s (“relationships built”) actually matter more than K.I.A.’s. One relationship built with an Iraqi or Afghan mayor or imam or insurgent was worth so much more than one K.I.A. Relationships bring intelligence; they bring cooperation. One good relationship can save the lives of dozens of soldiers and civilians. – Thomas L. Friedman, The New York Times

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Even in war, the question of what matters and therefore what to count, is a battle. Astute practitioners close to the action understand the connection and the distinction between means of production and the results of production. What you count not only places a brighter light on certain areas but it also removes light from other areas which can lead to darkness that is blinding.

Whole companies and even industries have been blindsided because they were not counting what mattered. The U.S. automotive industry initially ignored foreign cars in their measurement of market share. Xerox counted market share by copies reproduced but not by machines installed, letting foreign copiers pick up substantial penetration in the lower end of the market before they registered on the copy volume radar. Certainly our demise in Viet Nam was aided by early emphasis on and inflation of body counts.

The Iraq war was well on its way down the tubes before the surge strategy focused on becoming more ingrained into the local language, neighborhoods, and tribes; responding to local needs; and, building relationship with local leaders. It turns out that even the winning of wars is really a relationship business. The metrics of life – relationships – have proven more valuable than the metrics of death. The ability to gather reliable and actionable information, gain cooperation and support, and, to exert influence and build commitment, universally fuel success – in war, in politics and in business.

Yet many organizations are still narrowly entrenched in the business of counting bodies: Number of new customers, number of sales, financial profiles per sales person, products sales per customer, customer calls processed. Those are essential but narrow variations on body counts that are of limited instruction for the critical activities that must go right in building relationships.

Could we just declare once and for all that our relationships – some might call it our brand, reputation or strength of our connections, – are our most valuable and value-creating asset? The strength of the relationships is what drives the bus. How many customers are attached enough to put the lion’s share of their available wallet share with us? How many are so relationally committed that they will stay hinged even through a rough spot? How many will tell us sensitive information about themselves, other customers, whispers in the marketplace or even competitors that help us spot a challenge or opportunity? How many are advocates recommending us to their friends, family and colleagues? How many give us their best suggestion or ideas because they are that committed to us?

These are the very types of questions for which our metrics are weakest. They are hard to count, track, and compare quarter-to-quarter, across markets, over time, and against different managers and teams. Yet just as we have learned in battle, these are the soft metrics that ultimately win battles and saves lives.

If we enhance relationships brick-by-brick, day-by-day thus adding to our Net Relationships Built, the cumulative effect will build a market. Do that in enough markets and you build a company. Some of the metrics will be obvious and will even involve “body counts” like net customers added exceeds customers lost – or number of new customers recommended by existing customers in the past 12 months. But many will be so small that they will not be visible to the untrained eye. The special affinity a group of customers have for one or two of the staff in the teller line or the drive through. The comfort and competence customers feel from certain personal bankers or a manager that they may see only once or twice a year. The connection they have with a staff member they see regularly at church, in the neighborhood or at the local school. The leeway afforded in getting documents signed and delivered. The experience they have over the phone or on-line.

The sequential formula for Relationships Built looks something like this: making targeted contact, translating contact into interactions, interactions into transactions and transactions into relationships built.

Which leads to a second aim: Avoiding Relationships Destroyed. As relationships get built, expectations rise and relationship destroying activities have a disproportionate impact. As I have heard it said, “A good relationship gone bad carries the whiff of betrayal … ” Over-zealous sales efforts, rigid enforcement of picky procedures or ignoring the length and loyalty of a customer relationship often introduce betrayal.

The bottom-line: the winners are those who build the most productive and valuable relationships. Relationships Built is the metric for life.

(Column appeared originally in ABA Bank Marketing magazine – September 2009)

By ROBERT E. HALL

Not to be reproduced without written permission. All rights reserved. © Copyright Robert E. Hall 2009