Tuesday, 19 May 2020

Building and sustaining binding relationships


These are the 7 aspects of relationships that help building binding relationships. Be it any type of  relationships, in the family, within the team or in business with the clients, the 7 aspects operate effectively. If one is able to take care of these 7 aspects; the relationships will flourish.

  1. Trust: This is the foundation on which relationships are built. When this is strong the relationships are long lasting and can face forces that try to destroy relationships, formidably. But if for some reason this aspect (trust) is low, then the relation is fragile, and can crash. (cant even stand even a puff of air like small assault.)

Trust makes communication easy and effective. When the element of trust is there then even with unspoken  words, people  understand what we want to communicate. Example: Father to son, “Put off that TV, go and read your lessons”, the boy instantly obeys, does not even grumble. Trust is high. But if for some reason in the above instance the trust factor was to be low, then the boy grumbles, feels that the father wants to see some program and therefore gets him off the screen.

Trust develops on Truth. Truthfulness effortlessly builds trust. How effortlessly? Because Truth is constant and does not vary. Therefore no need to memorise it. When a lie is spoken to justify the position, then we must remember it hard, so that we don’t get caught next time. It takes courage to be truthful, but it lightens the heart instantly. It takes intelligence to create a perfect lie, but it burdens the heart heavily till the time it is lightened by the truth. 

Professionals who always speak the truth become trustworthy for their customers. But the ones who justify lies, in the name of marketing or other, loose trustworthiness. There can be compulsions to close a deal as the dead-lines are nearing. It is likely that we can be tempted to say an untruthful statement, or say a small lie, or even hide truth, or exaggerate the benefits of the product. Even a deadline can not be a justification to deviate form the path or truth. 

2) Keeping commitments: While making a commitment we can think 1000 times, but once it is made then we will have to fulfil it at any cost. Stephen Covey says, “Breaking commitments is like withdrawals from the trust bank account”. One day the account will be over-drawn. 

There is nothing like a big commitment and small commitment. A commitment is a commitment. It does not scale up or scale down based on to whom it has been made. For example a commitment made to the child in the house that while i come home today, i will buy you this toy. is as important as the commitment made to a client that the loan cheque will be delivered today evening. A promise made to the sub staff that his letter of confirmation is as important as the commitment made to the head office that the statement of outstanding will be sent to them today. 

Sometimes, people make commitments knowing well that it could be very difficult (impossible) to keep up that promise just to please the client dealing with instantly. Later on they excuse themselves with reasons on why they could not deliver as promised. But we must understand that even if the client excuses us due to his magnanimity, we have slide down in his mental screen. 

3) Understanding the individual as an individual: While on the outer, people are almost the same, but deep down there can be some individuality which need to be addressed to in a relationship. But many times we act and respond to groupings that we have mentally made. 

Examples: You can add words in the end like irresponsible, orthodox, conservative, talkative, strict, insensitive, caring, disobedient, patriotic, stingy, philanthropic, nagging, bragging, selfish, concerned etc) 

All old people are like this
This new generation is like this
Females are like this
Male population are always
This race of people are
Uneducated people are 
Foreigners are always
And so on 
Our biases are endless.

This does not help in building relationships. 

On a humorous note let me give you an example:

A young man, got married. He thought that he will keep his wife happy. To keep her happy he will buy many things for her, like jewels, electronic gadgets, ornaments for the home etc. So he decided to work hard and overtime to earn so much money. The man was always at work. Even on holidays he will find some job to do so that he can earn money. This lady was feeling being ignored. She thought this man is too ambitious. He is not a homely man. So after a few months she divorced him. This man got married again. Now he decided not to do the same mistake as earlier. So he worked limited, stayed home for most of the time. This lady thought this man is not at all ambitious, he is always staying home. When can we ever become rich? when can we buy all those things that many of our neighbours are having. So better to divorce this man. The divorce was granted. The man approached a psychologist and asked him “What is wrong with my methodology ?” the Doctor replied, there is nothing wrong with your methodology, only that you used it on the wrong person. 

