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The Most Important Currency

In January 2014, thirty-year-old Gerald Cotten, owner of Canada’s largest cryptocurrency company, QuadrigaCX, died suddenly while on his honeymoon in India. In his sole possession were the passwords to access all of his users’ funds, a total of approximately $190 million Canadian dollars ($145 million US). His colleagues initially reported that the funds were inaccessible due to the missing login information. Business Insider pretty much summed up the situation with its headline, “A crypto exchange can’t repay $190 million it owes customers because its CEO died with the only password.”1

The story didn’t end there, though. A few weeks later, a court-appointed auditor obtained Cotten’s laptop and other devices and determined that the digital wallets that supposedly contained millions in bitcoin had been quietly emptied eight months before Cotten’s death. It also discovered that QuadrigaCX didn’t have a basic accounting system in place, and that Mr. Cotten had sole and total access to all monies invested. At the end of the audit, investors were left with no funds, no answers, and no easy path to pursue repayment.

Like many cases of financial mismanagement and fraud, we may never know the full story of what happened or where the money went. But if you’re like me, you’re probably wondering how $145 million can be stashed—and lost—from “digital wallets.” But my point with this story isn’t that we should avoid cryptocurrency; it’s that even an invisible currency can have great value. Bitcoin and other cryptocurrencies may be intangible and hard to understand, but there is no denying they have a very tangible value and a direct, wide-ranging effect.

The same could be said of another invisible “currency” that all of us have access to. This currency is not stored in digital wallets or tracked on Wall Street, and it would be difficult to put a monetary value on it, yet it has a profound and far-reaching effect on our success in just about every area of life. It’s the currency of relationship.

Relational Equity

The concept that relationships have a value is sometimes referred to as relational equity. Mohanbir Sawhney, a professor at Northwestern University and a noted management consultant, defines relational equity in the corporate context as “the wealth-creating potential that resides in the firm’s relationships with its stakeholders.”2 In other words, the connections we have with people are assets, just like cash on hand, stock, inventory, real estate, or other tangible property. They might not be listed on our balance sheet, but they are assets nonetheless.

Sawhney continues, “Competitive advantage no longer stems first and foremost from the firm’s ownership of physical assets, as has generally been the case since the dawn of the Industrial Revolution, but rather from its ability to build and leverage relationships with customers, partners, suppliers, and employees.”3 His point is that relationships are worth investing in, cultivating, and protecting. Relational equity may not be easily quantifiable, but that doesn’t make it any less real than dollars or yen or bitcoin.

I think most leaders intuitively know that relationships can be valuable assets. Whether we are leading in the world of business, entertainment, church, education, sports, or just about anything else, who we know can open doors and create opportunities. So it makes good business sense to “build and leverage relationships,” as Sawhney puts it. But even though we believe relationships matter, we can get so focused on the bottom line, on growth, or on systems and strategies that we forget to make relationships one of our top priorities.

I’m not saying we should invest in people just so we can get something from them later. When Sawhney says we should “leverage relationships,” he doesn’t use leverage in a manipulative sense but rather a practical one: you need to know whom you can count on and whom to turn to in times of need.

If you sincerely invest in people, value them, serve them, and cultivate a genuine connection with them, you will receive a return on your investment.

While your main relationships (outside of family and friends, of course) will be with people directly related to your area of work or service, such as employees, clients, customers, donors, church members, and providers, keep in mind that all people matter, not just those who directly contribute to your goals. You can and should build connections with people wherever possible, even when they aren’t directly participating in your endeavor or vision.

I’ve heard the opposite from time to time, by the way. I’ve seen some people, especially on social media, who advocate cutting out of your life anyone who isn’t helping you reach your goals. That makes me a little uncomfortable for two reasons. First, it would make your world revolve around you and your goals, which is—no offense—a small world. Second, you never know who, when, or how someone will actually help you with your goals. I suspect the people who advocate cutting people out are mostly trying to avoid distractions or unhealthy criticism, and there is a place for that. We looked earlier at the importance of listening to the right voices. But don’t be too quick to cut people out of your life just because they aren’t serving your immediate purposes. They are people, and therefore they have value. To the extent you are able, strive to honor them, love them, and add value to them.

