Would you say networking is important? Yes, most definitely, and here’s why.
Networking is becoming more important in business as businesspeople look for ways to increase their reach and their ability to generate profits. Successful people have understood the value of networking for over a century now, with people such as Dale Carnegie extolling the virtues of creating personal connections with others to lay the groundwork for success as far back as the 1930s. The idiom “it’s not what you know, it’s who you know” succinctly encapsulates the truth that underpins success.
A brief history of (the resurgence of) networking
For a long time, networking was reserved for those who were willing and able to become socially active. Joining a church and civic organizations like the Lions or Rotary International was a must, and most businesspeople who did this were able to forge solid, if networks, even if those networks were limited in scope and reach.
Unfortunately, however, most businesspeople didn’t have the time or energy to spend a large chunk of their free time attending meetings and events. And if you yearned for upward mobility, networking required that you join elite clubs and attend the parties of the well-to-do, with the attendant costs that fell way out of the reach of most normal people.
Then came the Internet; the watershed.
With the proliferation of social media platforms came a renewed interest in networking for business, borne upon the momentum of “connection fever”, the drive to be socially connected with as many people as possible. It seemed that anyone was able to reach out to and connect with any other person, and for a time businesspeople across the globe engaged in a glorious connect fest.
Networking became all the rage, and books and gurus appeared to extoll the virtues of this mysterious art form that, until then, had been the province of the super-successful. Everyone from corporation CEOs to sole proprietors found themselves attending regular meetings and events to build relationships with others, feverishly collecting business cards and reciting their elevator pitches over nondescript wine or bland hotel coffee.
And so here we are in the current year.
As we all know, networking events have lost their luster as attendees analyzed what they got out of the time spent meeting others and most were disillusioned, to say the least.
Yes, most people will say that they met a few valuable connections in their networking forays, but none that made a significant difference to their success. Most will also say that they haven’t spoken to those connections for a long time.
And others – the lucky few – will say that they struck it lucky and found people who could help them grow and their businesses flourish. But such stories are rare.
A vast majority of people who tried networking ended up meeting people to whom they couldn’t sell anything and from whom they couldn’t buy. And so, they chatted politely, exchanged business cards and went their respective ways, their prospects no better for the time and effort invested but their consciences placated by the clutch of cards in their pockets. After doing this, again and again, most people started giving up as they saw no benefits to attending these events.
Similarly, online networking – what I like to call “contact hoarding” – seems to have become equally prevalent and is equally pointless. Let’s face it, virtually everyone on sites like LinkedIn knows almost nothing about those in their “network”. Be honest, do you? Most of us want that “500+ connections” on our profile, a formality and stamp of approval that indicates we are “well connected and deserving of engagement”. We know that most of those “connections” (which I would classify as “contacts”) wouldn’t lift a finger to help us unless there was something in it for them. Sure, it makes sending messages easier, but that’s about all.
Why networking is important in the business world
Once you understand what real networking is, you will see that what most people perceive to be networking – the “card-swap shuffle” at events and online “contact-hoarding” – is a façade. It’s fake. It has nothing to do with building real relationships.
Some people get this and have taken the trouble to look into what real networking is and needs to be. And most of those people have reaped the rewards – if they have invested to time and effort to build their networks properly. Unfortunately, the vast majority of people either don’t know how to network properly or don’t want to bother putting in the time and effort. Unsurprisingly, most of them have not found success.
This is a pity because it could be said that networking underpins all business and without it, success is unlikely. This sounds like quite a claim but please bear with me.
Business transactions are relationships based on trust
Do you agree that in essence, each business transaction is simply a relationship between a buyer and seller that is based on trust? The buyer trusts that the seller will deliver the offering being bought and the seller trusts that the buyer will pay the money asked for. We hardly give a second thought to these fleeting commercial relationships that we engage in repeatedly every day.
The important thing to focus on here is that trust underpins these relationships. We may not like the other party to the transaction, we may not even know them, but we trust that they will do what they say they will. Yes, this is a generalization; I know that some transactions are not based on trust but rather on the understanding that non-performance will result in censure. However, when I buy something from amazon.com, I trust them to deliver what I have purchased, just as they trust that I will pay the price they ask.
Since trust underpins business, building trust is surely the most important activity you can engage in, from a business point of view, right?
