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Value within business relationships.

Buried within the context of the last few posts on this blog has been a fairly profound shift in the nature of relationships within business. While a typical business relationship used to be transactional – I pay and you give – the ideal relationship today is far more complex. There is an exchange of value that exists quite independently from the exchange of money or labour.

I started thinking about this a couple of years ago when it struck me that I couldn’t figure out who pays whom when a company like Dreamworks does a deal with McDonalds for a Happy Meals promotion.

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In these relationships, the exchange of value is quite even. In addition, the ability to collaborate and share a variety of different assets, processes and IP, almost certainly delivers value to both parties which transcends any financial cost.

I’d love to be in the room for the negotiation of a deal like this because it seems to me that all dimensions of value would need to be considered in order to determine the true cost and more importantly, that new units of measurement would need to be created to track all of the value being created and transferred. However, it’s quite conceivable that deals like this are still being negotiated under old, transactional models for value, and that the units of measurement are one-dimensional and equally old fashioned.

Sadly, I think the latter is much more likely to be the truth. Most relationships in business are still created using completely obsolete frameworks and units of measure. More often than not, the measurement chosen has no relationship with the desired result, as is the case with creative companies charging by the hour, and actually works against achieving the real goal.

When contracts are created around a framework like this companies lose in two ways. They don’t get the results they really want, nor do they get all the other value could be realised through looking at their relationships in a more holistic way.

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