Many people, including myself, extol the benefits of networking.  Networking is good because networkers spend much of their time helping others.  They remember birthdays and anniversaries.  They cheer you when you’re sick and they congratulate you when you succeed.  Networking is good, because it helps you meet people you want to know and to build relationships you want to have.  It gets you information you need for your business.  It is good because it helps you get you leads.   Good because it gets you new clients.  All of this overlooks networking’s evil side.

Yes, networking can be used to work for world peace, fight cancer and abolish poverty.  More prosaically, it helps us sell work.  But, it can also be used to fence stolen goods, sell illicit drugs and arrange for a hit man.  Or, as we have recently seen, it can be used to trade stocks on insider information.

The trial of Raj Rajaratnam for allegedly using insider information to beat the odds in the stock market provides all networkers a cautionary tale. Whether innocent or guilty of the charges, Mr. Rajaratnam was a major node in elaborate network of people sharing information on companies and their stocks.  He allegedly did all of things that a good networker does. . . and more.  He allegedly helped his contacts, when they were in trouble, even giving large amounts of money when one person was in a crisis.  He, again allegedly, gave advice and tips freely and also, if wanted, payments to an overseas account.  More subtly, he gave them respect and treated them like players and friends, at least to their faces.

Several members of the network have already pleaded guilty to insider trading, including a senior partner with one of the most prestigious consulting firms in the world, a firm  seen in the business world as the exemplar of propriety.  The well-known, internationally respected, former-managing director of that firm faces civil charges for insider trading with Mr. Rajaratnam.  Both consultants had built stellar reputations on the basis of their professional work and active contributions to charity.  That people like these can become entangled in such a tawdry affair suggests that we should be none too confident that we are above it.

This is all a good reminder that networking is a tactic, an ethically neutral tactic that can be used for good or evil.  Sooner or later, someone in your network will ask you to do something unethical or illegal.  More subtly, an unethical person may do things for you and ask your help in return.  Even if you do nothing wrong, you risk having your name sullied by association with theirs.  Giving in to such people, even if you feel an obligation to them, puts you on a slippery slope.   So, when you run into such people, remember that a good networker will neither ask for unethical favors nor do them for others.  No matter how obliged they feel, they won’t let anyone use  that feeling to compromise their ethics.   They won’t try to persuade you to do something by telling you that everyone does it or that that’s the way the real players do it. Rather, they will make it clear that they want no such thing or they will advise you when you might be at risk of  unintentionally doing something wrong.

When I was a young consultant, a client, recognizing my naïveté, cautioned me that I had just heard information only known insiders and that it wouldn’t be wise to trade in the company’s stock six months or so.  That man was a true friend and a good networker.

A few days ago Ford Harding received a unique email from a professional, Ivan Hernandez.  It was unique and interesting because it was our firm’s first and unsolicited YouTube video referencing his book, Rainmaking: Attract New Clients No Matter What Your Field.  As I watched it for the first time I was so pleased for Ford that a virtual stranger would be so moved and inspired by the book’s teachings.  As I watched it the second time I chuckled at how this video, made much like those that I have of my kids at their birthday parties can capture my attention and entertain me in an odd way.  As I watched it the third, and so far, last time, I recalled the business trend moving towards video and YouTube mentioned in a recent AMCF social media workshop that I attended with the who’s who in consulting and led by gurus of McKinsey & Company and Bliss PR.  I guess the world is moving beyond email, in concert with LinkedIn, with Twitter and towards YouTube?  I needed more convincing, so I quickly searched the internet for data on YouTube to convince myself that YouTube has gone beyond being able to showcase music videos and personal teenage snip-its.  It has. 

I found a study by Burson-Marsteller that collected social media data from 100 of the largest Fortune 500 global companies.  Here are some of their statistics:  50% of the Fortune Global 100 use YouTube to reach their audience.  Of those, 68% posted 10 videos on YouTube in the past month.  69% of the Fortune Global 100 have YouTube Channels.  What amazed me was the statistics on the channels!  They tracked an average of 38,950 views per channel!  452 average subscribers per channel! And more than half of those with YouTube channels said they get comments from viewers! 

