In this episode, we explore one of the most powerful tools ever created, the Relationship Agreement. This four-step tool is so easy to implement at work or with our family as it is effective. To better understand the Relationship Agreement tool, I share with you some examples of how it helped me solve professional and personal situations for years.
Steve Shallenberger: Welcome to the Becoming Your Best podcast, wherever you may be today. We are so thrilled and honored, and grateful to have you join us today. This is Steve Shallenberger, your host. And the fact that you’re listening in says so much about you and your desire to grow, improve, and to become your best. So, thank you for joining in.
Today, we talk about a process and tool that can enrich all of your relationships, whether they’d be professional, family, or specific projects, or hope for events. Isn’t the spirit of becoming your best magnificent? It’s a spirit that inspires and motivates us to reach for our individual and collective best.
To illustrate how powerful the principles of becoming your best are, I’d like to talk about airplanes to start off our show today. There’s a novel subject, right? One that we love, dear to our hearts. And during World War Two, bombers or fighter pilots would often return to their base at night where they couldn’t see or in bad weather. And in order to get back safely, the bombers had radio personnel on board to listen to radio beacons. And there were different types of radio waves. So, some were 360 degrees that they could hone in on so they knew where the direction the base was. And others were a direct line radio wave one on one side of the runway and the other on the other side. And these were direct line radio waves, and if you can imagine this going straight out. It was interesting because these tools on one side had one frequency on the runway, the other side had a different frequency. And these tools helped the radio technicians and pilots to locate the base and line up on the runway. Now, an interesting thing would take place when the plane was lined up in the middle of the runway; as the two direct line beam radio waves came in contact with one another, they provided a steady signal versus an intermittent signal on each side of the runway, which was on slightly different frequencies. But it was this solid signal that allowed the pilots to line up straight in the middle of the runway and they knew they were on the money, they could land safely. Well, what has always been amazing to me is that these radio beams were 100% predictable, and they worked every time. And the radio person, the pilots, could count on them and allowed them all when they understood the radio signal to line up on them and arrive safely.
Well, this is the way it is for the Principles of Becoming Your Best – the 12 Principles of Highly Successful Leaders are 100% predictable, and they will help set you apart from everyone else in being able to realize your best. These principles are timeless and universal, and they help each one of us to have greater happiness, health, relationships, and prosperity. And the same thing happens with the teams that learn and apply these Principles – powerful Principles such as Never Give Up, Be True to Character, Lead with a Vision, Live the Golden Rule, Be an Effective Communicator, Live in Peace and Balance, Innovate Through Imagination are just a few of these 12 Principles that produce these kinds of wonder in our lives.
So, as we’ve taught the 12 principles of Becoming Your Best in the United States and around the world, we’ve also provided other tools to be of help to you as you apply these Principles and help us to become our best. Tools such as the Continue, Start, Stop Sheet – we’ve actually done a podcast on that. It’s one sheet, put in three words on it: continue, start, stop. It’s a feedback sheet you can give to anyone: a whole team, an individual. It can be anonymous, by the way, unless it’s an individual. But if it’s a team, you don’t need to have a name on it. What things do you want us to continue doing that work well in this organization? Do you like them? What kinds of things do you want us to start doing that we’re not doing today that you think would help us to be more successful? And what things should we stop doing that don’t work well? I love this. I’ve done it with our children and wife, but I’ve certainly done it in work and it’s inexpensive but really accurate. You can do it in small teams or large, the feedback is immediate. That’s a great tool.
Another tool is the External Environment Analysis. And that particular tool, you just draw a circle on a sheet of paper, and you or your organization are on the inside of this circle. And then what you can do is just ask to yourself, think out loud, “Okay, what are the threats or opportunities that are in my life or in my business?” And then just, for example, COVID continues to be a big threat, competition is a threat, government policy could be a threat, health could be a threat. So, these are examples of things that you want to think of, and you just brainstorm and get them all down and then rank them; what are the top three threats? And then what can you do to have a contingency plan? Or if it’s an opportunity, to develop that opportunity. That’s another tool. Great tool. I do that two or three times a year and it helps me think outside of the box and be prepared for things that could happen.
