Natalie Sheffield Moss and Dr. Kristen DeTienne, Organizational Leadership and Strategy
Business Connectors make things happen by knowing all the right people and all the right social connections. Connectors are geniuses at forming relationships, maintaining relationships, and reaping the benefits of relationships with other people. Companies with Connectors garner economic benefits as these gifted individuals use their art of connection to gain valuable industry information, to make strategic sells and to get direction in product development. The business world often overlooks the economic value of forming relationships; yet, continued and strategic business relationships drive company growth. Companies are economically benefited by managers and executives who master the art of connecting with people. Then, having established the benefits and importance of social networking, the art of connecting is organized around four key areas: maintaining a database of contacts, expanding contact opportunities, sustaining a working relationship and avoiding networking flaws.
A Connector is someone who “knows lots of people”– a master of the art of connecting with people. Coined by renowned author Malcolm Gladwell, the term Connector describes someone who makes things happen through knowing all the right people and all the right social connections. i
The business world often overlooks the value of Connectors; nevertheless, every contact made with someone outside your company has potential win-win opportunities to increase company visibility, strategy, profits and growth. A study by Harvard Business Review backs up the importance of networking by concluding, “the real work in most companies is done informally, through personal contacts.”ii Although new technology and patents are often crucial to company survival, relationships play an important role as they provide the means to accessing this technology from vast resources. Social networking can make or break your business.
Companies with relationship- focused executives garner economic benefits as these gifted individuals use their art of connection to gain valuable industry information, to make strategic sells and to get direction in product development. In addition to the influence Connectors have on the people they connect with, social networking has economic advantages. The most beneficial economic advantage of improving social networking is increased external economies of scale.
The first and largest economic advantage to social networking is economies of scale. Economies of scale, whether internal or external, occur as the average cost of each additional unit of product or service declines. Business can increase internal economies of scale by having better inputs, spreading fixed costs, specializing workers, and upgrading machines. Scale economies, which are external to individual firms, “relate to the size of the industry within a certain geographic area. The average cost of the typical firm declines as the output of the industry within this area is larger.” External economies of scale are declining average costs because of concentrated industries. iii
External economies of scale lower average cost because companies in close proximity to one another can easily share industry knowledge, as company executives form relationships to share insider information, and workers transfer from firm to firm. The external economies of scale also give rise to better input markets as industries understand specialize services for each other. External economies of scale are key to survival in our era of rapid globalization and are a byproduct of successful social networking.
Managers and Executives should keep a database for their personal contacts. Every contact should be jotted down on a little piece of paper or on the back of a business card until we can enter it into our database. Writing down memorable hobbies or the circumstances in which you meet provides commonality for when you chat again. Andrea Nierenberg, author of Masterful Networking, makes her distinctive notes on the back of business cards. Along with proper strategy for receiving business cards, clever protocol also exists for giving out business cards. Susan RoAne insists that business cards should be handed out at the end of a conversation and not as if you were “a blackjack dealer.”iv Contacts will not hang onto your business card if they see you practically tossing the cards to everyone in the room.
Keeping tabs on our contacts through a database encourages executives to use the resources provided by contacts on a regular basis. CEO Max Messmer shares that a database of addresses, preferred methods of communication, associations to which the person belongs, and any pertinent interests will allow you to best determine whom to contact in your circle when you are seeking advice and guidance.v When managers have a specific place to go to with specific notes on each person, they maximize the efficiency and effectiveness of their social network.
The first hurdle in building a database of names is figuring out where to pick up potential contacts. Trade shows, professional associations, and industry conferences have traditionally been the center of socia l networking. Nevertheless, expert Andrea Nirenberg recommends going outside this arena and beginning your network with satisfied customers. Because previous and current clients already know your work, they can effectively introduce you to others who need your services.vi Also, meeting contacts in a nontraditional way cements your name in people’s mind. Baber and Waymon, authors of Make Your Contacts Count, find a lot of success out of chance encounters as they “see every accidental meeting [as] an opportunity to explore a new subculture, find out about a new marketplace or just enjoy the serendipitous connections that life sends your way.”vii Many of the most successful business relationships have been formed on while traveling on planes, while waiting in line, or while watching a game at the ballpark. As executives understand the economic advantages of networking and make networking a daily part of their business life, companies will experience continued growth.
Endnotes
- See Gladwell, Malcolm (2000). The Tipping Point. Boston: Little, Brown. The term “Connectors” comes from Gladwell’s book.
- See Cross, Rob & Laurence Prusak (2002, June). The People Who Make Organizations Go – Or Stop. Harvard Business Review, 105-112.
- See Pugel, Thomas A. & Peter H. Lindert (2000). Alternative Theories of Trade. International Economics (pp.103). Boston, Irwin McGraw-Hill. This textbook discusses the benefits of internal and external economies of scale.
- See RoAne, Susan (2000). How to Work a Room. New York: HarperResource.
- See Messmer, Max (2002, September). Expanding Your Professional Network. Strategic Finance, 84(3), 23-25.
- See Nierenberg, Andrea (1999). Masterful Networking. Training and Development, 53(2), 51-54.
- See Baber, Anne & Lynne Waymon (2002). Networking Know-How. Women in Business, 53, 40-44.