Relationship Capital: A Critical Intangible Asset To Government Standing

Numerous cabinet secretaries and agency heads in the current (U.S.) Administration are overlooking…who knows, perhaps prohibited from, or have yet to sense the relevance and necessity for exhibiting relationship capital with and to 195+/- countries around the globe.  As an intangible asset strategist and risk specialist evidence of this most unfortunate reality, both interests me and troubles me!

Relationship capital in the private-business sector…generally involves building, banking, and sustaining some semblance of respectful and professional relationships with…

  • people, colleagues, competitors, clients, and customers, as well as
  • those who are – may become (prospective) customers, clients, collaborators, counterparts, and colleagues, etc..

In the U.S. government – public sector (diplomatic context), relationship capital can, and usually does vary…along continuums of dislike, trust – don’t trust, ‘trust, but verify, or merely like and respect, etc.

I hold the view that relationship capital with counterparts is…in most instances, interwoven with shades of ‘diplomatics’.  The objectives are often clear and often achievable, i.e., to build relationships which evolve around the simple proposition – probability, and sometimes imperative, that a counterpart will…

  • accept a call or inquiry, and there
  • will be a reasonable, preferably rational, and relatively even-handed and cordial dialogue that occurs,
  • regarding matters of mutual (national, global) interest and import.

Each of the above, of course, are essential intangibles to creating, building, and sustaining relationship capital.

Let’s dive a little deeper…there are 195 countries in the world today, 193 of which are member states of the United Nations with 2 countries classified as non-U.N. member ‘observer states’.

I believe it is correct to assume that each U.S. ambassador appointed and dispatched to these 193 countries…if there were that is, are obliged to play a significant role towards buffering, building, ‘banking’, and sustaining relationship capital with that country’s citizens, and its government officials.  This, I believe may well be the epitome of relationship capital!  That is, accommodating citizens and leaders of other countries, sometimes irrespective of how the latter arrived at their positions of authority and governance.

Interestingly, as of February 13, 2018, according to the American Foreign Service Association…, only 67 ambassadors had been appointed by the current administration and/or confirmed by the U.S. Senate.

That leaves 128 ambassadorships vacant…as of the date this post was published, hence little or no relationship capital being built or shared with 128 member countries of the United Nations.  One could reasonably assume, leaving ambassadorships vacant, irrespective of the reason, very likely manifests as an absence of symbolic, as well as authoritative, ‘relationship capital’ being transitioned, built, banked, and/or sustained ala substantial weakening, if not wholesale loss of institutional memory and good will.

Through my lens, ambassadors play a critical role…insofar as explaining, creating familiarity, and executing U.S. diplomacy and, as such, are perhaps, a variant of fiduciary responsibility, i.e., engage in ‘meet and greet’ outreach and serve as the immediate ‘on the ground’ articulator of applied U.S. foreign policy. After all, another responsibility – outcome of engaging in consistent, effective, and personal outreach, i.e., relationship capital, especially in an ambassadorial context, is to convey assurance, familiarity, and knowledge about the U.S. which preferably translates to developing, sustaining, and banking the very necessary ‘relationship capital’ most countries want and need.

To be sure, I am not suggesting existing foreign service officers…posted at the various consulates and embassies globally where there are ambassadorial vacancies, are incompetent or incapable of effectuating relationship capital. I am suggesting however, since January 20, 2017, there has been a noticeably different voice and tact present that lacks the very necessary pillar of consistency to build, develop, and sustain (indeterminately) the level of relationship capital that’s increasingly critical with the growing asymmetric threats of terrorism, war, and power plays.

It appears evident, that the current U.S. administration, ala its brand of relationship capital…is conducted (controlled, influenced) by the impulses of ‘west wing’ personnel and which are presumably imposed on and through cabinet secretaries and agency heads.

Consider, if you will, how (if) large, lucrative, competitive, and innovative U.S. corporations would (could) function if their relationship capital was driven by day-to-day – hour by hour ‘twittered impulsivity”…vs. a well-conceived, c-suite and board driven, consistent set of strategies. Unfortunately, I am not given to confidence of a strategic rationale or permanence currently, other than what may be compressed in 140+ character ‘tea leaf’ tweets which are routinely being executed 24/7.  To my thinking, this gives a whole new meaning to the concept of a stock exchange’s ‘opening bell’.

Insofar as a defining – providing context to ‘relationship capital’ I take a slightly different tact…by turning to a piece published in the Foreign Service Journal (January/February 2015) titled ‘Defining Diplomacy’, authored by Edward Marks, which, in my judgement, describe some dangerous pitfalls of unfiltered semantics.

  • Semantics is the linguistic (and philosophical) study of the meaning of words.  Semantics is primarily concerned with the relationship between signifiers, e.g., words, phrases, signs, and symbols, relative to their (linguistic) meaning, or, more practically, the study of how signs or symbols are used and interpreted, in this context, by others representing various cultures and histories that exceed the U.S.  This includes, sounds, rhetoric, facial expressions, body language, and proxemics, which is the amount of space that people feel it necessary to set between themselves and others, presumably those whom they are directing conversation. (Wikipedia)

Perhaps the current administration’s inexhaustible use of, heretofore social media platforms largely used by the young as their brand of communication, but not wholly impulsive, compressed to 144+ characters of jargonized language and symbols. This is a phenomenon we will or should try at least, to eventually become accustom, i.e., understand, accept, and who knows, respect. I’m doubtful of this occurring in the near term.

Mary Adams, founder of Smarter Companies and an intangible asset practitioner…, states relationship capital is one of the four cornerstones of intangible capital. It can be both an asset and/or a liability depending on how stakeholders interpret it.

Ms. Adams suggests, in a business context, relationship capital includes various kinds of relationships with customers, partners, suppliers, community, government officials, media, institutions, groups, and people who have an interest in your organization, what it does, and what it may do. All  interactions (relationship capital) involve the

  • sharing of knowledge.
  • solving of problems.
  • creation of connections, and
  • creation of brand and reputation. If ‘relationship capital’ functions as intended, it should, and generally does, create value.

However, if those responsible for building and sustaining relationship capital, i.e., it isn’t working, the ‘aspired value’ of such relationships will very likely diminish for an indeterminate period-of- time, if not be irreparably destroyed

The stakes for building and sustaining ‘relationship capital’ appear, by most knowledgeable accounts, much higher today…given the asymmetric nature and source of real, not imagined, threats. But, since January 20, 2017, relationship capital travels at keystroke speed which previously remained closely held within a corporate boardroom, or the oval office! While the current trend, since January 20, 2017, provides – delivers phenomenal (individualized) flexibility, inappropriate relationship ‘capitalizers’ are far more difficult to retract, erase, or rebuild, once the send button has been pushed.

Indeed, real-time, handheld communication platforms pose distinctive implications to – for relationship capital…since the exponential rise of social media networking.  The ability to assess an organization has become variously transparent and subject to even the most basic intelligence collection and analysis.  This means, at least through my lens, that external relationship capital management is as important as the management of each internal operation, the former being a key driver of wealth creation and competitiveness. Relationship capital is evaluated as an (intangible) asset, no less important than tangible-physical assets reported on balance sheets and P&L statements.

‘You want me on that wall’! (Jack Nicholson, ‘A Few Good Men’)

 Michael D. Moberly  February 21, 2018  The Business Intangible Asset Blog, since May, 2006  ‘A blog where one’s attention span, intangible assets, and solutions converge’!  St. Louis  [email protected] 

Readers are invited to explore other blog posts, papers, and books I have published at


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