I make my living by teaching people about networking – what it is, why it’s helpful and, crucially, how to do it better. So perhaps you won’t be surprised if my answer to the question above is, unequivocally ‘true’.Â
I’m not alone in my view; in fact, a plethora of academic research – and practical business experience – supports my stance and, over these two pages, I will take a look at some of the evidence.
First out of the hat is the work of Ronald Burt, Professor of Sociology and Strategy at the University of Chicago. In a 2014 study, ‘Structural Holes and Good Ideas’ published in the American Journal of Sociology, he reported on the findings of a survey of 673 managers who ran the supply chain of a large US electronics corporation.Â
Burt looked at the shape and size of their professional networks, and how they interacted with colleagues within their business units, as well as elsewhere within and outside the company. Second, he measured two things: the likelihood of their expressing a new idea, and the likelihood that senior management would engage with that idea and judge it to be valuable.
Burt’s results show that innovation isn’t necessarily born out of individual genius or, to use a well-worn cliché, ‘blue-sky thinking’. Instead he demonstrates that the individuals who build diverse networks, so that they themselves become bridges (or brokers) between different social or professional groups, are at greater ‘risk of having a good idea’.Â
Not rocket science, perhaps. But the idea that good, innovative ideas have ‘social origins’ is powerful nevertheless. To quote Burt’s own succinct phrase in the same report: ‘This is not creativity born of genius; it is creativity as an import-export business’.Â
Innovators aren’t necessarily exceptionally smart people with exceptionally creative minds – bright sparks who think differently. They can be people just like you and me, who do two very important things differently: they mix with a wide variety of individuals – not just their close friends – and they listen as well as talk.
In 2010, Louise Mors, Professor of Strategic Management and Globalisation at Copenhagen Business School, conducted a study of a global consulting firm and her findings were published in Strategic Management Journal under the title ‘Innovation in a global consulting firm: When the problem is too much diversity’. Mors set out to understand more clearly ‘how network structure affects the ability of individual managers to innovate’.
To innovate successfully, partners and senior managers in knowledge-based businesses actually have to deal with two challenges. First, they have to find novel information and ideas. And second, they need to be able to evaluate them, spread the word and, finally, implement them. Successful innovation isn’t just about having good ideas. Putting these ideas into practice and getting buy-in from colleagues is equally important.
Mors found that managers deal with both of these challenges by nurturing and tapping into different sorts of personal networks, both within and outside the organisation. She reported that finding innovative ideas is best achieved through an open network, in which relatively few people are connected to each other. Interacting with a very wide variety of people, from different backgrounds and with different mindsets, exposes managers to more and more varied ideas.Â
On the other hand, if an innovator wants to implement a new idea or persuade others to do so, it’s easier if his or her network is denser, with more overlapping connections. In her study, Mors doesn’t explain why, but it is safe to assume that the people in these denser networks talk to and respect one another.Â
You don’t necessarily need to convince each and every member of your network separately; by talking to each other they will help spread the word, and do some of the work for you.
In a very different study among open source software developers, Karim Lakhani, Professor of Business Administration at Harvard Business School, came up with similar findings: often, he says, it was ‘outsiders – those with expertise at the periphery of a problem’s field – who were most likely to find answers and do so quickly’.
Many organisations recognise that networks and networking are critical to innovation. That’s why they are realising the need to encourage their staff to mingle and talk to each other, both internally and with colleagues in the wider business network, on a social, as well as a purely instrumental, level. Water coolers, canteens and social activities all have an important role to play – as do more formal contexts such as conferences, seminars and other professional gatherings.
It’s also why so many mega-corporations are turning to open innovation in order to maintain their competitive advantage. Instead of confining innovation within a fortress-like, internal research and development lab, corporates such as Procter and Gamble and GlaxoSmithKline are demolishing those walls and asking the network to provide new ideas and new solutions.Â
Returning to Burt, it’s interesting to note his data revealed that active networkers, who act as brokers between groups, reap personal benefits too in the form of ‘more positive performance evaluations, faster promotions, higher compensation and more successful teams’. Put simply, there’s plenty of evidence to show that by nurturing a wide-ranging network, individuals are much more likely to be successful in their careers.Â
So what’s good for your employer in terms of successful innovation, turns out to be good for you too.
The benefits of socially generated innovation aren’t confined to individuals, or even ‘joined together’ as companies, though. Cities and societies can benefit from this too.Â
Richard Florida, Director of the Martin Prosperity Institute and Professor of Business and Creativity at the Rotman School of Management, University of Toronto, has developed what he calls the Gay Concentration Index, which he describes in his book The Rise Of The Creative Class. He writes that the tolerance a city shows for lesbian, gay, bisexual and transgender (LGBT) people correlates rather well with how successful that city is in today’s fast-moving world.Â
That’s not because people who are homosexual are more creative or intelligent.
It is simply because diversity leads to innovation and innovation leads to prosperity. The Gay Concentration Index is just a shorthand technique for measuring diversity. To quote Florida: ‘Cities with thriving arts and cultural climates and openness to diversity of all sorts… enjoy higher rates of innovation and high-wage economic growth.’
Reading about academic studies which show that networks can be the key to innovation is all well and good, but sometimes it’s easier to be motivated when you hear an engaging case study – so here’s a real story that Shell transformed into a short film for an advertising campaign a couple of years
back. (You can watch the film online).
The film shows Jaap van Ballegoolien, an engineer with Shell, who is struggling to find a way of tapping thousands of small pockets of oil in an oil field in south-east Asia. The only viable way of reaching the oil would be to drill thousands of wells – a solution which is both uneconomic and environmentally unacceptable.
On a visit home, Jaap takes his teenage son Max out for a hamburger and milkshake. As they talk, Max turns his straw upside down, bends the top and uses it to suck every last bit of gloopy milkshake from the bottom of the glass. Jaap is mesmerised – and an innovative solution to his technical problem in south-east Asia is born.
At the end of the film, we see Jaap proudly presenting his ‘bendy straw drill’ to colleagues. This innovative technology, born of an observant mind and a chance encounter, allows a single bendy pipeline to reach numerous pockets of oil.
If constant and continuous innovation is at least one of the keys to success in today’s fast-changing world, then it’s important to have more – and better – good ideas yourself, and to empower your teams to do the same. The answer isn’t simply to hire creative types, to ‘try harder’ or ‘be more focused’. In fact, sometimes, trying a little bit less and chatting a little bit more just might reap more benefits.Â
Networking is about people. Talking to people, helping people and getting involved in their lives. Those who don’t mingle only with colleagues in the same company, the same department or the same sector, are more likely to be exposed to different ways of doing things. And so long as they are open enough to listen, creative enough to envisage possibilities, and perhaps humble enough to ask, they’ll be better able to transfer and adapt ideas from one context to another. Networking alone probably won’t give rise to a flood of innovation. But networking actively, and encouraging it among colleagues and staff, will certainly shorten the odds in favour of creating an innovative culture.
Judith Perle became involved in management training after completing the Sloan Fellowship at London Business School (LBS). While at LBS, she and her colleague Tony Newton realised that although many leaders pride themselves on having the hard skills to get the job done, these technical skills often only ‘get you through the door’. Success often depends on the ‘softer’ interpersonal skills that are too often overlooked or under-valued. Judith brings to her training work experience in business communication gained over a career in publishing, branding and new business development.Â
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