The Importance of Business Relationships
by Tania Williams
To succeed in today's collaborative, client-driven, networked economy, companies must take advantage of the strength of their business relationships to succeed. The business world of the past, in which each company could be managed in isolation, has rapidly changed into one in which decisions made by one business directly impacts the others. A new economy is emerging, one built on a complex network of information, interaction and change. This evolving business landscape, shaken by technological innovation, globalization and downsizing, has led us back to the most fundamental aspect of business: relationships.
Whether they’re partners, investors, employees or the community as a whole, enhancing daily business relations can unlock many great opportunities for a company, especially in terms of accelerating growth, building value, entering new markets and pooling expertise.
It’s as simple as the saying “Two heads are better than one”, and as clichéd as this sounds, it’s a strategy applied to business every day - and it works. The strategic alliance is a trend that’s here to stay. Many businesses have benefited from successful alliances. They can give companies a major competitive edge, allowing them to provide more for clients and customers than they would have been able to do by themselves. Trying to create what your company lacks is costly, time consuming and usually doomed to failure. Buying through mergers and acquisitions is expensive and complicated. Alliances are the cheap and secure way to go: no dilution, no risky leveraging of the balance sheet. If the partnership doesn't work, disband it. Partnering is becoming popular among some of the biggest and most profitable companies in the world. A study showed more than 20 percent of the revenue generated from the top 2,000 U.S. and European companies comes from alliances: HP/Cannon, Intel/Microsoft, Yahoo!/SBC, PepsiCo/Starbucks, Sony/Ericsson and Cisco/IBM are some well-known successful alliances.
Any relationship in life, whether it’s your brother, mother, friend or business partner, needs to be built through trust, openness, integrity and respect towards others. Business alliances need to be painstakingly structured, and meticulously planned. The path you build together should have a clear destination otherwise, you’ll both end up astray. Warren Buffett once said “In the business world, the rearview mirror is always clearer than the windshield.” The road ahead is always unclear, but if you trust the person you’re driving with, sit back and enjoy the ride.