Every small business owner knows the importance of building business relationships. But networking is not as easy as it looks; building long, rewarding relationships is a time-consuming process. According to a new analysis by BoardEx, the boardroom consultancy, it can take years to build a solid core of business relationships.
The analysis found that the best small business networkers have spent decades getting to know people and building their contact books alongside their careers. BoardEx analysed the number of boardroom connections among more than 100,000 board members at 700 small and medium-sized British companies. The survey looked at each director's various boardroom roles, both past and present, and counted all the directors that he or she "crossed over with" on each board throughout their careers.
The most connected directors could each boast well over 100 boardroom contacts within their personal networks. The top networker, Dr Rolf Stomberg, chairman of the Management Consulting Group, has around 200 boardroom relationships.
The average small business director, on the other hand, has 15. Dominick Sutton, who led the BoardEx study, says: "These figures are just numbers that need to be taken in their context. What is really interesting is that when you compare your average young business director to those at the top of the list, you realise there are some really powerful networkers out there."
So who are the best smaller company networkers? Perhaps unsurprisingly, they are all established business leaders who built their networks first by working up the career ladder and then, through very active boardroom networking.
All of the top networkers are non-executive directors, mostly chairmen in the later stages of their careers; they are no longer involved in the day-to-day running of their companies.
John Jackson, 78, one of top movers (see below, Networking NEDs), is typical. Having built his career at Philips Electronics, where he worked for nearly 30 years, Jackson now serves on the boards of a number of other companies. He is the chairman of Oxford Technology VCT and the non-solicitor chairman of City law firm Mishcon de Reya.
It's easier for older executives to network, says Sutton: "Most executives come onto the board at a relatively young age when they are working full-time. As they grow older and more successful, many no longer work full-time, and that leaves them room to join other boards and extend their networks."
Once your reputation for being good with people is established, the path to networking is clearer. Non-executive directors like Jackson are known for being good networkers, and that makes other companies-including small and large-more likely to want them in their own boardrooms.
"Networking is not an activity for me," says Jackson. "I really like people. That's how networking operates; it's about how I can help others... I don't work at networking. I'm just very interested in people and their problems, and helping entrepreneurs who want to start something."
After helping a number of small companies get off the ground, word got around and more business owners starting phoning Jackson directly. As he explains: "Part of networking is being available. That's very attractive to new business owner."
Lady Barbara Thomas Judge, the only woman to appear in BoardEx's top 10 list, is someone else to whom networking has come "naturally". She has expanded her circle primarily through boardroom roles in a variety of companies.
Originally a US lawyer, Judge was the first female commissioner at the Securities and Exchange Commission. She settled in Britain [where she married businessman Sir Paul Judge, now president of the Chartered Management Institute]. She is currently chairwoman of the UK Atomic Energy Authority and deputy chairman of Friends Provident, the financial services company.
She stresses that business relationships shouldn't be one-way. "I hate the word networking; it sounds pejorative," she says. "I think of myself as a person who happens to have met a fair amount of people because I've lived in so many places. I spend a lot of time introducing them to one another. In this way, they can all benefit."
According to Judge, it is not just aspiring executives who need to invest in building business relationships. Established business leaders need to reach out and include the next generation, especially women, still under-represented in the boardroom. She says: "Professional women do not have the same support systems as men. If women don't help each other, how do we expect others to help us? Senior women must give time to women on the way up. Examples of ways they can help include letting them know about job opportunities and coaching them." Adds Annie Brooks, co-founder with Hela Wozniak-Kay of women's event-led networking group Sister Snog: "Some women don't like women-only events as they think it'll turn into a coffee morning. But this doesn't happen if it's done in a proper format."
The BoardEx survey, which only measured professional connections inside the boardroom, provides only a snapshot of the total number of people that each director knows in the business community. But the broader theme of the study rings clear: that networking takes work. "There is a relatively small number of extreme networkers out there who can make a career out of boardroom roles," says Sutton, citing Peter Sutherland of BP and Goldman Sachs as a good example of someone who "knows everyone". The rest of us need to fit in networking activities when and where we can-not always easy for a time-starved small business owner.
Challenging as it may be, entrepreneurs need to make networking a priority. Penny Power who set up the Ecademy business networking website eight years ago, with her husband Thomas, says: "Being self-employed can be very lonely at times," she says.