4) Caring for little things: Little things go a long way in building big relationships. Small acknowledgements, small gifts, small appreciations they matter a lot. I will give you an example: Once i had a chance to meet an industrialist. He is very rich. I had an appointment to meet him along with one of our insurance agents at his office.  I was working as the CEO and MD of that insurance company at that time. We did meet him at the given time. But he had some unexpected issues which he had to handle immediately, so after seeing us, he said, i can give you only 5 minutes time. He also said that i know you have travelled a long distance to see me today. I told him it is alright sir, i can understand. But sir, you may please appreciate that the concepts of risk management can not be discussed in 5 minutes time. I may need 30 minutes to give an introduction of the philosophy. If after that you feel you need more information about it, then we can set up a detailed meeting at your convenience. But sir, i promise you i will try to make each one of 30 minutes you give me made absolutely relevant and useful to you. He hesitated as he was looking at his calendar. Then i suggested, sir if you are free this Sunday, we can meet you at any place you choose. He said, but Sundays i am busy taking my sons to football (soccer) practices and matches. I asked him are you a great fan of soccer game?. He said, not so much, but since my sons are passionate about it, i want them to shine in that. Then about our next appointment he said, it may not be possible for at least two months from now. We wished him well and took his permission to call him next month first week to schedule an appointment. I was returning to my place. At the airport i saw a CD store. I asked them if they have any CDs on football. He searched and gave me a CD of the 50 years of Brazil football. i took two copies of the same. I watched it. A great picturing of the 50 years of this football country. The scenes were engaging full attention. Then i sent the CD to that industrialist with a covering letter on how i found in him a person who was balancing his business and family nicely and added this CD could be of interest to his sons. The next day after receiving  it, he called me over phone and thanked me a lot. He said his sons liked it so much that they would have watched it 10 times by then. The he also asked that how i thought of sending this to him. I told him that i was impressed by his dedication to his family. So i thought a very very small appreciation from my side is due. So i bought it and sent him. He was very kind, and he said, come over within the next two days to see him. By Gods grace we could get to meet him and he also kindly agreed to implement our suggestions about his risk management solutions.

5) Personal integrity: Integrity means our thoughts, words and actions aligned in one straight line. In short being loyal, faithful and grateful even in the absence of a person. Sometimes we make some comments about a person who in not present. even for the sake of humour never degrade a person in relationships. One fundamental issue we must remember is that when we are speaking to a person, not jus our words get communicated, our intentions also get communicated, therefore it is correct to be correct in the heart itself. 

6) Clarifying expectations: Many times in relationships the roles and responsibilities are not clarified. This results in ambiguity. Ambiguity leads to friction. You will find this often happening in a team given some responsibilities they all together say we will do it, we will fix it, but they don’t know who will do what to fix it? and then the blaming game starts I thought that this is your job, and the other says no it is yours. Even i houses, you will find, the husband asking the wife, “This thing has been here since yesterday, why don’t you remove it? She replies i thought you will do it, or can you not remove it.” Even with the client we see this happening. Since the roles were not clarified. For example in a life insurance policy if the contracts are properly explained, along with exclusions, lien etc. lots of confusion can be avoided. Instead at times the agent says the customer, in vague terms and also assures him that he will take care of every thing. What are the changes in the personal history that need to be notified to the insurance company. What type of hazards need to be intimated, if not properly explained it leads to ambiguity. The days of grace for the premium payments, claim concession clauses and other clauses governing the contracts have to be explained properly without assuming that the client knows it.

7) Unconditional Love: This is the essence of any relationships. A relations were there is no self interests dominating. Love them for what they are, not for what we want them to be. We can categories our clients based on their contribution to our business and serve them with different levels and gadgets, even allot separate managers to take care of them. But when it comes to loving the customer there is no differentiation there. Even in families also, we sometimes expect children to be this and do that. When they do it we love them. But even if they don’t want to be that we  tell them i love you for what you are, not for what i want you to be. Whatever may happen or may not, my love towards you will never diminish. I will love you till my last breath, and if God permits even after that as well. 

We have seen the 7 aspects that build strong and binding relationships. But there is a fabric on which these 7 colours stick on to. That is called communication. Communication is that factor that will make this relationship bright with colours. Regular communication keeps the relationship going and deepens it. While some of the communication can in person with the person a major part of it can be on-line and tele communication. Frequent Client meetings in groups of various topics relevant to them, not just the ones that leads to our business but to even other topics that will add value to their lives, like parenting, health, mind management, time management etc. deepens the relationship well. There is a feeling of being useful in other than business terms also. Client magazines also help to cement this relationships. Mails, blogs, pages and channels have made communication more possible than the days when we had to physically meet to share information.

