ROR and the importance of Reputation

 

The previous blog discussed the concept of Return on Relationships “ROR”.

The “old way” of measuring success in business was based on indicators like Return on Investment (ROI) – if you spend $1m on a CRM system, for instance, how long will it take to recover the costs and turn a profit. This concept is well understood and easy for any ‘bean-counter’ to work out.

However, we are moving towards an economy that is based to a greater extent on knowledge, skills and services that don’t necessarily have a tangible (or easily measurable) ROI. Platforms like Ecademy create an environment in which we can connect with people anywhere in the world and give and receive referrals and do business. Whilst the concept of referrals has always existed, it is now truly global and you may be making introductions, giving referrals and doing business with people you will never actually meet face-to-face.

On this basis, it is critical that we invest time in building these relationships and the concept of ROR (Return on Relationships) is about extrapolating this investment in the relationships themselves into something that can be quantitatively (or at least qualitatively) measured. There’s no doubt ROR exists and many people in Ecademy can earn a living from it, including me!

Examining referrals for a moment – we don’t have to go back too far in time to appreciate the power of the “old-boy-network”: The old school tie, the golf club, the Regiment or Corps and the Masons, possibly……. a group of people who would look after you because of WHAT you are, not necessarily WHO YOU ARE. If you weren’t part of that clique, getting a fair chance was tough, at best! More recently, in the employment market, we saw a period where it was almost impossible to join some companies unless you worked for one of their competitors, have at least a 2:1 degree in a “relevant subject” and “ideally an MBA” – no qualitative criteria that would ensure the Hiring Manager got the best candidate, just HR benchmarks to make their life easier!

The pendulum is now swinging in a new direction – and I hope it gets stuck here! This new direction is REPUTATION driven and is being powered by online networks like Ecademy and Linkedin and it’s great news, because everyone who knows you, likes you and respects you may be in a position to assist you in your future career and we now have a variety of ways of efficiently managing these connections.

Your ability to “get on” and “move up” is now being driven to a greater extent by your network and the degree to which your network understands what you can do and how good you are at doing it. If someone is going to recommend you, they need to be certain that doing so will, in turn, be good for them. The recruiter’s days may now be numbered, at least for those that don’t add genuine value within the recruitment process.

On this basis, to maximise ROR, it is critical that you INVEST in your reputation in the marketplace, by investing in your network – growing your network by adding trusted connections and making sure these people understand what you do and what your value proposition is and, likewise helping them in any way you can is critical to maintain the balance.