Both romantic and business relationships tend to progress through increasing levels of intimacy and vulnerability, until one of two things happen:
fears of abandonment or enmeshment become overwhelming to one or both of the people in the relationship, or
Opportunity costs for staying the exclusive aspects of the relationship become too great (e.g., a better job offer, increasing desire to seek new experiences),
and that’s when the relationship has to change. Sometimes, the relationship can go backwards to a less intimate level and stay constructive there, but when there is nothing outside the relationship to bind the two together — e.g., kids, work, or shared financial & legal interests — it’s rare for a relationship to go backwards in a constructive way.
Understanding the status of your relationships may help you from unconsciously progressing them past the point at which they may not survive, so I’ve created this guide to the three broad categories. In increasingly levels of intimacy and interdependence, they are:
transactional
reciprocal, and
personal.
Transactional relationships…
… are those in which the terms are made explicit, and there most of the time there is little, if any, expectation of continuance. For example, when you are checking out at the grocery store cash register, the cashier might ask “How are you?”
But cashiers aren’t asking you because they have some deep, abiding interest in your well-being. Your relationship is transactional, which is to say that you have an explicit understanding of what each of you is expecting from the other.
You are expected to hand over your credit card, and the cashier is expected to process your payment in the correct amount and help bag your groceries.
After that, you’re done with one another.
When we buy supplies, materials, parts, or components online, we typically engage in a transaction in the context of transactional relationship. We pay. They provide.
That’s it.
Communication in a transactional relationship must eventually address questions associated with the details of the transaction, such as: “How many? What size? What voltage? What length? What rate?” The style of these communications may be direct or indirect, polite or rude, friendly or hostile. In a transactional relationship, these issues of style are secondary to the transaction, and more agreeable terms might be negotiated when you remind yourself that the purpose of the communication is to complete the transaction.
Digital markets are perfect for transactional relationships. For example, you don’t need to know a thing about a seller to buy from them shares of stock on the New York Exchange. You only need to know the quantity and price of your bid, compared to the shares on offer.
The genius of EBay was to create a digital market that minimized the problem of having to know the trustworthiness of the seller. It created a place for millions of inexpensive transactions based the product description and price of used goods, rather than strength of personal ties.
Banking has also become a digital marketplace.
No matter how much the banking ads talk about “relationships,” the fact is that you can now borrow vast sums of money for the purchase of homes or cars — without ever meeting in person the people who lent it to you.
Lending and borrowing all happens on the Internet, and it’s all driven by credit score algorithms, because that’s the way transactional relationships work.
Even though some transactional relationships persist over time (involving multiple transactions), the nature of a transactional relationship is that it focuses on the explicit details for the transaction.
Reciprocal relationships…
… rely on expectations that are not made explicit. The economic Theory of Reciprocity boils down to this:
In reciprocal relationships, people will reward kindness and punish selfishness.
Because the terms of reciprocal relationships are not made explicit, the parties must rely on contextual cues to interpret and communicate expectations. There may be strong cultural expectations, but these are norms, rather than rules. Without the explicit terms of a contract or transaction, reciprocal relationships require being aware of social and interpersonal signals, their interpretation, and the capacity to formulate responses to those cues that align with relationships goals (e.g., positive or negative).
Most of this happens so fast during a conversation that we’re unaware of how we process and respond in reciprocal relationships. Nonetheless, we sometimes misjudge the kindness (or selfishness) with which we have been treated, and thus misjudge our relationship. In those moments, we can find ourselves regretting our commitments, or becoming more explicit (i.e., transactional) in our relationships.
Reciprocal relationships are based on shared expectations that serve self-interest, even when those expectations lack specificity. Because there is typically a time delay between offering a kindness and receiving one in return, reciprocity requires greater trust, or tolerance for risk of loss.
The best illustration of the difference between transactional and reciprocal relationships may be the opening scene from the original Godfather movie, back in 1972. It is a remarkable scene, in which the Godfather (Marlon Brando) refuses a transactional relationship, to create an invitation for something more meaningful.
Notice how the Undertaker makes an transactional proposal, to pay the mafia to kill the boys who attacked his daughter.
The Godfather is offended — not by the proposal, but by the idea that a relationship with him could be purchased. He points out, “You don’t offer friendship.”
The undertaker redoubles his appeal for a transacation.
“How much shall I pay you?” he asks.
Instead, the Godfather guides them towards a reciprocal relationship. He reminds the Undertaker of their shared, albeit remote, familial ties that suggest a social expectation of reciprocity. He makes clear his willingness to forgive the undertaker’s previous violations of these familial norms. And he explains what outcomes the undertaker can expect from a closer relationship.
However, to minimize the possibility of a misunderstanding, the Godfather explains the very nature of reciprocity:
“Some day, and that day may never come, I will call upon you to do a service for me. But until that day, accept this gesture as a gift on my Daughter’s wedding day.”
While it is clear that the Undertaker shall remain in the Godfather’s debt, there is no explicit quantitative measure of the debt, and no time table for its collection.
In reciprocal relationships, people “give” one another things in ways that may build a closer relationship. However, there is no enforcement of the reciprocity, outside the power each party has to create positive or negative consequences for the other. Should one party lose that power, they have little recourse and no appeal to contractual obligation.