That’s inspired me to try an experiment and ask that anyone who is willing to step up to the plate as a YouTuber, share with us another point of view about the book or our Rainmaking programs please do so via a YouTube video and send it to me.  My request has two purposes, first, it will help me answer the question, “Will sharing these videos with you make a difference for us?”  We’ll track it with metrics and share the results with you.  Secondly I’m wading in to YouTube and would love to see a few more relevant ones before I do my own video clips in the market.  Stay tuned for more on YouTube!

For those of you that are curious, here is the YouTube video that Ivan sent to Ford:   

http://ivanhernandezonline.wordpress.com/2010/04/16/the-great-book-series-rain-making/

By Mimi Spangler, Partner, Harding & Company  (mspangler@hardingco.com)

Speakers gain celebrity status at conferences.  Attendees enjoy conversing with the speakers for their knowledge and point of view.  A consulting client shared with me a successful approach his firm uses to maximize the client development opportunities for their conference speakers.  As soon as they are informed that they are a speaker they begin planning a well choreographed dinner!  First they make a reservation for 8 to 12 people at one of the top restaurants at the conference city.  Secondly, they invite a few close clients who love them and who they know will highly recommend their work.  Then they invite another speaker or two whose topics are popular in the market but whose work does not compete with theirs.  Next, they invite some non-competing prospects who can be considered peers to their clients, appreciating that clients love to exchange war stories with their peers.  And lastly, they make sure that the number of people from their office is not overwhelming to the rest of the group, four people maximum.  You can imagine with this make up for dinner that all attendees have a great time  - – - especially their prospects who are now impressed.  Perfect! 

As Spring approaches and more promotional materials for upcoming conferences begin arriving in the mail, I’ve heard many clients are assessing if conference attendance is worth the cost – - which today can be significant.  We are a big advocate of preplanning to get the most bang for your buck.  If you are a speaker at the conference you have lots of relationship development opportunities with both clients and prospects that don’t even occur at the conference!   

1. You can call clients or prospects for their advice and input on your presentation topic. 
2. You can invite contacts to be panel members for your presentation.
3. You can personally invite clients and prospects to your presentation, preferably by phone to continue a conversation flow. 
4. You can ask your contacts if there are other individuals in their organization who would benefit from attending your presentation and invite them too. 

These pre-conference conversations can result in the following benefits:   

-  It’s a great reason to call lots of your contacts to touch base and up your visibility in the marketplace.

-  You reinforce your credibility and industry expertise based on the presentation content. 

-  It reminds people of you and your services oftentimes prompting statements such as, “I’m so glad you called. . . we were thinking about  . . .”

-  Contacts are flattered that you seek their advice and feel good about giving it to you. (nurturing a relationship)

-  You can prepare a better presentation for your audience with greater knowledge as to leading industry challenges.

-  The conversation can validate your presentation conclusions leading to increased confidence in your offering.

-  You expand your network by client referrals to invite others within their organization. 

-  You may learn more about your client’s or prospect’s specific corporate challenges by asking the age-old question at the end of your conversation, “So how are things with you?” and listening.   

All of the activities described in this three part series on “A Speaker Who Knows How to Work It” occur outside of the actual conference.  The conference becomes a means to an end, not the end. 

At some professional service firms, order taking is a common way to get business.  The client calls with no advanced warning and says show up tomorrow.  There is no competition and little, if any, fee negotiation.  Most litigation support firms get a significant share of their cases that way.  So do many valuation consultants.  Some kinds of legal services are also bought in this manner.  Firms that deal with emergencies, whether it be a client’s sudden, bad publicity or a need for a rapid environmental cleanup, are additional examples of those who often benefit from order taking.

It sounds like an easy way to get business.   But it isn’t.   In these cases the client feels a high sense of urgency and needs to trust the professional he hires.  This leads to a conservative approach to selecting a professional; the client is likely to go with the firm who did good work for him in the past.  That makes it hard to get new clients, including the new clients needed to replace old ones, who retire or cease to give you business for some other reason.  Firms or practices which get business this way run the risk of having too  much work with too few clients, exposing them to sudden revenue drops, if something happens to a key client.

