Why measure relationships?
The ability to identify and measure relational issues is a huge asset to company managers. Senior management spend much of their time dealing with stakeholders, and measuring social impact is the missing piece of the jigsaw in “triple bottom line” reporting.
How relationships impact company prospects
- Good corporate governance requires an understanding of the impact of a company’s operations on the wellbeing of all stakeholders – for example, as set out in the new South African corporate governance code, King III.
- Sales levels and sustainability depend on the quality and strength of relationships with customers.
- Supply chain relationships are a key factor in long-term corporate profitability. ‘Industrial Relations’ between management and staff impacts employee motivation, rates of shop-floor innovation and labour productivity.
- Relations with shareholders determine whether they stay with the company through the good times and the bad.
- Relationships with regulators often determine the speed with which it is possible to introduce new products, what price they can be sold for and, ultimately, the breadth of profit margins.
- It is now widely recognised that ‘goodwill’ is a proxy for a company’s relational capital, i.e. a measure of the strength and quality of the relationships a company has with its stakeholders.
- Measures of a company’s stakeholder relationships become important in the context of merger and acquisition discussions or negotiations.
- In addition, relationship management is fundamental to brand value and reputation, competitive advantage, risk reduction, innovation and flexibility.
The Relational Proximity Framework®, based on Relational Thinking, has been extensively tested and internationally deployed. It was developed in Cambridge, UK by Relational Research, which specialises in understanding and recommending policy change for issues connected to relationships.
The Relational Proximity Framework® is a groundbreaking approach to transforming organizational performance. It measures the amount of relational access individuals have to one another – access determined by formal or informal rules of engagement established either by the stakeholders’ own behavioural habits or by company practice and policy. By using it, management can address organization-wide relationship problems and strengthen the relational infrastructure on which productivity depends.
For more information on using Relational Proximity Framework®, please visit the Relational Analytics website.
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