Building a Lasting Relationship with your Financial Partner

At several points in the career of a coach, they will encounter a client who is experiencing cashflow challenges, or difficulties in receiving approval for credit. These challenges can easily obstruct the client’s progress towards business and personal goals. But could those challenges be reframed by the coach? Michael Hegarty is a coach and a Qualified Financial Adviser and proposes a different point of view.

“To blame provides us with an escape mechanism to make ourselves feel better when something doesn’t work out the way we expected or wanted.“

There is no such thing as good feedback and bad feedback.  Feedback is as it is, Feedback!

As businesses in Ireland, SMEs rely heavily on Financial Institutions to finance them.  We rely on our banks more than our EU counterparts as a primary source of funding.  That being the case the responsibility must rest with individual business owners to ensure they have a robust relationship with their bank. The common view is the bank is a public service provider with a social responsibility within communities.  That’s an argument for sure.  But it’s an argument for another day.  The reality is banks are profit oriented institutions.

When we think of banks, what comes to mind?

In my experience, any conversation about banks, or banking relationship will invariably include some level of frustration, resignation and/or anger from the business owner.  However, if the conversation centres on an individual bank official, then chances are people will have a different view.  Often, our perception of banks is swayed by our individual relationships with staff within the banks.  During the recession, I couldn’t but be struck by the number of times customers told me they would have left the bank for a competitor institution, were it not for a staff member, including myself. (It also struck me, where would they have gone?  It’s a considerable process to move banks).

We, as business owners, must take responsibility for our actions and that includes fostering strong and productive relationships with all our stakeholders.  If we consider the paragraph above, relationships are between people, not institutions.  This is the most important point.  Too often we blame circumstances, blame other factors for our results.  The fact is we must start to take responsibility for our own outcomes and results and stop allowing ourselves blame external factors or events if they do not materialise.  To blame provides us with an escape mechanism to make ourselves feel better when something doesn’t work out the way we expected or wanted.  However, our results will not change while we maintain this mindset, and it’s the same with our banking relationships and our efforts to adequately finance the business.

Jack Canfield, author of books, including ‘The Success Principles’ introduced me to this formula,

E   +   R   =   O

(Event   +   Response   =   Outcome)

The idea behind this formula is that every outcome we experience in life is a result of how we responded to an earlier event or events in our life.

For example; if it rains (event) and we remain out in the rain we get wet (outcome).  If it rains and we take shelter, we remain dry (different outcome).  As you can see, the rain is the event and our varying responses determines our outcomes.

In life too often, we mistakenly take the approach of blaming the event for our outcomes.  We blame the weather, our governments, our health system or, in this case, our banking system.  However, the reality is, it’s the same banking system for everyone.  Everyone experiences the effects of the banking system.  But everyone is not in the same position in terms of the success they have experienced.

“If we want to change the outcomes … we need to change our responses [and] continue to change the responses until you get the outcomes you desire.”

What is the cause of the difference?  Different Responses!

If we want to change the outcomes we experience, then we need to change our responses to the events in our lives.  And you continue to change the responses until you get the outcomes you desire.  We must actively seek out the banking personnel we can work with and we build relationships with them, the same as we build relationships with our suppliers, customers, accountant or our solicitor.

In coaching, the C.I.A. tool helps illustrates this point for me.  For each individual situation you are challenged with, asking yourself the following questions brings about more clarity to the situation and allows for better decisions:

  1. What aspects are you in control of?
  2. What aspects can you influence?
  3. What do you just have to accept?

If you are struggling to access banking services your business requires, if you have nobody in your local bank with which you have a relationship with, or have a relationship which is not serving you, ask yourself those questions.

Afterwards, when you reflect on the outcomes ask yourself, “What did I learn from the situation?”

We take learning from every situation, either consciously or unconsciously.  If we become more aware, we expand our learning much more.

By changing our attitude to our banking partners, we open new possibilities for ourselves and for our business.  To proactively seek out new relationships and (perhaps more importantly) to take the responsibility to cultivate and grow existing relationships not only serves us in our business, but it projects us as being pro-active, as being positive, as being somebody who is successful and who gets things done, all positives in the eyes of a bank official we may want to work with in the future.  You also challenge the other party to bring their ‘A’ game to the table by your actions.

Our priority to build our relationship does not begin when we require services from our bank.  It begins much beforehand.  Ponder the following questions:

  • Have you a satisfactory existing relationship with your financial partner?
  • Do you know how to access banking services you require for your business?
  • How does your responses (either positive responses or negative responses) to the 2 questions above serve you in your business today?

In my coaching sessions I spend a lot of time with clients working on their future goals. The GROW model is a system of questions which I use to help clients clarify what they want and how to go about getting them.  The acronym GROW stands for GOAL, REALITY, OPTIONS and WILL. I focus not just on the goal early on, but also on their current reality through a series of questions.

For Example:

  • How is your current reality serving you?
  • What is really stopping you?
  • What have you done about this so far? What were the results?

You see, when we, as individuals identify what’s important, we will do what it takes to achieve it. With focused action, we are very powerful.  The banking relationship is perhaps the most important relationship of all.  Without the bank many businesses would not have the financial capacity to remain trading.  We all know the little saying that “Cashflow is King.”  It’s not necessarily profit which will close a business but the inability to pay its creditors, it’s bills.

So, how can we change our views regarding our banking partners?

We could;

  • be proactive about building a relationship with our local bank manager, business manager
  • invite them to our business (A bank manager will welcome this opportunity)
  • discuss our business plans and aspirations with them
  • ask them their advice on what services we require or that would enhance our business

How to view a negative response from the Bank

Another area commonly discussed in coaching sessions is business owners attitude to negative outcomes.  During my banking career I have given clients negative responses to applications and requests.  Many people are not comfortable receiving negative responses and often perceive the response a reflection on them personally.  When I coach clients in this area, I often ask them to reflect on times when they received a negative response to a request and how it made them feel.  I then ask them to try to view the matter as ‘feedback’.

If we were to ask ourselves, “what is the feedback here?” would our view of the information change?

There is no such thing as good feedback and bad feedback.  Feedback is as it is, Feedback!

Joe Schmidt, Manager of the Ireland Rugby team said,

“Feedback is fuel for a team, both positive and negative.” 

As a coach, I teach my clients how to take a step back and view their situation from that different perspective.  This allows them to view the information they receive from a different context – as feedback.  When we step back from a situation, very often we can create that different perspective, which helps us deal more productively with the information we have received.

For example, if a bank rejects an application to finance your business, this is feedback.  If we, the business owner, view it as such, we will also realise the bank is one of only a small few organisations who can conduct a detailed business appraisal and give you definitive and constructive feedback on its weak points and the risks and challenges it faces.  To have this same analysis carried out by independent consultancies, I suggest, would be expensive.

Another question which leads from this topic is,

“How could I have mitigated against this situation arising in my business?”

This is the key question which closes the loop in this discussion.  To answer this question, the owner must be aware of the weaknesses of the business.  To become aware of the these he must have submitted the application and be declined, as in the scenario above.

However, if he had a strong relationship with his key financial partners, keeping them informed of his plans and aspirations for his business and his relationship bankers are aware of his particular business, then he could be ahead of the curve – aware of the weaknesses and challenges faced by the business through that relationship.  And that would have given him the advantage to have moved to have identified solutions for his business and removed the risks and weaknesses or, if not removed, mitigated their potential threat with a few counter measures.  And avoided the disappointment (and perhaps the dent to his confidence) of the declined application.

In other words, a strong active relationship with your financial partner moves forward the timing of the feedback on your business to allow you get back in control of and direct your own future!

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