Wednesday, 25 February 2015

Wealth that grows and lasts forever Part4

WEALTH THAT GROWS AND LASTS FOREVER
PART 4
R.GOPINATH
gopinathr@go-past.com

START EARLY; REACH SAFELY
PRINCIPLE NO 3



At traffic signal posts and traffic islands you will get to see this board, “ Start early; Reach safely.” This to say that if we leave our place even 5 minutes early then we can reach our destination calmly and if we leave even 5 minutes later, then we have to take unnecessary risks of road, like speeding over limits, jumping lanes, overtaking rashly etc to make good the time lost.

The same is true in the area of finance. Starting our savings plan a few years early gives us adequate money to meet our goals and starting the same put us under the strain of looking for high yielding instruments to match up adequacy of the money available then. In the process these high yielding instruments come with varying degree of risk on the capital often resulting in the erosion of capital, the hard earned money.

Let me demonstrate this through an example:


SCENARIO 1

 Mr Prakash and Mr Atul of friends working the same company drawing same levels of income. They are identical in their ages and even the family size. Mr Atul started saving `10,000 per month from his age 25 and he kept saving the same amount every month till his age 35 expecting the plan to provide his a retirement fund when he becomes 60 years of age. From age 35 up he had family responsibilities and had to spend on their requirements.

Mr Prakash started saving `10,000 from his age 50 once his children had settled down in their lives and his target was to have fund providing him a decent retired life. If both Mr Atul and Mr Prakash had invested in a plan which yielded 8% IRR then Mr Atul will be having  `1,26,12,000 and Mr Prakash will be having `18,41,000. Even though the contribution from both have been the same.

If Mr Prakash wants to equal the fund available with Mr Atul then he must contribute `68,500 every month from his age 50, against the `10,000 every month invested by Mr Atul.

If Mr Prakash wants to keep the contribution at `10,000 level then he has to invest in an instrument that yields 37.5% IRR compounding monthly against the 8% yielding investment that Mr Atul had done for himself.

SCENARIO 2

Mr Atul starts saving `10,000 per month at age 25 and continues till his age 60 @8%, he would have got a fund of `2,31,00,000 at his age of retirement. Mr Prakash starts at age 35 the same plan contributing `10,000 per month, he will be left with `95,00,000.

If he wants to match up with Mr Atul in the fund size at retirement then he has to contribute `24,100 every month instead of `10,000 every month.

If Mr Prakash wants to keep the contribution at `10,000 level then he has to invest in an instrument that yields 13.2% IRR compounding monthly against the 8% yielding investment that Mr Atul had done for himself.

SCENARIO 3

Mr Prakash starts at age 40 with monthly contribution of `10,000 @ 8% he will get `59,00,000. If he wants to match Mr Atul’s Fund then he must contribute monthly `39,000 instead of `10,000 done by Mr Atul

If Mr Prakash wants to keep the contribution at `10,000 per month then he has to invest in an instrument that yields 18% IRR compounding monthly as against the 8% yielding investment that Mr Atul had done for himself.


putting into a tabular form:
Mr Atul 
Age 25 to 35
Fund at age 60
IRR 

10,000 per month
1,26,12,000
8%
Mr Prakash
Age 50 to 60



10,000 per month
18,40,000
8%

68,500 per month
1,26,12,000
8%

10,000 per month
1,26,12,000
37.5%




Mr Atul 
Age 25 to 60
Fund at age 60
IRR 

10,000 per month
2,31,00,000
8%
Mr Prakash
age 35 to 60



10,000 per month
95,00,000
8%

24,100 per month
2,31,00,000
8%

10,000 per month
2,31,00,000
13.2%
Mr Prakash
Age 40 to 60



10,000 per month
59,00,000
8%

39,000 per month
2,31,00,000
8%

10,000 per month
2,31,00,000
18%










There is more to follow on this topic, like the story of 4 people nearing retirement and the proportion of the risk related to the duration of postponement, so stay connected for the next issue.