Deposits and Withdrawals

We know intuitively that relationships matter, as I said earlier, but how do we build them? How do we add value and build trust? How do we invest in people in such a way that our connection with them grows? Relationships don’t just happen. They take intentionality, work, and time. If we understand how to build relationships properly, they will withstand the ups and downs of life and the inevitable bumps in the road.

One way to think about building relationships is in terms of deposits and withdrawals. Not in the sense of reducing friendship and affection to a mere transaction, of course, but in the sense of investment. The more we put into a relationship, the more it will thrive, grow, and generate a return. But if all we do is take or withdraw from a relationship, the balance will quickly drop to zero and it will cease to be an asset we can count on.

Every leader needs to understand how to make deposits and withdrawals in the relational sphere. People keep a record, whether intentionally or not, of how you treat them; and you have a balance, whether you know it or not, that is either positive or negative. As a leader, part of learning to win with people is becoming aware of that relational balance and managing it well.

You build your relational balance when you make deposits, such as showing love, giving praise, serving, expressing loyalty, and spending time together. Relational deposits build loyalty, longevity, trust. That positive balance is what allows you to make withdrawals when needed. A withdrawal is anything that could “take” from the relationship, such as a request, a confrontation, a misunderstanding, a change, a difficult decision, or an absence.

Both deposits and withdrawals are part of any normal relationship. You won’t always be able to be a patient, wise, perfect leader—not by a long shot! But if you are intentional about building a positive balance with people, about strengthening your relationship through regular deposits, then the occasional withdrawal won’t “overdraw your account.”

My goal with my team, my employees, and even my family and friends is to always keep a positive balance. I try to be aware of where I stand with people in every sphere of my life. I don’t want to be in relational debt to anyone: I don’t want to feel guilty when I think about them, hide when I see them, or never be able to ask them another favor because I’ve used too many already. Below is a list of practical things I do to make relational deposits. You’ll notice many of them are simply good people skills and good manners, which we’ve discussed already.

Learn what means the most and speaks the loudest to people and focus on those things. Conversely, avoid letting them down in areas you know are important to them. As in everything, this is about serving people best.

Author Gary Chapman’s perennially bestselling book The Five Love Languages states that each of us has a primary and a secondary love language, or way of showing and perceiving love. He identifies five specific languages: gifts, quality time, words of affirmation, acts of service, and physical touch. His premise is that if someone attempts to show their affection to you using a different language than yours, you won’t feel as loved, and if they fail you in an area related to your primary love language, it will hurt you more deeply than it would if it were a different type of failure. Married couples, for example, often have different love languages, so they can end up hurting each other inadvertently simply because they don’t realize how deeply their actions and words affect one another. Chapman encourages his readers to identify their own language and those of their spouse, children, and others in their lives in order to better communicate love and to avoid misunderstanding.

Building relational equity is primarily about thoughtfulness and about identifying what best serves the other person.

Building a positive relational balance comes down to being aware of where you stand with people and taking that into account in your interactions with them. Put yourself in their shoes. Keep track of how well you’ve done at meeting expectations and commitments to them. You can only show up late to so many meetings before followers lose respect or your boss lets you go. You can only forget to text a friend back so many times before you come across as disinterested or rude. You can only stay late at the office so many nights before your family stops appreciating your hard work and begins to resent it. Whether you are a boss, spouse, parent, teacher, pastor, or other leader, simply being aware of the status of the relationship will help you navigate it better.

Keeping a Positive Balance

Leaders can’t meet every need and every expectation, which means we will fail people or let them down from time to time. We will also have to engage in a certain amount of correction, which is not necessarily pleasant, and a certain amount of “making” people do things that are part of their job, which isn’t fun either. Put all those things together and leaders have the potential to make a lot of relational withdrawals.

That means we need to be even more intentional about offsetting the inevitable withdrawals in order to maintain a healthy balance. On one hand, we can’t make every decision to meet people’s expectations or to guard their feelings. But on the other hand, we can’t discount the negative effect of those difficult leadership moments. So how do we keep a positive balance?

The first thing is to focus on making proactive deposits. In other words, make deposits whenever, wherever, and however you can, knowing that withdrawals will happen at some point. Regular relational deposits build a balance that permits occasional withdrawals without going into relational deficit. On the other hand, if there is a zero balance or negative balance, each withdrawal will feel far more negative because you are incurring an even greater relational debt.

