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Bruce Holland

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Denford Mc Donald, Chairman of WELTECH, told me something very wise. He said that only three things are really important to anyone's career. These are to:

  1. Build relationships
  2. Communicate effectively
  3. Sell yourself.

I agree with him. When you think about it, we all have our specialist skills but in the end it's these three generic skills that make the most difference.

Today's Strategic Snippet is about how to network and build relationships. I think it is probably the most important single thing you can do in business to be more personally successful. I'm sure that you know this at an intuitive level and its backed up by loads of research, and yet, despite all the rhetoric most of us still act as though structure and technology are what really matters in business. Relationships are treated as an inconvenience. Wherever there is an opportunity to automate a transaction or communicate electronically, we take it. We have reached the point where most phone conversations involving a machine on one end at least, where learning from a computer is considered an advantage, where tea breaks are rare and where we reward people with individual incentives rather than group rewards.

There is a whole science around how networks work. Today I intend to cover only three aspects but you really need to understand all of them in order to be successful at networking and building relationships.

1. Networking is an unbelievably good business

To demonstrate, I'd like you to imagine that you have a great big piece of paper. If you fold the paper you now have two layers, and if you fold it again you have four layers. Now I want you to imagine that you continue doing this until you have folded the paper 50 times. How tall do you think the pile of paper would be?

When I have asked this in groups, people have guessed that it may be as thick as a telephone book. Others have guessed that it might be as tall as a person. I think the most extreme guess has been that it might be as tall as a building. In actual fact a piece of paper folded 50 times would stretch almost to the sun. And if you folded it one more time, it would come back again. This is the power of exponential increases.

Now networks don't work in quite the same way, but they are not far from it. Networks increase according to Metcalfe's Law which is a form of exponential increase. For example if you have three people in a network, you will have three relationships. If you double the network to six people, you will have 15 relationships.

I can not think of many businesses that have returns anything like this. It means that when you increase your network you are not adding to it, you are multiplying its value exponentially. When you spend time building networks and relationships you obtain returns that almost no other business will provide.

2. The importance of switches

Let's suppose we have six people in the network, three on one side of a switch and three on the other side of the switch. The switch only has to maintain six relationships rather than the 15 relationships that would be required without the switch. Becoming a switch is a highly successful business model because it reduces the transaction costs of networks enormously. This is something people are prepared to pay for. It has real value. Virtual Group is a good example of a switch. On one side of the switch we have 20 business specialists, on the other side of the switch we have several hundred clients. Virtual Group brings them together with far lower transaction costs than would otherwise be required.

3. Weak ties

The third thing about networks is probably the most surprising of all. I'm sure you have heard about the six degrees of separation - how each person in the world is separated from every other person in the world by no more than six relationships. This connectedness occurs because of what is known as weak ties. Without weak ties we would be separated, not by six degrees of separation, but by 60 million degrees of separation. As you can see weak ties are unbelievably important when it comes to networks. And you need very few of them to make this order of difference.

These are only some of the things you simply must know about if you want to become good at networking and good at building relationships.

Recently I have been talking to conferences about these issues, specifically about how they apply to building relationships between organisations within a Sector. Today, more and more, we are finding that a single organisation is unable to achieve its outputs on its own. It simply must come together in order to have any chance of success. This means building networks and building relationships across the Sector.

Best wishes


Bruce Holland

Helps large organisations be focussed, fast and flexible. Places where people have more meaning, depth and connection.

Expert in Strategy, Structure, Culture and Leadership Development.

One of NZ's most experienced change agents.

Liberating the Human Spirit at Work
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