Just as you would be unlikely to welcome a pitch from a watch repairman, if your watch was working, clients are often reluctant to spend much time with professionals who offer such services, when they don’t have an immediate need.  When they do, they are in a hurry to get help and don’t have time to expend much time researching alternatives.  The problem is compounded when the client’s need is confidential as well as being urgent, such as when a client knows his company is likely to receive some devastating publicity and doesn’t want the bad news to come out any sooner than necessary.

Effective selling of these kinds of professional services requires far more than answering the phone.  Rainmakers for these kinds of services typically select from three options:

• Public Relations:  They can seek publicity in order to increase the likelihood that prospective clients will stumble across their name when an event drives a need for their services.  This, of course, works best when the service meets two criteria:  First, it can’t be so confidential that the profession can never reveal work done and  client names and, second, it must have enough sex appeal to be worth of media attention.  For many years, I worked as a location consultant, helping companies pick locations for new factories, offices and research labs.  That service met both of these criteria, and we worked the publicity channel hard.
• Networks:  They can develop relationships with other professionals, who have early access to information about a client’s need for help.  So, for example, many turn around executives work hard to develop relationships with the workout specialists at bank and with bankruptcy attorneys.
• Developing Client Relationships: They find ways to develop relationships with clients in anticipation of the need, in effect making the sale before the need arises.  This works best when the client is likely to have intermittent need, such as a litigator’s periodic need for a jury selection consultant.  It is a hard route, given busy clients’ unwillingness to expend a lot of time learning about services they don’t have a need for now.  In such cases, the professional must link relationship-building to a client’s more immediate needs, for example, by providing training that will meet a client’s need for continuing education credits or providing friendship on the golf course.

When the phone rings and a professional selling such a service gets an order from a new client, it usually results from a lot of hard work.  Order taking isn’t so easy.

By Ford Harding and Mimi Spangler

Schmoozing is to networking what carbonation is to beer; you can do without it, but it’s bound to be flat if you do.  The definitions we have seen of the term are unsatisfactory.  It clearly is a way of conversing, though hardly casual, as one dictionary describes it, even if it may seem so.  It does have a purpose, though not solely to gain advantage, as another dictionary says, because often there is a give element, too.

We define it as low-key conversing on business and personal issues to give and gain advantage.  It is the conversational part of networking.  Done right, it is engaging, light, personal, caring, helpful and purposeful.  And it has undoubtedly been around since the dawn of commerce.  They schmoozed in the Hanseatic League, they schmoozed along the Silk Road, and they schmoozed before that in the prehistoric and early historic towns of the Fertile Crescent.

Schmoozing has had to adapt to technological change in the past. Today, much schmoozing is done by phone, though at some time in the past doing so must have seemed an oddity.  Tele-schmoozing became more frequent as the technology improved, phones became more common, and as telephone costs came down.

The rise of the internet has brought a new technological challenge to schmoozers.  To schmooze, you must converse, and conversing over what has in its early days been a largely asynchronous medium is hard.  And if you can’t schmooze over the internet, can you network over it?  Not effectively, we would argue.

The lack of easy synchronous communication still limits schmoozing on some social networking platforms, like LinkedIn, points out Elizabeth Sosnow, Managing Director and Social Media Lead at BlissPR.  But the ease of synchronous communications is developing rapidly.  Sosnow finds Twitter the preferred vehicle.  Starting from scratch eighteen months ago, she now has 4,500 followers on Twitter.  And she is generating leads from that source.

