Staff Writer 
Thought Leadership
Betty Murambadoro
“Business happens over years and years. Value is measured in the total upside of a business relationship, not by how much you squeezed out in any one deal”. – Mark Cuban, Entrepreneur
IF your mind immediately raced towards return-on-equity, sorry you got it wrong. I am talking about return-on-effort. An industry captain recently dragged me into an uncomfortable debate on the relevance of return-on-effort in relationship management. Should we always expect commensurate returns directly from those we will have spent so much effort on? Does this apply to every form of relationship ― business, family, friends and marriage. More puzzling is how to measure the level of effort invested in the relationship and the standard of measurement in assessing the return.
The debate was sparked by determining the ideal mix of personal clients, medium sized businesses and large conglomerates in the clientele base. He argued that the mix is dependent on weighing the adrenaline levels, energy, time allocation demanded and monetary cost versus the real benefit derived in monetary form, plus clout accrued from serving such clientele. He expressed thought provoking views on how we sometimes get emotionally drained in serving and yet the implied benefit is far removed from such emotional cost.
He unpacked this in a manner that left me at a crossroads in my years of relationship management. In fact, I couldn’t help but apply this term to my family life and social circles where relationship R.O.E. was demonstrated. Return on effort simply challenges us to reflect if the return derived from a relationship is really worth the effort we put. I took the debate to my marketplace colleagues. The conversation intensified further and is still brewing to this day with no real conclusive position.
The strong view I hold is that it’s not always the case that the return be directly derived from the relationship I have invested into. As I serve diligently, I gain social capital which leads to referrals. After all, it is written that we reap what we sow and not reap where we sow. You earn a good name and that positive reputation gets you advocates who confirm your standard of excellence. So, should I really worry about where the return comes from? Right! It gets complicated when tiering business partners into categories, choosing who to onboard or offboard whenever there is scarcity of resources and who should be seated at the high-table of our family social gatherings. Surely isn’t this a subtle and implied return-on-effort in determining these categorisations?
I had a very humbling experience when I invited someone to share a meal with me. I could see her eyes getting watery and she wiped away tears from her eyes. In her exact words, “why would you spend on me and yet I have nothing of value to give in return?” This was a priceless return to me. I cannot attach a monetary value to this. Yes, I spent time, money and emotional energy in sharing a meal with her. But if you had witnessed the watery eyes and listened to the words expressed, there is absolutely no way this was a low R.O.E outcome. This lady had shared about my previous meal sharing moments with a newspaper vendor across the street. Surprisingly the newspaper vendor corroborated his own positive experiences about my interactions with him. These are two individuals who ordinarily would not bring any noticeable real return to me.
So, with this, where are we now with the return-on-effort debate? In strict business principles, the tiering approach to ranking relationships informs the extent of service requirements. But just remember though that a lower tier relationship may graduate to a higher tier level with time. We are social beings and should not always operate with wanting the hard stuff returns. There are soft returns too. Measuring return-on-effort in monetary terms, if overdone can almost take away the sincerity and genuineness we desire in relationship management.
I recently had a team of marketplace partners who shared something profound about my years of interaction with them. They acknowledged how over the years I consistently visited them even when they had nothing to offer me back in terms of business. The state of their business back then was such that there wasn’t much to be solutioned for. Fast forward to current state of that business, the tide has shifted and there are multiple business opportunities. If back then I had implemented relationship R.O.E., I would have abandoned this relationship totally. Intriguing! Isn’t it?
One of my marketplace colleagues aligned that applying relationship R.O.E. in monetary terms all the time is taking a short-term view of life. It becomes evident that you are incentivised only when you are getting something out of the relationship that’s commensurate with your “sweat capital”. You can still nurture and grow a relationship without strictly checking for the monetary value of your engagements. She believes that you cannot be business-minded in every relationship in your life.
Our other colleague keeps digging in that it’s part of your responsibility to the employer or shareholder to maximise time allocation, and ultimately getting commensurate returns is what exactly you were hired to do. According to this colleague, a R.O.E. conscious person should make money and ensure best use of time. But must all our relationships be determined on perceived monetary R.O.E. And you cannot readily track every relationship in monetary return terms. We can’t be that pedantic. Some relationships are merely for learning experience.
As the debate rages on, I am absorbing these key learnings:
1. Not all relationships will directly translate into monetary value;
2. Be mindful of what good use of your time looks like;
3. Some relationships take a longer gestation period to give you value;
4. Always remain humble in navigating relationships across all societal levels;
5. Being relational will always pay off in the long run.
I pen-off this 17th article and still unpacking this fascinating subject of relationship management. I leave you to demystify return-on-effort in your own way.
l Murambadoro is Nedbank Zimbabwe managing director.
