A Chief Executive holds many responsibilities. Chief among them is the responsibility to set clear expectations and ensure that the team has the resources needed to deliver on them. Once these elements are provided, great CEOs orchestrate — they get out of the day-to-day and allow their teams to execute while facilitating the dynamics between them.
An often overlooked aspect of this core responsibility is understanding what providing the right resources truly requires. While it absolutely means ensuring access to financial capital and providing a final allocation of budgets, that is far from from the entirety of the responsibility.
A CEO is uniquely positioned to provide relational capital. An effective Chief Executive actively builds his or her network amongst a series of connectors, influencers and power brokers. She or he is able to open doors when the stakes get high and provide access to resources otherwise out of reach. To do so, start with the following principles.
Think Long Term: Building relational capital is a long term play. While you may be able to use your title to initiate some conversations, the most meaningful connections are those that you build purposefully and over time.
Be mindful and deliberate about building your network and consider who you might need access to and what circles you need to be involved in to obtain it. Be strategic and build relationships with individuals that provide leverage – the connectors and influencers that can help expand your network.
Prioritize Adding Value: Building a powerful network is difficult if you do so selfishly. Relational capital, like all other capital, requires investment in order to grow.
Be deliberate about investing in others. Seek to connect individuals within your network to others that they may benefit from knowing. Look out for the best interest of your tribe. Connect them to potential clients, prospect employees and job opportunities. Help them navigate and add value to their own network.
Leverage Peer Groups: The most powerful networks are those that are interconnected. Connecting your network to another network multiples the impact of each one – just like the impact of connecting one network of computers to another led to the creation of the internet.
Peer groups are powerful, yet often overlooked, component of a personal network. By creating powerful bonds with peers – other CEOs in similar situations – you are able to rapidly expand your reach and influence amongst trusted parties.
For 8 years I built a network amongst executives, politicians and influencers that had connections to and were doing business in Romania. I had no idea when I would need it, but, I figured that at some point these relationships would come in handy, so I spent time investing in these relationships.
When the new Romanian Government recently pushed comprehensive Tax Reform through rather quickly, many were caught off guard with a rather large increase in labor costs. Instead of rushing to and making ill informed decisions, I was able to use my relational capital to figure out what was going on, how others were reacting to it, and, help guide my team through some fairly difficult decisions. As a result of my relational capital, we were able to make more informed decisions than otherwise would have been possible.
This is the power of relational capital.