Personal relationships…
… extend one’s own sense of well-being to include others. That is, when you’re in a personal relationship, you include your partner’s well being in consideration of your own.
We often like to believe that we form personal relationships with our closest friends and lovers. However, the test of a personal relationship is only found in the most troubled times.
Ask yourself, “What has my Lover been willing to risk in their own well-being, in the interest of mine?” and maybe the answer will surprise you.
When one party holds the expectation of a personal relationship, only to be treated as if they were in a reciprocal or transactional, the unmet expectation is likely to create feelings of betrayal.
The classic, “Frankly my Dear, I don’t give a damn,” from Gone With the Wind is a direct rejection of a personal relationship, because caring about the other’s well-being is what defines a personal relationship.
Up to this point, I’ve been writing about business and personal relationship as if they were separate, and many people advocate to keep them that way. However, the separation is rarely absolute. For example, it is common for organizations to describe themselves as “family.”
There are two problems with the familial approach in business:
The first problem with using a family metaphor for your business is that employees have different family backgrounds. Some of them include abuse, abandonment, neglect, exploitation, and acrimony. When you invite business companions to think of themselves as “family,” you may be unconsciously inviting them into dysfunctional models of family relationships formed by their childhood trauma.
The second is that the “family” cliche invites unwelcome inferences that do not apply to relationships within a business organization.
On the other hand, everything we know about human motivation suggests that working for an hourly wage is a demoralizing, dehumanizing, and demotivating transaction that won’t achieve the level of creative energy required of an innovative, learning organization. Because the well-being of business is closely tied to the well-being of employees, it seems natural to describe their relationship with personal metaphors, and the progression from transactional, to reciprocal, to personal is the same.
For example, in the beginning of a business relationship, transactional considerations dominate. When these prove to be mutually beneficial, the business relationship may progress to reciprocity, in which investments in training and professional development create the expectation of future returns, even when that expectation is not explicit.
Sometimes that development creates a transformation in the capabilities of the employee, making them more valuable to the company. At that point, it behooves the employer to revise their compensation upwards, or risk losing them to a competing employer.
Nonetheless, in some companies a closer relationship develops with some employees who become vested in partnership, or an equity stake. While their ownership binds them closer to other owners in a transactional way, it can’t help but also bring them closer in a personal way — because the mutual interdependence of partnership demands consideration of well-being of all the partners.
What are you willing to risk to create the relationship you seek?
The difficulty with personal relationships is the exposure and vulnerability that they create. For example, when we migrate from a position of independence to interdependence, we may feel some loss of autonomy, of self-determination, or of control.
That can be threatening.
Including another’s well-being in your own requires putting something about yourself at risk. It does not require that we risk everything — only that we examine our values closely enough to understand what we might be willing to give up to strengthen the relationship.
Customer Relationships
In business relationships, managers must decide what in their own short-term financial self-interest they’re willing to sacrifice in favor of the relationship. Not all customers are worth keeping, but to honor warranties and performance guarantees, businesses must accept resource risk to maintain good relationships. In many cases, the unsolicited testimonials that customers provide make the risk more than worthwhile.
Romantic Relationships
In romantic relationships, the risks are emotional and reputational (as well as financial). Sometimes,two people will form relationship agreements — which is a way of making explicit (transactional) the expectations in the relationship.
Relationship agreements can provide some reassurance against anxiety and protection against hurt feelings and misunderstandings. At the beginning of a relationship, when two people are less likely to be vulnerable, relationship agreements can reduce the perception of risk, allowing more frequent interactions.
However, like prenuptial agreements, relationship agreements can be romance killers.
At the start of a new romantic relationship, we often harbor fantasies of speeding to more deeper levels of intimacy and commitment. Explicit relationship agreements are an admission that the relationship is at a transactional stage, and that admission can kill the romantic idealization of a new crush.
Partly for this reason, relationship agreements are too often “implicit” — as in, there is a mutual expectation of monogamy, or exclusivity, even when the couple never had an explicit conversation about it. The implicit nature of the agreement is consistent with the romantic ideal of a personal relationship in which each person includes the other’s well-being in their own — i.e., love.
When trust between the couple breaks down, conflict becomes destructive and the relationship goes backwards. That’s why divorce agreements are more explicit than marriage agreements — because in divorce, the relationship has to go backwards.
Know your relationship
Only by knowing your relationship can you avoid the pain of overestimating your expectations of others. For example, because a company is a group of companions, it is defined by relationships — so it behooves you to know what sort of relationships your company forms: with employees, partners, customers, and suppliers.
Nonetheless, businesses are typically organized around transactional relationships that do not meet our human need for intimacy. As human beings, we are hard-wired for companionship. Hundreds of thousands of years of human evolution have primed us to co-exist in close tribal relationships. At some limbic level, we seek the safety of mutual self-protection that can be found in reciprocal and personal relationships, and grief when we lose those to whom we felt that intimacy.
Mapping out for yourself what type of relationship you are seeking, with whom, and how you might audition them for a more intimate role in your life might help you extend healthy rewarding relationships without progressing them prematurely to a state in which they fracture from unmet expectations.