This is where networking comes in. What is networking? In a previous article, I have defined networking as the “establishment of proactive, reciprocal and charitable long-term relationships with other businesspeople based on mutual trust and generosity”. In short, it’s the creating and nurturing relationships built on trust.
And since trust-based relationships (commercial or otherwise) form the very essence of what business is, your business can be reduced down to its network, a network that includes clients, customers, suppliers, and even staff. Networking, which is the process of creating and nurturing those relationships, is, therefore, the core activity of what every business does, whether the people running each-and-every business realize it or not. Each of your business’ network connections (clients, customers, suppliers, staff) is a metaphorical brick in the metaphorical walls of your business. The business relationships you have nurtured for your business are your business!
This is why networking is so important in business.
The benefits of networking in business
There are a host of benefits to networking, and I have composed a list of 15 of them. For the sake of brevity, I will simply list these benefits below, but should you want to read more about details about each one, you can find the original article here. That said, here is the list of 15 advantages of networking.
- It generates referrals and increases business
- Business networking presents opportunities
- Your network becomes a resource
- It allows you to connect sideways, up and down
- Business networking raises your profile
- It helps build your brand
- Networking allows you to become an expert
- It widens your sphere of influence
- It has a positive influence on your personality and sense of well-being
- It forces you to keep an open mind
- Business networking increases confidence
- It raises your self-awareness
- It allows you to practice your pitch
- Networking gives satisfaction through helping others
- It allows you to make new friends
As you can see, there are more than enough benefits to justify spending some time networking every day.
Why networking is important for small business
In this article, K. Fry identifies five reasons why networking is important for small businesses, including;
- Identifying new business leads,
- Identifying best practices and benchmarks
- Discovering what the new trends in business or in your industry are
- Increasing your self-confidence, and
- Increasing the number of connections you know.
The last point is a little nebulous, to be sure, but true, nonetheless.
Usually, small businesses are “strapped” – cash-strapped, resource-strapped, time-strapped – you get the idea. Most small businesses are started by people who know their craft but are sorely lacking in the skills and acumen required to actually run a business. They lack expertise, in other words, and they lack the money to pay for it. This one of the leading causes of the high small business failure rate.
If a small business owner with a solid network, however, they would have access to a wide range of resources that could help them compensate for any weaknesses in their business, giving them a far better chance of making it through the first few years of operation. This could include information about reasonably priced professional service providers, software that could be used to streamline business operations, business mentors and coaches, and even investors.
Why networking is important for startups
Unlike small businesses, which usually lack resources over the medium to long term, startups have the same problem in the initial phase of their existence. It is at this time that they need to be making the biggest “splash” possible with the business press, potential clients and investors, and it is here, during their few years of existence, that a robust network of connections can help breathe life into a startup.
In his article “9 Benefits of Networking in Business” on medium.com, Sarath CP looks at nine benefits that networking brings to the new startup. These include;
- Generation of Referrals
- Increased confidence
- Positive influence
- Raising your profile
- Satisfaction from helping others
Yes, many of these points overlap with those in the previous section and with other similar lists, indicating that there is a broad consensus that networking has real-world benefits for businesses, whichever stage of development they may be in.
The purpose of networking
As dealt with in the article, “The Purpose of Business Networking”, the reason we build networking relationships is to establish and build proactive, reciprocal and charitable long-term relationships with other businesspeople based on mutual trust and generosity. This, when viewed through the lens of what was stated above – that the core foundation of business is trust and that networking is the very process of building relationships based on trust – would imply that the purpose of networking is to bolster business itself.
The relationship between networking and business success
Finally, we need to touch on the connection between networking and business success. In an article by Michael Simmons, the author discusses the findings by the eminent network scientist Ron Burt, which can be boiled down to a simple fact: being in an open network (one in which you are the connection point between network clusters) is one of the most accurate predictors of business success.
This indicates how the powerful (the right kind of) networking is in business since all businesspeople are striving for success – whatever they define that as.
It’s a bold claim, but I think I have shown that networking is the very foundation upon which business relationships, and therefore business, is built. It is not just a fleeting fad but is rather a fundamental activity that underpins your business, whether you like it or not. It’s as important as any other core business activity – more so in many cases – an should be approached as such.
Take some time to think about your network and wrap your head around how important it is. Then get out there and start building the relationships that are going to move you towards success.