To illustrate, imagine you have an employee you don’t know well. Maybe she works in another part of the building or is a couple of rungs down the organizational ladder. One day she makes a big mistake, and you realize you need to talk to her about it. You show up at her desk, explain the issue clearly (maybe even forcefully), accept her apology and her promise to change, and then leave. Was that a successful encounter? I’d argue that it probably wasn’t, or at least it was far from ideal. Not because you said something wrong or overstepped your boundaries (you’re the leader, so presumably you didn’t) or because she reacted wrongly (she didn’t either), but simply because you now have a clear negative balance with her. Her only significant interaction with you in her entire career consisted of you getting on her case for a mistake—and that’s not a good feeling for anyone. However, if you had already built up a positive relational balance with her—by complimenting her work or expressing gratitude for her role—the correction would have had far less emotional impact because it would have occurred in the context of a trusting relationship.

I’m not saying you have to butter someone up before you tell them where they’ve failed, or that you can’t ever confront someone you don’t know well. I’m just saying that the ideal approach is to be proactive about building a relational balance and developing trust, because you never know when you’ll need it.

Relational withdrawals happen for many reasons, not just correction. But the same positive balance, built by the same thoughtful words and actions, will help protect the relationship from the painful or difficult moments that come along.

The second key to keeping a positive relational balance is to apologize when you’ve failed. Apologies go a long way toward restoring balance. Unlike debts measured in dollars and cents—which are rarely forgiven—people usually welcome apologies and are quick to forgive. If they aren’t, it’s possible that something deeper is going on or that your offense is more serious than one or two failures. In a healthy relationship, both parties want things to work. That means the offended person is probably hoping you will want to make things right, too, and will respond well when you acknowledge the situation humbly.

Forgiveness is a powerful tool, and it works both ways. When you grant forgiveness to others for mistakes they’ve made, or when you request forgiveness for mistakes you’ve made, you help offset the negative effects of the error. Don’t wait for the other person to take the initiative, regardless of who is at fault—just seek reconciliation. Usually, both people are partly to blame anyway, so take responsibility for what you can, ask forgiveness as needed, and work toward a resolution.

If you have made a withdrawal for a necessary correction or confrontation, don’t apologize—you didn’t do anything wrong. As a leader, you have to have the freedom to lead, and that includes having difficult conversations and making difficult decisions. However, you can make sure the person didn’t take it too personally, you can thank them for responding well and keeping a good attitude, and you can find ways to give affirmation in other areas. In other words, even when you don’t need to apologize, you should still look for ways to offset the negative impacts of withdrawals.

The third way to keep a positive relational balance is to be intentional about paying off debt. Of course, if you had enough equity going into the blunder or confrontation or whatever withdrawal has happened, there may not be any debt; but even the strongest relationships can be rocked by offense, error, insults, misunderstandings, and conflict from time to time. As leaders, we must be aware when we have let someone down and seek to make it up to them.

Unfortunately, it often takes multiple deposits to offset one big withdrawal. If you’ve ever forgotten your spouse’s birthday, you know how hard it is to dig yourself out of certain holes. That’s because humans tend to feel negative emotions more easily and intensely than positive ones. In economics, this is referred to as loss aversion: people would rather avoid loss than acquire equivalent gains. Some studies have suggested that losses are felt twice as much, psychologically, as gains.4 That means if you have to challenge or correct someone, or you forget a birthday, or you show up late to an important meeting, or you snap at someone, or you have any other perceived failure or offense, people are likely to feel it more deeply than a comparable act of goodness. I realize that’s not terribly encouraging, but it’s reality.

Again, apologies and forgiveness work wonders. That’s the first step, but don’t stop there. Look for ways to restore, to repay, to make things right again. That might take a little effort, but it’s usually not as hard and it doesn’t take as long as you might think. People tend to be quick to forgive leaders who truly want to do right by them.

Those three things—egular deposits, quick apologies, and making things right—will go a long way toward keeping your relational accounts in good health. Over time, those relationships will become your most treasured asset of all.

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Just like bitcoin, the invisible currency of relationships has real and tangible value. But unlike bitcoin, relationships aren’t stored in digital wallets or locked behind passwords: they are in our hearts; they are seated around our boardroom tables; they are accessible by email or texting or phone calls. Some of them are living in our homes. People matter, therefore relationships matter, and they are worth investing in at every opportunity.

Key Takeaway

Invest in your most valuable asset—relationships—by intentionally and continually making deposits into other people.