21st Century Business Networking

[Brian Anderson-SendOutCards.com]

How to leverage trust in the Internet Age.
By Alan Rae, Lisa Harris and Ivan Misner

In this article we discuss the general findings of our recent research project that investigated how entrepreneurs are networking and collaborating in the Internet age.

Most of the 556 people who completed our survey were from BNI, Ecademy, LinkedIn or have interacted with us over the last several years. We wanted to test the relationship between online and offline marketing, based on our previous observations that the best online marketers seem also to be good face to face networkers. We also asked how networking integrates with the rest of their sales and marketing activity and what drives some companies to spend a lot of time online playing with the tools of Web 2.0 - and what causes others to avoid them completely.

Networking in the Internet Age

The growth of a small business depends on how its relationship with the market place evolves under the leadership of its management, and how successful they are at building the infrastructure to support their future growth. In practice this means identifying a coherent, relevant market segment to target, communicating effectively with that target audience, and efficiently satisfying their needs. However, there is a long ‘tail' of very small businesses that only ever employ the owner; the vast majority of companies have not grown beyond four employees.

Our research showed that the use of online tools, Web 2.0, and social networking allows companies to be effective players in the world of business while remaining small. They can do this by systematically building and maintaining relationships with their peers and working together to develop know-how and products as required by their customers.

Networking, collaboration, online promotion, and delivery will be the toolset for the next iteration of the business cycle.

Why Do People Network?

We found people network for a variety of reasons:

1) Entrepreneurs like networking.

2) They see the network as the best 'fit' for the desired purpose.

3) A network is a low cost option for marketing a service or product.

Business people need to work with others, formally or informally, to obtain inquiries and fulfill contracts. In particular, these relationships help the entrepreneur obtain information on new technologies and processes, on what products to offer, and on what prices are achievable.

Members of an individual's network range from casual acquaintance to close family. This network plays an often critical role in determining how problems are solved, how organizations are run, and how far individuals succeed in achieving their goals.

What Networking Options Are There?

Social networks are structured around hubs. Many of these remain quite small but some become very much bigger. The creation of large hubs allows ideas and methods to spread rapidly through the network. It also makes the network robust; the removal of any one hub can be replaced by others. This is the basis of the extreme fault tolerance and resilience of the Internet as we know it.

One effective model of network behavior is that there are numerous small "cells" of locally connected people with a few "super-connectors" who provide the links between them.

There are effectively two polar positions. In the BNI approach you have meetings every week with 20-30 people and leverage your network from there. BNI is designed to consist of a small network of people who develop a very strong relationship with one another.

Ecademy's approach, on the other hand, is that the more connections you have the better. To caricature this position: You should connect with everyone in the world—once—and see what happens. What's unique about Ecademy (http://www.ecademy.com) is that it effectively supports both online and off-line networking. Connections are basically random. An issue with networking is how to strike the right balance between focused and random networking, and Ecademy is good at delivering measured amounts of randomness.

LinkedIn (http://www.linkedin.com) by contrast is completely purposeful. It maps your first three circles of connectedness and lets you plan a route of introductions to whoever you are trying to reach/sell to. Then you can ask your network for introductions, and you will be passed on according to the strength of your reputation.

Making use of a network, small or large, involves aligning with and getting to know the most connected members—and getting them to trust you so that they will pass your ideas or opportunities on. However, there is taxonomy of these individuals. Some are essentially salesmen, some just like connecting people; some are subject experts—'mavens,' to use the terminology of Malcolm Gladwell in his book, The Tipping Point.

You must be clear what you're doing in the network: Are you selling? Looking for advocates, employees or finance? Or are you just trying to spread ideas? The individuals chosen to work with will be different in each case. In this regard, reputation is a personal brand. It brings you a dividend over and above the number of connections you can make by your own efforts.

The Key Skills of Networking

According to our respondents, the key skills of networking were thought to be:


* Listening skills;

* Communication skills; and,

* An attitude of Givers Gain®.


Givers Gain (also sometimes called 'paying it forward') means doing favors and passing referrals on first, while waiting for the 'law of karma' to work on your behalf later when you have enough good 'karma points' in the bank. Spamming everyone with business cards and then maintaining a 'close the sales deal' approach seems not to work in this environment.