Another one that we really like as a tool is the Trust Meter. It’s an imaginary gas gauge, if you will, with an empty and a full that resides in your chest, your heart. And you can look at any relationship and say, “Where is it?” With empty being bankrupt, essentially. Full being that there’s high trust. What you want to do is you’re going to unilaterally just assess where trust levels are with everybody. Because the higher the trust, the better the relationship and the easier to solve almost any problem. But the lower the trust, the more difficult to solve some of the easiest problems. And once you see where the trust meter is, then you can unilaterally do things to put that trust meter back up to full. It could be with a customer, it could be with a work associate, a spouse or a partner, a significant other, a child. And then you go to work. That’s what sets you apart from others as you exercise leadership.
Another one is our new book, how to Do What Matters Most, which helps you know the Whys and the Hows of how to develop a personal vision and how absolutely transformational having a personal vision is. How to develop annual SMART goals and how do we do our best this year? What does it look like? And then, where the rubber meets the road, pre-week planning. And of course, we have the Becoming Your Best Planner to assist you in helping you do that.
We also have the new Google extension or Outlook extension that allows you to do pre-week planning electronically. You can put your vision there as an extension of Google and it integrates then your pre-week planning with your electronic calendar. These are all things that help you to become more effective. They have a higher degree of efficiency, to be more at peace, and confident, and more successful, personally and professionally.
So, the tool and resource that I will dedicate the rest of this podcast to, today, is called the Relationship Agreement. And so, there is great power in the Relationship Agreement. And I’d like to just give a little background on this. And, as you commit to becoming an accountable individual, you can lead your organization with greater responsibility, clarity, and, ultimately, success. No matter where you are, what’s important is that you focus on your sphere of influence, and that will carry over to others. In my experience as a leader of several organizations, I’ve used this wonderful tool, the Relationship Agreement, and it does increase accountability in your organization and your team. It will also increase your overall happiness. It’ll help you sleep better at night and probably the happiness of those who work with you and live with you. One of the primary reasons for workplace frustration is that employees don’t really understand their responsibilities or what’s expected of them. And this can lead to frustration from the perspective of both the supervisor and the employee. So, setting clear expectations can lead to increased accountability and a clear understanding of what is to be accomplished. And this can be done with employees, customers, and even your children or family members.
Now, what’s nice about this is that it’s something that you can control. I use the term Relationship Agreement to describe this document, which can help prevent miscommunication, misunderstanding. I’ve used it with my sons and daughter when they were teenagers, and whenever I had a project for them to do, or whenever they came to me with a request, and I’ll just describe a few examples a bit later here. We also use it with our employees and our businesses today, actively. And having a written Relationship Agreement helps avoid misunderstandings and sets clear expectations for both parties. And if there’s conflict, it’s easy to refer to the Agreement. The feedback from others is that this has been a remarkable tool in their organizations and in their own lives because of the way it helps both parties eliminate confusion.
Relationship Agreements are sometimes referred to as a psychological contract or a win-win agreement. So let’s take a look at the four elements that make up the Relationship Agreement. The first element is what is the vision? So, the vision clearly describes the desired outcome of the relationship. And this puts everybody on the same page and inspires motivation. The second element is what are the reward systems? When you specifically spell out the type of compensation, satisfaction, or other types of incentives that the employees will receive, you show them what’s being done for them and they have a greater appreciation of it. And sometimes it’s not just the hourly compensation or performance compensation, there are many other aspects that have great value for employees. The third element is what are the expectations and guidelines? Well, in this section, you clearly describe what is expected, and the guidelines or standards. And this is also the section where any dates would be outlined along with what’s expected on those dates. And this is also the place to describe any watch-outs or no-nos. In other words, “We do not tolerate dishonesty”, and you’re very clear about what we tolerate. “We don’t tolerate people yelling at one another” might be another example. “We solve things together” – even if they’re complicated, we still go to work and we’re more effective working together than we are at each other’s throats. So, we describe that, right? And we do it from the perspective of the supervisor and the organization. This section ensures that the employee clearly understands what you are looking for and how to be effective in the organization. And the fourth element is how is accountability established? And this is a great place to decide when progress on goals and other important milestones or projects should be reported. And this is where we take time to clearly describe the accountability process – how it works. And each organization may have a slightly different approach to this, but it gives you the opportunity to have everything on the table.
