Transacting vs. Interacting: The Effect of Meaningful Connections

By C. Richard Panico, President & CEO, Integrated Project Management Company, Inc.

One might argue that we communicate more than ever because we have tools and technologies at our disposal to reach out to more people, more quickly, in more places than ever. This is true. However, I have come to the conclusion that many of the ways we communicate actually diminish interaction.

In many cases, we have the option to place a phone call, visit, or even simply walk across the office, yet we default to sending a text message or email. The argument is that this is more efficient. I’d argue maybe not. Calling another person or, better yet, meeting someone adds a dimension to the interaction, one that allows other senses to contribute to our perception of each other. It also increases the potential for the establishment of a relationship. The more of our senses we are able to engage as we communicate with others, the greater the opportunity to determine if there is a possibility and/or desire for a more personal connection and friendship. Communications are like pictures; they can be established on one dimension (a snapshot) or multiple dimensions (3D or model). Each level or medium engages the senses and the level of reality and emotions elicited.

Giving Lip Service to Relationships

Nowhere have I experienced a greater avoidance of personal interaction than in business over the last decade. The trend to transact and contract rather than interact has become increasingly prominent. While businesses still speak about the importance of building strong relationships with suppliers and customers, there is a diminishing priority placed on the investment in them. A relationship built on reliable and trusted performance is too often discarded when a cheaper option is presented. We know this eventually creates negative impacts to both businesses.

The propensity to transact is also fueled by the focus on short-term benefits. Relationships, explicitly or implicitly, are long-term investments. They require a mutual commitment to caring, reciprocal success, and investment of time to generate sustainable benefits. Conversely, transactions are simply “you sell, I buy” contracts and agreements. Some organizations go so far as to employ third-party procurement companies to negotiate agreements, even with long-term customers and vendors. In most of these cases, the focus is strictly on cost without regard to value. This is sad and shortsighted, nonetheless a reality.

Better Together

While it certainly was far from a perfect business world when I began my career, I can honestly say that relationships were more valued. I recall one of my first business trips early in my career when I worked at Johnson & Johnson. My manager and I visited a long-established and trusted supplier in New Jersey. The company had been designing and building equipment for J&J for decades and there was a significant mutual investment in maintaining this strong relationship, based upon trust and performance. Loyalty was understood and mutually rewarded.

Besides the short-term focus that exerts such a strong influence on businesses today, I have long believed that the reluctance to establish strong business-to-business relationships is influenced by the misconception that leverage is lost, that somehow the relationship diminishes my ability to hold you accountable because it introduces emotions. Yes, it is true that relationships interject a mutuality of caring. However, it also raises the commitment to an even greater level.

Fortunately, there are still those who understand and appreciate the value of trusted relationships. I can cite many business relationships, nurtured from IPM’s inception, that have delivered significant mutual value through the years. Regardless of others’ approach to business, we will continue to drive our business through the development of authentic business relationships.

Bringing it “Back Home”

A focus on relationships enhances organizational culture as well. We have built IPM on a culture of caring. I often use the term “IPM family,” and never loosely or superficially. We care about each other and have each other’s backs. I am a firm believer that you cannot be on the outside what you are not on the inside. If we expect to interact and build relationships on the outside, we have to continue to do it on the inside.

It has been interesting to learn about so many companies that experienced windfall profits over the past three years, who are now quick to discard their people. These are the same companies that marketed and promised a much different scenario only a couple years ago. What we are observing is “transacting” at its fullest.

More and more companies are realizing the negative impacts of not bringing people together. Their neglect of company culture and meaningful business relationships is beginning to impact performance and their priority measure, the bottom line.

I expect financial headwinds to be remain strong this year. They have to be met with a greater force that is committed to caring beyond expectations, a force that stresses interactions more than transactions.

Service: Strategy Realization
Industry: Multi-industry

— Published August 3, 2023