Networking Know-How
Successful networking can lead to new business opportunities, but it doesn’t happen overnight. Here’s what to look for, what not to do and how to make business networking work for you.
To many small businesses, networking is seen as a necessary evil. Organized networking functions — such as monthly social gatherings, breakfasts and cocktail parties — are marketing tools used to secure sales leads, find investors, and create contacts with other companies and like-minded businesspeople. But they’ve historically carried an insincere “schmoozing” and “rubbing elbows” stereotype.
However, according to Andrea Nierenberg, best-selling author of three business networking books, treating a professional networking event as though it were an obligation is not only an outdated approach, but one that’s potentially damaging to your credibility.
“The old way of networking was to go to an event, give everyone your card, leave and expect the phone to ring,” she says. “It just doesn’t work that way. And people usually throw out the cards before they’ve even left the event anyway.”
Today, those who continue to attend networking functions with this means-to-an-end attitude are not only wasting their time, but also risking their reputation, says Nierenberg. She is also the president of The Nierenberg Group, a New York-based business consulting firm that specializes in teaching executives how to improve their relationships with clients and employees.
“When people go with the goal of getting business right away, they’ll be seen as negative networkers,” she says. “And that’s obnoxious. No one wants to be pounced on or sold right away. They want to start a conversation, learn about others in the industry and develop a relationship over time.”
Bigger isn’t always better
The goal of attending these events is not about immediate financial gain, but to share insight with and learn from professionals outside of your immediate network, Nierenberg says.
In fact, reaching out to other professionals at different small businesses in varying industries for ideas and expertise could greatly improve a company’s performance, says William Baker, a marketing professor at San Diego State University.
According to a study Baker conducted in August 2007, smaller companies — those with 11 to 250 employees — benefit significantly more than larger companies from having external social networks, particularly in their ability to innovate, which Baker defines as their ability to come up with radically new ideas and to have outcomes where a larger percentage of their sales are from new products and services.
“Because smaller firms by definition have fewer people, it’s much easier for them to get into a group mindset about how their business works,” Baker says. “They’re more likely to rely on past experience to solve problems but not necessarily the best solutions.”
To discover improved problem-solving methods, and to get another perspective on your customers, competitors and the industry, Baker says that modern small businesses must extend their reach beyond their own employees.
“Until recently, companies have relied on the brainpower of their top managers to make decisions, but people are learning that they’ve got to open up,” he says. “If they continue to only talk to each other and run the organization through their own filter, chances are they’re doing things non-optimally, and they won’t see trends occurring in the marketplace as soon as they would if they had more outreach.”
In addition to improved innovation, Baker’s research also found that conservative small businesses with strong external networks and networking skills are more likely to create innovations that approach the same level as larger companies that take much more risk.
“Surprisingly, we found that the more external social networks you have, the more likely you are to come up with a big bang idea, even if you’re conservative,” Baker says. “We predicted that only firms with strong entrepreneurial orientations would really benefit from strong external social networks, but we were delightfully wrong.”
Making it work
Participating in organized events, however, is just a fraction of business networking, according to Nierenberg. “It’s what you do subconsciously when you build relationships, whether it’s internally, or with clients and new people. And it’s very serendipitous. It can happen anywhere, anytime.” But to make networking work for you, she offers the following advice:
Three’s company. Go to at least three different industry or professional events each month, she says, but go with the idea that you can only join or get involved with those that you realistically plan to attend regularly.
Make it about quality, not quantity. Before you arrive, say to yourself that you’re going to either meet or reconnect with at least two people. “Don’t try to meet 100, 20 or even 10 people,” she says. “That’s unrealistic and not enough time to really listen or connect with anyone.”
Leave them wanting more. Nierenberg recommends creating an “elevator introduction” for yourself, which is basically a headline for what you do professionally that will make people want to hear more. “So, for example, instead of saying, ‘I’m an architect,’ you should say, ‘I plan and design buildings in undeveloped areas.’ This type of introduction is more likely to pique someone’s curiosity and to keep the conversation going.”
Don’t overstay your welcome. You don’t have to stay the entire time. Give yourself a time schedule, she says. Commit to an hour or an hour and a half. If it’s a dinner or a breakfast, however, commit to staying until after the meal.
And while it’s common sense, but not common practice, Nierenberg says, remember to listen. “When done so correctly, it can be your most important business skill.”
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