Power adds that networking is a way to replace the "water cooler" camaraderie found in the more "cushioned" corporate world.
Brooks and Wozniak-Kay also see networking as a great help to those on tight advertising budgets. Your network is also a personal selling point, notes Brooks: "No-one's job is safe, no business is safe. The little black book is becoming a valuable tool."
Adds Power: "In today's market you need to constantly innovate and build momentum in your ideas. There's no point spending months working on a project only to come to market and get no response. Networks provide an ideal testing ground to practise the way you explain what you are selling to others."
Getting started
Organised networks and business clubs can be a useful first step
Online business networks like Ecademy, LinkedIn, and OpenBC are primary resources where entrepreneurs can find useful contacts and share their ideas with others-all from the comfort of their kitchen tables. They can also seek advice on more general start-up issues such as IT, accounting and taxes, which many newly self-employed people find challenging.
"Many entrepreneurs don't want to-or simply can't-go out and pay for services. But if they belong to a business network, they can access a whole raft of skills and professional advice from their fellow members for free," says Ecademy co-founder Penny Power. But connecting online is only one facet of a solid networking strategy and needs to be balanced with old-fashioned eye contact and face-to-face rapport.
"We have seen a proliferation of online networking groups, as well as people forming their own communities and baring themselves online via blogs. The advantage of networking from your computer is that you can be in touch with lots of people," says Hela Wozniak-Kay, co-founder of women's network Sister Snog, who sees the rise of mobile working contributing to the rising number of networking groups. "But you can't be too sure who you're going to meet. The thing that's great about networking in person is that you can intuitively know in a short time if they're for you or not. A disadvantage about networking online is that you can get weirdos. The other thing about online networking is that there is a fine balance between not giving enough information and telling too much to a very public and global audience."
There are literally hundreds of networking forums from which to choose. The online networks offer events where members can meet one another in person.
For those looking for funding, venture capitalists like the British Business Angels Association hold regular networking sessions that bring together investors and entrepreneurs.
Many of the top networkers, though, say they have never been to a formal "networking" event. Instead, they spend most of their time broadening their contacts through established friends and professional relationships.
Lady Barbara Thomas Judge advises women to get involved in charity work and professional organisations or guilds, or better yet, to serve on another board
of directors. "It's a great way for men to see how effective we are."
The good networking guide
Forget schmoozing and using; honesty and trust work much better
While networking gurus vary in their personal approaches to networking, they all emphasise one important point: networking is not marketing. The new book A Friend In Every City, written by Penny and Thomas Power, describes how some networkers see events as opportunities to sell themselves to new customers. That, says Penny Power, is negative networking: "Some people are only focused on what's in it for them. Or they hide behind their business cards the whole night. It's hard to do business with these people."
Diversifying your interests is also important. "I've been involved with tiny little start-ups all the way through to big corporations. You can't be frightened by new situations. The wider your range of interests and experiences the more you appeal to others," says top-10 networker John Jackson.
Good social skills are still an essential component: when someone hands you a business card, take a moment to look at it before putting it in your pocket. Always return phone calls. And be a good listener.
When initiating conversations, start by showing interest in the other person by asking them a question. "The other person should be more relevant, and you should be thinking about how you can help him or her. Don't worry about telling others about your business right from the start. People will get to know you by the questions you ask. It becomes self evident if you have business interests in common," says Power.
A common mistake is to view networking as a short-term effort. "I would shoot the person who came up with the concept of the 'elevator pitch'," says Power. "You can't market yourself to someone and expect them to trust who you are. They have to get to you first as a friend and build your trust."
At the same time, it's a mistake to be over-familiar. Don't treat someone as your "new best friend"; be professional. As Hela Wozniak-Kay says: "There is an element of social networking, but the true sense of business networking is to make great business contacts, not to find a new best friend or partner."
There are also techniques to attracting help. "New business owners often like talking about how busy and tired they are, which is not very inviting to prospective clients or partners. Instead of saying something like: 'I'm just run off my own feet!' or 'it's been crazy here', broach stressful topics constructively, for example: 'I'm finding my business taxes really challenging. Do you know who can advise me?'"
Despite networking's new patina of sophistication, the experts agree it still comes back to basic social rules. "I'm not too worried about dress codes and all that," says Jackson. "If you like and respect people, and are courteous to them then others will be the same back to you."
