How to become a good networker. Let's start with the business
Ben Thompson, one of the most acute observers of the new technology-driven economy, asked on his blog “Stratechery” why Amazon acquired Whole Foods for $13,7 billion, when all of its 12 acquisitions since 1999 to date, exceed to 100 million dollars, were from competing businesses (such as Zappos, Woot and Quidsi) or start-ups (such as Alexa, Annapurna Labs, Elemental Technologies) that were going to integrate and extend their offer and their technological platform. The acquisition of Whole Foods enters into a different logic, which is that of the network effect. That is, adding a network of contacts to your own by taking it from other sectors of the trade not reached by Amazon, such as the food and fruit and vegetable sector. For this sector it would be very challenging to build a service from scratch with only one's own strength.
It's the same path that Facebook is following with a series of expensive acquisitions. The acquisition of YouTube by Google can also be included in the same logic. When Google realized its Google Video couldn't compete with YouTube, it decided to buy it. Thompson writes about it:
Just as it took time for Facebook to figure out that it couldn't internally replicate every new social network that came onto the net, and for Google to realize it was kicking its own butt, so it took time for Amazon — a whole decade! — to realize that he was facing a networking problem with which he was unable to replicate what he had done with books.
Networking in business relationships
In, let's say, classical economics there is the conviction that the control of supply constitutes the fundamental leverage factor of success; in the territory of the new economy, however, the power derives from the control of the demand, because the control of the demand is the keystone to control the network. Again according to Mark Thompson, this is the reason why Amazon bought a network, that of Whole Food, at a high price, to integrate it with its own and wider network. This extension of the network is precisely the passepartout for secure profitability.
Just as networking is a fundamental activity in building a successful business in the new economy, it is equally crucial in building lasting and profitable relationships between people involved in business at all levels. The ability to be an effective networker is therefore one of the most valued properties among business people, but also in any other human activity.
"The Economist" has dedicated an article, The network effect, to the growing importance of networking in business relations and to the phenomenon of the network effect. Being a good networker pays off — but it requires skill as well as shamelessness, which appeared in the Schumpeter column. We are pleased to offer our readers the Italian translation of this speech, written in total Economist style: inimitable.
relational networking
The theme of the World Economic Forum (WEF) changes every year. This year was “The New Global Context”. Last year it was “Reshaping the World”. However, the real theme of this meeting is less pretentious and more mundane: the power of networking. Many people would rather spend their time on real things than socializing. But the fact that more than 2500 of the busiest people on the planet fly to a small Swiss town like Davos every year to meet and talk is proof that socializing works. One WEF veteran put it this way: "Contacts ultimately mean contacts."
Networking isn't just for the elite. A survey of workplace staff in Germany, conducted over three years by Hans-Georg and Wolff and Klaus Moser of the University of Erlangen-Nuremberg, found a positive relationship between workers' efforts to build contacts — within and outside the work environment — and increased wages and opportunities for career advancement. “Networking is considered an investment that pays off in the long run,” concludes the research. Reid Hoffman became a billionaire by investing in a series of companies that brought networking to the masses: Friendster, SocialNet and LinkedIn.
The first step to becoming a good networker
What makes the networking opportunity so appealing whether it takes place in a charming village in the Swiss Alps or takes place in a seedy hotel near a highway. Few people are gifted at networking. Bill Clinton is super at this business. He wraps people in a physical embrace, persuading them, on the spot, that they are the most important people in the world to him. Few businessmen are as good as he is. For example, Goldman Sachs boss Lloyd Blankfein has a knack for making people feel at ease. But most people look more like Hillary Clinton than Bill, they need to work hard to become good networkers.
The first step for aspiring networkers is to let go of any embarrassment. You have to be bold in your pursuit of power and once you have achieved a relationship of dominance, don't be stingy in praising the people involved in the relationship. Academic research has found that susceptibility to flattery is limitless and goes beyond satire. In a research carried out in 1997 BJ Fogg and Clifford Nass, of the University of Stanford, invited people to play with riddles with the computer, which returned certain types of feedback. Participants who received a commendation rated the computer and themselves higher than those who did not. The same was true of those whom the computer complimented in advance, before the interaction even occurred. Well, even if blatantly insincere, the computer-generated flattery worked.
However, the boldness must be balanced by the subtlety. Pretending to disagree with the interlocutor, before converging with his point of view, conveys a sense of power. Highlight common interests or common experiences. People are very attracted to those who look like them and are very likely to choose as partners those whose first or last name resembles their own. We go out of our way to ask for help. Giving help allows an excellent person to exercise their power as well as nurture their self-esteem. During the time Barack Obama has been in the Senate he has often turned to fellow senators for help and advice.
The second and third step to become a good networker
The second step is that you must have something to say. Success comes from a well-organized mind, not just a well-stocked address book. Sometimes it's tempting to dismiss the official theme of a conference. Wrong! The more seriously we take it, the greater the possibility of achieving the goal set by us and by the conference itself. You have to attend the most important sessions and ask the important questions. We need to reward the so-called "masters of thought" by adding them to the list of accounts to follow on Twitter. But you shouldn't go too far. It is a mistake to pontificate on issues that are within their competence. It is an even greater mistake to argue over the slogans of the global elite. It is a fact that homogeneous organizations do better than inhomogeneous ones. The goal is to adapt by saying the right things without challenging the dominant thinking.
The third step is that you need to work hard to build a network.
You have to select in advance the most important people who will take part in the event. If you want to meet them, you need to reach them with an email proposing a meeting. Mukesh Ambani, the boss of Reliance Industries — an Indian conglomerate — is concerned with finding out about the people he intends to meet in order to find out their interests. Mark Tucker, the boss of AIA, Asia's largest insurance company, deepens the contacts with detailed emails sent at all hours of the day and night. Julia Hobsbawm of Editorial Intelligence, a consultancy that helps managers connect, argues that networking is like exercise and diet. You need to incorporate it into your daily routine.
A future of flatterers?
Although the good networker must be a good calculator, ruthless and brazen, those who have the ability to appear spontaneous or even casual are better at it. The best trick is to engineer "random" encounters that can bring the prey closer. If, for example, he is blasted with physical fitness, it is good to be found in the hotel gym when he arrives for his morning session. Another trick is to make sure that the people you socialize with have the opportunity to pass on the relationship to the people you intend to socialize with. One of the best guides to this activity is the book "Never Eat Alone" by Keith Ferrazzi.
The perfect solution is to make networking a fundamental part of one's work, possibly becoming a sort of ambassador for one's company or, at the very least, founding one's own global network business.
In 1971 Klaus Schwab was a 32-year-old economics professor who would spend his life publishing obscure academic papers. Instead Schwab organized a meeting of European business leaders which then grew into the WEF. Today, the WEF has an annual budget of $200 million, and the heads of the world's major companies pay tens of miles of dollars to attend and shake hands.
