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Making The Network Work

post # 347 — April 5, 2007 — a Managing, Strategy post

Do you (or does your firm) belong to a network, where you try to collaborate with individuals and firms that are separate from your own?

Many individuals and firms attempt this, attempting to get the benefits of access to professionals in other locations (cities or countries) or in disciplines other than their own.

These networks exist in many professions, mostly to refer business to each other (or at least that’s where I see them working best.) Occasionally, members of the network try to join up to pitch for business jointly, thereby (if they are successful) winning work they would not have qualified to bid for alone. This does happen, but much less often.

In some case, the benefit is not in revenue increases, but comes from belonging to a group that shares best practices. This can be the biggest benefit if you have mechanisms to facilitate the sharing.

My observation is that it’s very hard to make these networks work very well. The are not disasters, and if the memebership fees are low enough, they can be “clubs” worth joining, but the potential is often unrealized.

Does anyone have views on the best ways to ensure that these networks really do benefit their members? If you are a member, what’s the best way to take advantage of any network you belong to?


Ian Street said:

I recently helped start a networking group as you describe. It is comprised of representatives from different companies (currently there are 5 firms involved), all providing professional services, and all within the same industry (in my case – the construction industry). We meet monthly, and so far it’s been a worthwhile experience (been doing it about 6 months now). It’s main focus is on marketing & business development, and our only requirement is that there be no companies permitted to join that could be considered as a competitor to a company already involved. We all realize that once a competitor is introduced into the mix, the free sharing of thoughts and ideas would come to a stop.

posted on April 5, 2007

Wally Bock said:

I’ve come upon another version of this kind of group. In the musical instrument retailing business, among others, there are groups made up of people from the same industry, but different locations, so that they do no compete. They gain from sharing ideas that are rich in industry-insight. The downside is that those groups rarely deliver breakthrough ideas, since those ideas tend to come from outside.

Another kind of group is the Roundtables I suggest supervisors form in their area. This is a peer group that meets regularly, has modest cost, and is made up of supervisors from different companies. That seems to foster better discussion.

posted on April 5, 2007

Liz Zitzow said:

I go to regular meetings of various groups of US tax accountants working abroad. At round table discussions, courses, and other events that our various networking groups sponsor, we discuss issues such as best practice, how we plan to address a new law, or jointly discuss with high-ranking IRS personnel ways to reduce problems and improve the plight of our clients. The results of one of those meetings resulted in the IRS overhauling it’s e-filing procedures to allow certain additional items necessary for overseas filers. Other meetings I found helpful have been ones where I found out how others were addressing particular problems; which either validated my own solution or prompted me to do further research. This has been of incalculable value to me.

If the organizations hadn’t already existed, I would have formed my own.

posted on April 5, 2007

David (Maister) said:

Reacting to this blogpost, Tom Nixon in the UK had some good thoughts about the networks he’s involved in.

posted on April 5, 2007

Shawn Callahan said:

One of my main services is to help organisations develop these types of networks. We call them communities of practice based on the ideas developed by Etienne Wenger. The ones that work best are focussed on learning with an emphasis on improving a practice (how we do out work).

There are three things a community of practice needs to consider and attend to in order to success: domain, practice and community.

Domain is the topic the community wants to focus activities around.

Practice refers to the tangible things members actually do, usually related to getting work done. These are the things that define your work identity. It might be the practice of facilitating workshops, designing engine parts, presenting a client’s case or selling.

Community is all the relationship work that bind the community. This includes spending time getting to know the other members, eating with them, having drinks, hearing their stories, working on projects together. Without community the network will come apart at the seams.

If you would like to read more about community of practice we have dedicated a category to the topic at our blog: http://www.anecdote.com.au/archives/communities_of_practice/

You can find some more resources at this Squidoo Lens: http://www.squidoo.com/AnecdoteCommunitiesOfPractice/

posted on April 6, 2007

Jim McHugh said:


This is a great topic and one that has been of interest to me for a while. My response may be a bit long, but the story might be helpful if people are considering starting or joining a networking group.

