Networking is key to value creation.

What is the purpose of this article?

Provide some insights into how networking can support value creation.

You can download a PDF of this article from:  Networking is key to value creation

What is networking?

Let’s focus on business networking.  The are other types of networking, such as finding a new job. The following article uses the example of why a CEO would network.

Business networking is creating and maintaining a group of relationships which can potentially help the success of the company and the CEO’s personal success.  The relationships are potentially of mutual benefit.  The group of relationships as a whole will be key to success, but not every single relationship will turn out to be valuable.  Relationships are based on trust and understanding.

 What are some of the potential networking benefits to the CEO?

Networking can provide value to the CEO, the CEO’s organization, and to society.  This can be part of the CEO’s life-long learning and un-learning.

  • Exchanging ideas and getting fresh ideas.
  • Sharing and gaining new knowledge.
  • Sharing and gaining different perspectives.
  • Figuring out and getting answers to a question.
  • Being able to find other people who can help e.g. if the CEO wants to learn about taking a private company public and wants to find other CEOs who have done this.
  • Benefits to the company e.g. a private company CEO staying in touch with potential strategic buyers.
  • Being broadly known and having a reputation in case the CEO needs to find a new job.
  • Developing a pool of potential board directors, C-Suite candidates, or CEO successors.
  • Meeting their purpose in life and values by helping others when there is no personal or company benefit e.g. mentoring MBA students.

Who might be in the CEO’s network?

This is based on the networking benefits the CEO wished to achieve. Networking members could include:

  • Leaders and advisors from a broad spectrum.
  • Leaders and advisors who have a deep knowledge of the company’s customers, marketplace, and ecosystem.
  • Ecosystem members such as: customers, investors, regulators, competitors, and journalists.
  • If doing MBA mentoring, then other mentors, university leaders involved in mentoring, etc.

What are the benefits to people for being in the CEO’s network?

These benefits are aligned with the benefits to the CEO.

  • Exchanging ideas and getting fresh ideas.
  • Sharing and gaining new knowledge.
  • Sharing and gaining different perspectives.
  • Figuring out and getting answers to a question.
  • Being able to find other people who can help.
  • Benefits to the company e.g. strategic buyers staying in touch with potential acquisition targets.
  • Board directors developing a pool of potential board directors, C-Suite candidates, or CEO successors.
  • Meeting their purpose in life and values by helping others when there is no personal or company financial benefit.

What is the greatest challenge to growing and maintaining your network?

Individuals are overwhelmed with electronic information.  2009 University of California, San Diego study estimated that the average American was receiving 100,000 words a day, about 34 gigabytes of data.1  A McKinsey Global Institute study in 2012 also estimated 100,000 words a day.2

People don’t have the time to:

  • respond to every email, text, LinkedIn msg, etc,
  • read all the articles
  • respond and connect with every connection request
  • have regular coffee or Zoom calls with everyone they know.
  • etc.

How do you maintain your network?

There are many ways to maintain your network of mutually beneficial relationships.

  • When you need some sort of help, advice, or discussion.
  • When you provide some sort of help, advice or discussion.

How do you grow your network?

  • Your network members proactively do introductions.
  • You ask your network members for introductions.
  • You do “cold call” requests for connecting.
  • You respond to “cold call” requests for connecting.

What are some approaches for maintaining your network?

  • One-on-one meetings: face-to-face, Zoom, phone.
  • Individual emails, LinkedIn messages, or texts.
  • Social media updates e.g. LinkedIn.
  • Broader emails, personal newsletter.

Your next steps

  • Define your personal value creation plan.
  • If you are a leader, define your plan to increase your company’s value.
  • Define your plan to increase your value to society.3
  • Determine how networking would impact the above three sets of values.
  • What are the kinds of people you need to network with over the coming years, based on the above value impact?
  • How much time will you allocate to networking?
  • Create a structured process for creating and maintaining a network of relationships. Your process will recognize that people will enter and leave your network and that the degree of closeness and engagement with individuals will change over time.

Footnotes:

1 University of California, San Diego  “UC San Diego Experts Calculate How Much Information Americans Consume” Dec 9, 2009

https://qi.ucsd.edu/news-article.php?id=1630

2 Daniel H. Pink ,To sell is human, (New York: Riverhead Books, 2012), page 159

3 Exhibit 6 on page 8 of this McKinsey article raised the questions of “What you can be paid for” and “What the world needs”  These questions apply to you and an individual and to your company.

https://www.mckinsey.com/business-functions/organization/our-insights/seven-essential-elements-of-a-lifelong-learning-mind-set

Further reading

If you’re going to ask someone to do an introduction

https://koorandassociates.org/creating-business-value/if-youre-going-to-ask-someone-to-do-an-introduction/

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