August 27, 2024
Building the Other Kind of Equity
When people talk about building equity they are usually talking about stock. Who hasn't dreamed of earning a windfall through stock options or founders’ stock?
That’s great, but I’d argue there's another kind of equity that is more important for long-term career success. That’s relationship equity.
I was reminded of the importance of relationship equity a few weeks ago when I joined three former colleagues for dinner. We had a great time trading notes about our work and families. It's been more than 25 years since we worked together, but we still stay in touch and help each other out.
You can think of relationship equity as the group of current and former work colleagues who will go out of their way to help you. Over the course of a career it should grow and grow. In the long run, this group becomes the principal source of new job opportunities, referrals to potential employers and investors, helpful advice, moral support and much more.
The prerequisite for building relationship equity is doing a great job. If you are a mediocre performer, you may build plenty of cordial relationships, but those people are not going to be enthusiastic about hiring you, or referring you to their friends.
But outstanding performance isn’t enough. Relationship equity doesn’t grow all by itself. Like a plant, it needs care and cultivation to grow. That happens by consistently treating people well , being a team player, and not burning bridges. In short, you earn relationship equity by being the kind of person others want to work with and for.
Perhaps the biggest mistake people make is neglecting to maintain relationships with former colleagues. Staying in touch should be fun, and doesn't require much time or effort. Failing to stay in touch means you are squandering one of your most valuable resources.
Are you making an effort to grow your relationship equity? If not, now is a great time to start.
