Networking: a key enabler for innovation

Networking is a fundamental enabler for idea generation and indeed innovation as a whole yet the value of networking is easily underestimated and rarely supported. Networking can help individuals to build connections, can help companies innovate and help suppliers provide more innovation, especially when working jointly.

Six degrees of separation

The Hungarian author, playwright, poet and journalist Frigyes Karinthy suggested the concept of 'six degrees of separation' in his 1929 story Chains, whereby in theory we can link ourselves to any other individual on the planet through just six, or fewer, people. It is interesting to see how many steps removed we might be from the US President or a famous celebrity; however, instead if we focus on how individuals are linked or 'tied' together then this can help us figure out how to direct relationship building efforts and the benefit possible. Granovetter (1983) described what he called the strength of 'weak ties' between individuals. As the Facebook trend took hold some years ago now, I soon found myself wanting to differentiate between who I shared what with, some posts were simply too personal to share with all. Thankfully Facebook later introduced the ability to personalize settings with family, friends, acquaintances or public options for posts. The reality is we may have lots of close friends and have a number of acquaintances.

However, beyond Facebook it is these acquaintances that can offer potential, after all these each have lots of close friends and their acquaintances too. It is these 'weak ties' as Granovetter (1983) describes that are 'indispensible to individuals opportunity and integration into the community'. He states that 'strong ties breed local cohesion but lead to overall fragmentation'. So it seems we are more connected than we might realize. This can often be seen in action, especially since the birth of social media, where 'knowing someone who knows someone' can help solve a problem, open up an opportunity or has access to the precise thing we might need. Remember, companies don't have relationships with companies, it is the individuals in those companies that have relationships with other individuals, therefore, following Granovetter's idea through, if we can understand the weak ties as well as the strong ties in a relationship then we can begin to make the relationship really work for us. For example, imagine a supplier relationship founded upon the interpersonal relationship between two individuals, one on each side. This relationship may be close and ensure transactions run smoothly, there are effective day-to-day operations and any problems are dealt with quickly. However, if the extent of the relationship only ever goes this far then the relationship will be limited by what those individuals can bring to it, but if one party has a goal, and the other knows someone in the firm who knows something or someone then powerful connections are made that can be the spark for great things. Imagine the conversation between the principles of the relationship:

Buyer: 'So we think if we can find a way for customers to do this online it will make the whole process much easier, but we need to figure out how to do this.'

Seller: 'That's interesting as I was talking to one of our IT guys recently who said he was talking to an App development company who offered a customizable solution that I think does just what you need here.'

Buyer: 'Can you find out more?'

Seller: 'Why don't I get you guys connected, it is in both our interests to do this?'

Perhaps you might recognize this sort of exchange, as such exchanges are commonplace but it is easy for these to just pass us by, but they are actually very important. This type of networking, that uses connections presented by the weak ties, has unlimited possibilities; after all, if Karinthy is correct, we are just six or fewer steps away from anything, anyone, any knowledge, expertise or capability on the planet. That can really build competitive advantage if we can figure out how to access it, and that is actually not that difficult. Within our relationships with suppliers, if there is a willingness by the other party to help, and we share a need, they will make connections that might help us. Willingness comes from trust and commitment; furthermore the actual effort the other party expands here is minimal. All that is happening here is we are planting our interest in the mind of another and leaving their brain to make connections that will help us, opening up the weak ties. The reason this is virtually effortless for the other is because our brains are programmed to do this; we all naturally filter out the vast majority of information we take in apart from that we are interested in. This can be seen in action when considering buying a particular make or model of a car, suddenly we will be aware of and see lots of these very cars on the road when previously there didn't seem to be or we hadn't noticed. If we can make another interested in our interest they will make connections and may be able to access unlimited possibilities we would otherwise not see.

Social media has really opened up the power of weak ties, sites such as Linkedln make it even easier for professional people to connect and tap into a network of possibilities. It is, in fact so powerful that this site has become the primary means for recruiters and those looking for particular skills or capabilities to search out what they are looking for.

There is no prescribed way to take advantage of weak ties through supplier relationships, but by being aware of the possibilities we can embark on active networking through the supplier relationship and beyond. In practice this involves communicating, sharing needs and aspirations, casting a wide net in asking for ideas and input. Crucially it involves following up on connections that are made. If a weak tie that might hold potential is opened up and we fail to follow it through then it is worthless.

How Starbucks is a hothouse of modern networking

Environment is important to foster innovation. Visit any Starbucks that has a seating area during a working day and most likely you will see individual and groups, sat with laptops, on phones, with papers spread across tables and of course coffee. Starbucks and other coffee houses have become modern business hubs where people who work remotely, but don't want to sit at home, can operate. JK Rowling famously wrote much of the early Harry Potter books sat in one of the coffee houses in Edinburgh, because, she claimed, it provided an opportunity to take her baby out for a walk so she would fall asleep (Rowling, 2001). One of the by-products of this modern coffee shop working is that people from different businesses begin to interact and talk and sometimes through these discussions a connection is made. Starbucks is in fact a modern hot house of idea generation, and this is not new but in the early 1700s the growth of the coffee houses provided a new forum for men to talk and swap ideas. In fact this casual gathering of like-minded coffee drinkers is credited with influencing British political and intellectual life for decades (Pelzer, 1982). Pelzer writes: 'For a penny admission charge, any man who was reasonably dressed could smoke his long, clay pipe, sip a dish of coffee, read the newsletters of the day, or enter into conversation with other patrons.'

Innovation reduces risk

There is one final point on innovation and that is the link to supplier and supply chain risk. Embedded within the process of innovation is the analysis and challenge of what has gone before to create what will be taken forward. This process naturally revisits and reviews how value is created by the supplier and throughout the supply chain and in doing so identifies and addresses risk areas. No self-respecting design team is going to deliver the final proposed innovation without the certainty that it can be realized and all the actions required to implement it have been considered and planned for. Therefore companies that continually innovate tend to have a much better understanding of supply side risk as they are continually reviewing their suppliers and supply chains and so are more connected to what is happening. Indeed the Marsh Report (2008) suggests for the supply chain that 'innovators are a whopping nine times more likely than their peers to have consistent, company-wide supply chain risk management processes'.

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