This is in line with Cialdini's identification of the principle of reciprocation as one of the cornerstones of building strong human relationships in his book Influence - Science and Practice. It is a must for anyone serious about building a successful business presence.

If you can build and maintain a good reputation for competence in a sought after area and are generally pleasant to deal with, networking is a great way of leveraging your ability to reach more customers.

Above all you have to be clear about what you want from networking—be it collaborators, referrals, employees, or introductions to finance. If you are consistently helpful and let other people know clearly what you do and what you want, then the magic happens.

How Trust Is Developed in Networks

This brings us neatly to the issue of building trust and developing a reputation. We found that trust is built from 3 building blocks:


* Knowing your stuff;

* Being able to deliver; and,

* Being likable, or at least easy to work with.


In most cases you trust people you know, and with whom you've worked on something that's not a life or death project. As time goes on you work with them on progressively larger contracts until eventually you feel comfortable enough to 'put them in to bat' on your behalf.

We asked some questions about how trust develops. Respondents answered that it's a combination of early opinion and likability reinforced with recommendation (like seeing them at work, or an experience of their deliverables). "Liking" and "experience" seemed to be the most influential components.

Most people seemed not to have a systematic process of developing trust. A few wanted to work on a project with them first, but several relied on randomness and the right feel. Many more, however, seem to use speed of response or degree of follow-up as a surrogate for reliability. It also mattered whether the individual already has a good reputation.

For a neophyte networker, the key advice is you only have one chance to make a first impression.

Trust motivates people to recommend you. Stephen M.R. Covey talks about this in his book The Speed of Trust. In the book he discusses the 'Three Key Ideas' to move at the speed of trust:


1. There is a compelling business rationale for trust. It affects cost. There are economic benefits. High trust is a dividend and low trust is a tax. When trust goes down, speed goes down with it. When trust goes up, speed goes up and costs go down. This is a dividend, a high-trust dividend. Trust is a qualitative and quantitative factor. Nothing is as fast as the speed of trust.

2. In today's new global economy, the ability to establish trust is key to every organization. We are interdependent. In a cluttered world, trust helps you cut through the clutter. It is a performance multiplier. When people trust you, everything else you do is enhanced.

3. Trust is a competency. It is something we create and can get good at. It all starts with self-trust and personal credibility. Are we behaving in a way that builds trust and transparency? Are we keeping commitments and talking straight?


Once trust is developed, begin collaborating using the Internet. Most of the tools you need, both for online networking and for collaborative working, are either free or comparatively inexpensive. You can even share subscriptions to streams of leads. Many government tenders in the UK are notified on portals like sell2wales http://www.sell2wales.co.uk and Direct 2. You also can subscribe to services like Skillfair, which will direct particular types of contracts your way.

Apart from email, the main tools you need are a tool to deliver voice over IP (VOIP), which will let you hold conference calls and run chats, and a document repository where you can store documents, manage the email threads, and work collaboratively. Effectively, all you need is a laptop with a wi-fi broadband connection, and you can work anywhere. More to the point, you can project manage from anywhere too.

So the key issue is whether the small business owner perceives that they CAN effectively leverage their business position by using the tools of Web 2.0. We will explore these criteria in a separate paper.

Conclusion

In this paper we have introduced the key areas covered in our research and we will return in more detail to the issues of trust building, the role of networking in marketing and the growing importance of online networking tools later in the series.

Lisa Harris ([e-mail]) is a Senior Lecturer in Marketing at Southampton University School of Management. She is a Chartered Marketer and a Director of the Chartered Institute of Marketing. Before joining the education sector she worked for 10 years in marketing roles within the international banking industry.

Alan Rae ([e-mail]) is Managing Partner of AI Consultants which researches how small companies use IT and the internet and develops training programs for small companies themselves or those who need to work with or sell to them. He is a Fellow of the CIM and sits on its Professional Body Board. Since 1977 he has worked in Engineering, IT and Business Consultancy, mostly as an owner-manager.



Ivan Misner ([e-mail]) is a New York Times best selling author. He is also the Founder and Chairman of BNI (www.bni.com), the world's largest referral organization with thousands of chapters in dozens of countries around the world. Ivan is also the Founder and Visionary behind the Referral Institute, a referral training company (www.referralinstitute.com).

Tags: Alan Rae, April 2009 Edition, Ivan Misner, Lisa Harris, networking, trust