Well, so now you can take a moment right now to think of someone you know who could benefit from a Relationship Agreement with you, whether it’s your child, an employee, or a service provider. Try creating a Relationship Agreement by just asking these four questions: Number one, what’s the vision? Number two, what are the reward systems? Number three, what are the expectations, guidelines, and no-nos? And number four, how is accountability established? So, those are really the elements of the Relationship Agreement. This is a powerful tool and I encourage you to consider using it with your teams and your direct reports. And if you happen to have children and they’re doing a job around the house, try using a Relationship Agreement. This can be a highly valuable tool for any leader.
We’ve used this for decades, really, in our various companies. And I have heard great feedback from both employees and supervisors. It has reduced workplace frustration for all involved and increased productivity because of the accountability and clear examples that are built into the organization. So, let me just give a few examples of this. I mentioned we’ve used it in our organization for years and years. We do evaluate it; at the end of each year, we go over the win-win, we create a new win-win for the next year, and just be sure we’re all on the same page.
I remember about 20 years ago when we had a wonderful division manager by the name of Jerry and we were in a situation where I was taking over responsibilities to work with Jerry. And Jerry is very capable, he had been with the company for some time. However, as we went through the year – he had productivity compensation on different revenue streams – and he’d say, “Oh, you didn’t include this. Oh, we didn’t include this. You gotta include this. I’m not getting paid this.” And so at the end of the year, it was driving me nuts. And so what we did is we did a Relationship Agreement. And in it, we listed what the vision was, what the reward system was, and we listed every single stream that would contribute to his compensation. And then I asked if there were any other streams? And he said, “No, I think that captures it.” So, what we did is we said, “This is it. This locks it in. There’ll be no longer streams considered during the year, they’re not going to come up.” And so what’s happened was just amazing; all those discussions were taken away. Now, we just go to work, we focus on getting the result that we have in mind. And it’s been amazing. I still work with Jerry, he’s an awesome fellow, and I appreciate the enormous contribution he makes to our organization.
Our son, Steven, was an excellent skier. He still is an excellent skier. And when he was about 16, he came to me and he said, “Dad, myself and a friend would like to go to Alaska to do helicopter skiing.” And I’m filled with panic right off, I’m thinking he’s gonna die. He’s inexperienced. He’s never been to Alaska. I had not been to Alaska, and I’d just heard things about helicopter skiing. But he was an outstanding skier. And so rather than just saying no, I pulled out the Relationship Agreement. And we identified what the vision was. Now, remember, this represents the vision of both parties. The vision was that he would have a great experience that he would remember for the rest of his life. He’d have the thrill of skiing the peaks and mountains of Alaska. Well, my vision is that he was able to go and come back without any injuries or death. And so, that was the vision. Then we said, what are the rewards? The compensation. Well, what we said is we had the cost of it, what it would cost, and that I would loan him the money, and that we figured out a way that he could repay a portion of it. We also said you would have the satisfaction of doing this – that was the reward system, we’d have higher trust with one another. You’d have the chance to demonstrate trust. And then we got to the guidelines and the no-nos. And we said, “Okay, here are the things that have to take place. We’re going to do a full and complete background check on the event operator, those who operate the helicopters, their safety record. And that’s going to be clear. We’re going to call the ski patrol and the state division that supervises the operators, and we’re going to look at the safety records of the industry. The other thing is that you have to exercise safe habits and follow the rules and that you had to have good standards while you were there.” And so, we went through these things. We talked about the no-nos, and that there would be no alcohol – all these kinds of things that we outlined. I didn’t think they would be there in the first place. But then we said the accountability was that we would capture and talk about these things. We’d go over the weather conditions before he’d left. And so that was the Relationship Agreement. And as we went through it, I came to a feeling of peace that he could do this and be safe. And he did too. It worked out. And now, all these years later, 25 years later, he went to Alaska with his friend, Scott. They had an extraordinary experience. Till today, he says, “Dad, I still can’t believe you let me go.” Well, it wasn’t just an impulse thing, was it? We had a Relationship Agreement that made it work.