I founded a networking peer group almost four years ago and we call ourselves The Concord Vine. I have also been a long time member of the Boston Chapter of The Association for Corporate Growth (www.acgboston.com).

While the Boston ACG has been a great source of networking and content for me, the Chapter’s membership has become almost too large over the years. The growth is a double-edged sword; it has enabled an expansion in programs, but the meetings have become less intimate, and it is more difficult to “work the crowd”.

This June is the fourth anniversary of The Concord Vine’s startup. Four years ago, I attended the (large) annual ACG Boston Growth Conference. While on a break from the formal sessions, I started chatting with a few friends who live in my town. Soon the impromptu hallway group grew to six people from Concord, MA.

After that meeting, I wondered what it would be like to try to create a more local, casual, fun group of professionals with similar interests. The next morning I sent out an email to all six local people to test out the monthly breakfast concept — everyone quickly responded with a similar message. “Sounds great, let’s try it!” Later, we all dug through our town Rolodexes to find other able and willing bodies. Then, we kicked off Year One of our new experiment in September 2003.

Now, we have 21 members and meet the second Friday of each month.

These are some of the group’s guidelines:

  • Each of our members has a professional connection to some facet of M&A or Corporate Development. Our varied mix includes investment bankers, commercial bankers and other acquisition finance lenders, private equity investors, executives of operating companies oriented to growth through acquisition, and attorneys, accountants, consultants, outside directors, other professional advisors (some people wear multiple hats!).
  • We’re local residents of Concord and surrounding towns.
  • Attendance and participation at meetings is a critical element of the success of the group. Attendance at most of the meetings is an expectation of all members. That thing called work does get in the way of attendance at times… Participation at meetings includes periodically leading a discussion through preparation and presentation of a topic of general interest to the group, as well as participating during group discussions.
  • Size: There are currently 21 people in the group. Our target range is 20-25. We want to remain at a size level where monthly group meetings encourage active dialogue and discussion among the members. This criteria means that the group must be sufficiently large and diverse enough to include a variety of viewpoints but small enough to permit all members to participate in discussions.
  • The meeting format is: general networking from (7:00-7:15); presentation of the topic and discussion (7:15-8:00); more expanded discussion on the topic of the day, “roundtable” sharing of news and requests for help and more socializing for those who wish to stay; adjournment around 9AM

Why do we meet? There are three benefits: Networking, Advice, and Friendship. There is plenty of each that has come out of the group.

I have an article about this with more detail; if anyone is interested in getting a copy, send me an email at jim@mchughco.com.

posted on April 6, 2007

Ford Harding said:


I read your blog with interest. As always, you are leading the way for those who work with professional service firms.

I have belonged to three formal networking groups over my career. Two helped me find and start work with new clients. The third did not, but was a supportive organization when I needed one. Here I only comment on lead generation value.

These groups do work if the members or at least a signifcant number of members: 1) know how to network and have large networks, and 2) sell to the same kinds of organizations that you do. They do not work equally for everyone. Benefits of such groups are distributed along a power curve. A power curve occurs when a few members capture a disproportionate share of the benefits. (Incomes in a country usually form a power curve, with a few very wealthy people at one end and the masses at the other. So do linkages among websites, with sites like Google and Amazon getting the lion’s share of traffic. )

Two factors determine who gets the most benefit from these groups. One is the founder’s advantage. If you have been in the network longer you will reap more benefit. But “fitness” can give both old and new members an advantage, too. Fitness in referral networks includes a) the quality of your services, b) the demand for your services, c) how hard you work the group.

In the group I helped found, three people got the most out of it. They were also the one’s who created the most opportunities for others. Two of the three founders were in the top three beneficiares, exercising founds advantage. The third was a late joiner, but clearlythe fitest of all of us. When you gave him a lead, he would lock his jaw on it and not let go until it turned into a payed project.

posted on April 7, 2007

Splinter said:


On my mind, the main benefit of such networks – sharing experience with other members. I think that the working process of these “clubs” should base on this principle.

posted on May 11, 2007