Meaning
Systematic recording of informal personal connections and social networks held by a founder into the firm’s central database. Relationship codification turns the founder’s private contacts into company assets that can be managed by a successor. The process is complete when a third party can manage a key account using only the notes and history stored in the system.
Contractual Form
Form of this codification is usually a combination of CRM entries and formal introductions. The founder must explain the history of the relationship and any unwritten agreements that exist. This prevents the successor from making a mistake that could offend a long-term partner.
It also ensures that the company does not lose the history of its most important deals.
Asset Protection
Protection of the firm’s capital includes securing these vital connections. If the relationships stay in the founder’s head, they leave when the founder leaves. Codification ensures that the value stays with the business.
This makes the company more attractive to buyers and more stable during a transition.
Knowledge Transfer
Transfer of this knowledge takes time and a willingness to be open. The founder must be willing to let others into their network. This is a key step in moving from an operator seat to an owner seat.