The same thing happened when he wanted to get his pilot’s license when he was in high school. And when we got down to the guidelines, we said, “You have to be in by 11 every night during the week or 10 every night during the week. On the weekends, 11. You have to have a clean room. You have to have good grades. We’ll help fund this. You have to follow the pre-flight checklist on every single flight without fail – which means you check the gas, the gas quality, the operation of the aircraft – all of that.” Once again, it worked. We did the same thing with Rob. And these are great experiences that allow you to get what you want, and they’re able to get what they want.
Our grandson, Tanner, contacted me last week. And three and a half years ago, I got a Tesla X for safety reasons, really, more than anything because I’m blind in my left eye and the Tesla is pretty advanced. I was able to write off most of it because of the tax credits and I could use it for business because of the depreciation. So, it became reasonable. Well, it’s a great car. I’ve had it for three and a half years now and I’ve loved it. And Tanner said, “Grandpa, I’m going to prom.” He said, “Do you mind if I use your Tesla?” Tanner is really responsible. He’s 17 years old. I mean, he’s still a teenager. And there’s a big temptation, if you’re on prom, to really get that thing going. So, I thought about his request, and his parents said, “You don’t have to do this.” And actually one of them said, “In our family with my in-laws they’d let them use the very nice car.” I think it was like a Ferrari or something – out of my league, I think, for the prom, and he got in a wreck. So, kind of interesting, so I thought, “What am I going to do?” In the next moment, I said, “Yeah, let’s just set up a Relationship Agreement.” I set up the vision. He wants to have a great time. And I want him to have a great time, but I want him to have a car that comes back in the same shape that he took it out in. And the reward system was he would have a chance to demonstrate that he’s responsible to me and that that would bring him a sense of pride. And that as he does that, he and I have greater trust together. And then we went through the guidelines, he’d have to keep the driving laws. And he could show her a couple of times how fast it goes – it goes from zero to 60 in three and a half seconds. I said, “You can’t do it in a neighborhood. Find a safe road where you can do that. But that’s it, you can do it once and you got it. And then you have to drive normally.” So, we went through it. And the accountability is that we would both have to agree to this and he’d bring it back. So, I sent it to him, and I said, “Can you agree to these things?” He said, “Yes.” So, now we’ve cut the deal. He gets the car tomorrow at 3 PM. And my guess is he’s going to have a great experience, that he’ll never forget. My guess is he will return the car in the same condition he took it and have a great time. And we’ll have more trust. We’ll fulfill the terms of the Relationship Agreement.
I had one time a woman, by the name of Sally, attend one of our breakthrough leadership courses – it’s a two-day course in the Mountains of Utah, near Park City – with her husband. And as we went over the Relationship Agreement, we talked about all these work examples, division managers, CEOs that used it – that they used it, we used it with CEOs – and also family use. And she said, “I kind of feel sad.” She came up afterwards “Because, for the last three years, my daughter has asked if she could do a humanitarian project with a group in Central America. And each year I’ve told her no. ‘No, you can’t do that, you’re too young. No, we can’t afford it. No, I’m worried about your safety.’” And she said, “I will never say no again. What I’ll do is develop a Relationship Agreement and see if we can come to terms, and then it’s something we do together.”
And that’s the whole power of this Relationship Agreement is it’s something you do together. And if there’s a problem, you bring out the Relationship Agreement and you solve the problem together. You’re working side by side rather than some type of an adversarial type relationship. It’s so much more productive.
So, there you have it, my friends. As you reflect on those you associate with, as you contemplate your work or family environment, if someone comes to you with a special project or request you now have another tool that will provide greater accountability, clarity of focus, and a framework to bring out the very best in people and situations.
Thank you for being with us today. We’re so grateful to associate with you and wish you the very best.