It's no surprise to hear that the employee-manager relationship has a direct impact on business results. That when open communication, trust and encouragement are present, people and businesses excel. You can then easily assert that the ability to nurture, develop and improve the employee-manager relationship can directly result in an increase in productivity and profit. A well-known Gallup study also reports that a positive employee-manager relationship has the power to reduce turnover and strengthen retention even more than an increase in salary.
What might come as a surprise is that the companies that are most leveraging strong employee engagement aren't necessarily the ones with the large-scale initiatives and the super-sized budgets, but rather the small and mid-sized companies that are investing in developing managers who foster one-to-one relationships. The very size of these organizations allows them to encourage, support and develop these relationships to an extent that large companies cannot match. The ripple effect is quick and penetrates deeply, creating an environment supporting trust and loyalty. Investing in one manager can positively impact an entire department of employees. These small but savvy organizations know that the key to business success lies in the best possible use of human capital and that the strength of the relationships is what powers the company.
And this is where the small and mid-sized organizations win. Even with smaller budgets and tight timelines, they can excel at focusing on the individual and how he/she is perceived as a leader and influencer. They strengthen their business by retaining those with business acumen and relationship building skills and use those competencies to create alignments among their teams based on intellectual capital, trust and recognition. And they can do this better because their size often allows for more direct access to their employees, more face-to-face encounters and more desire to manage to one than cater to many. Also importantly, the destructive impact of a dysfunctional relationship is most quickly felt in smaller organizations.
Cultivating and fostering interpersonal relationships to reach a significant goal is not a new concept but one that has been tested under some of the most formidable circumstances. The story of Ernest Shackleton and the crew of the 'Endurance' comes top of mind. Stranded in the Antarctic for almost two years, Shackleton's leadership saved the lives of his "small company" of twenty-seven men and brought them home not only in good health but also in good spirits. It was an amazing accomplishment under the most excruciating of conditions. There are many lessons to be learned from Shackleton but his emphasis on team, respect, compassion, trust and cooperation is unparalleled. He recognized that individual performance is important but true excellence comes from an integrated team built upon solid interpersonal relationships.
During these tough economic times, it's tempting to put Leadership Development initiatives on the back burner and to focus on the tangible and immediate business opportunities rather than the "soft" stuff. But what can't be tossed aside, or considered soft is the direct and daily impact human relations play in all organizations. As companies create their budgets, tighten their belts and align their strategies for 2010, an investment in relationship building is a cost effective and almost immediate way to strengthen the organization and affect the bottom-line.
Call it Executive Coaching, Organizational Effectiveness, Leadership Development, Team Alignment- whatever you choose, but a focus on relationship development in 2010 is a solvent business strategy proven to work even in the most strenuous environments. If you want to be big or stay big, think small, one relationship at a time.
Alison Klakis Eydenberg's progressive approach to human capital issues makes her a valued part of the WJM team where she works on Business Development initiatives. She holds a Masters Degree in Organizational Psychology from Columbia University.