With advances in the technology, like Twitter and texting, that remove barriers to conversing, e-schmooze has arrived.  This is how it is done today:

• Information easily found on the internet serves as an enabler for e-schmooze.  Schmoozing is purposeful and it is easier to develop a purpose when you have greater access to information about your contacts.  For example, knowing in advance through Linked-In that Persons A, B and C are linked to Person D makes it easier and more efficient to have a conversation about D.
• Tweeting or texting contacts with bits of helpful news, congratulations and requests for information or advice provide starters for electronic conversations, just as they do when schmoozing face-to-face or by phone.  The advantage of the e-schmooze is the potential to start this conversation with many people at once, far more than can be done with the traditional schmooze, which requires calling contacts one at a time, or, at best, meeting with a small group.   This allows to e-schmoozer to out-network competitors.
• E-schmoozers then follow up with groups or individuals, depending on responses to a conversation-starter.
• As the e-schmoozer gets to know individual contacts through such exchanges, his conversations can become more personal and focused.
• E-schmoozing sometimes involves rapid exchanges that cover both personal and business issues.  These exchanges are more effective, if they sometimes meander between business and personal issues, just as voice conversations do, and if they involve humor and sincere interest in the other person.
• E-schmoozing works best if it is but a part of a wider range of communications, including voice and faces-to-face conversations.  Tweets and other electronic communications may first put you in touch with a contact and help you advance the relationship; the relationship will be stronger if you also eventually meet and talk by phone.

This is not rocket science, but are you doing it?  If not, the muscle the internet provides will allow others, more youthful and technologically sophisticated, to out-schmooze you.

Twice in recent weeks I have been told that no one makes phone calls anymore.  One person, who I will call Lenore, put it this way:

No one uses the phone just to stay in touch with old clients and maintain relationships anymore.  The phone is too intrusive, and clients prefer emails, which are more convenient for them.  They’re too busy to take calls.  Today, the phone is just for when you have something specific and important to talk about.

Is Lenore right in saying that the phone shall nevermore be used for staying in touch, schmoozing and developing relationships when selling professional services?  Or is this  just the latest in an endless list of excuses to mask call avoidance?

At any networking event we risk getting stuck talking to one individual who would keep us there all night, if we allow it.  I will call this person Lizzie Boredom.  If you spend too much time with her, you lose the benefits of having come to event in the first place.  We need to move away from her as quickly as can be done politely.  At all costs, we must get away before we are trapped into sitting next to her through the entire dinner that follows.   Here are some ways to escape her:

The Old Standby

Lizzie Boredom:  Blah, blah, blah, blah, blah . . .

You:  Excuse me, Lizzie.  I need to refresh my drink.

The Socially Connected

Lizzie Boredom:  Blah, blah, blah, blah, blah . . .

You:  Excuse me, Lizzie.  I see someone who I have been trying to reach for a week and I must go talk to her.

The Desperate

Lizzie Boredom:  Blah, blah, blah, blah, blah . . .

You:  Excuse me, Lizzie.  Before dinner starts, I simply must find a restroom.

The Devious

Lizzie Boredom:  Blah, blah, blah, blah, blah . . .

You:  Oh, John, come over here for a second.  You should meet Lizzie Boredom.  Lizzie, this is John.

John:   It’s nice to meet you, Lizzie.

Lizzie Boredom:  Blah, blah, blah, blah, blah . . .

You:  Excuse me, you two.  I see someone I must talk to.

The Deceptive

Lizzie Boredom:  Blah, blah, blah, blah, blah . . .

You (after subtly punching the speed-dial number for your own cell-phone):  Excuse me, Lizzie, but that’s a call I simply must take.

The Direct

Lizzie Boredom:  Blah, blah, blah, blah, blah . . .

You:  Well, Lizzie, I’ve enjoyed talking with you, but must circulate to see some other people before the evening is out.  I look forward to seeing you again at the next of these gatherings.

Slippage refers to the difference in price for a stock between what the investors estimates he will pay and what he actually does pay, due to changes in price that occur during the process of buying. Efficient buying reduces slippage.  It is a concept that applies to selling professional services, too.

There are times when a client or prospective client or network contact is more than usually predisposed to help you.  This can be, for example:

• When you have just finished an excellent piece of work for the client.
• When the prospective client becomes excited about your potential to help him.
• When you have just had a conversation at a conference with a network contact that shows the potential you have for helping each other.

The value of such opportunities fades as time passes.  The client’s desire to help you in return for the excellent work you did ebbs as she gets absorbed by other urgent matters.  The prospective client loses some of the enthusiasm generated at your meeting.  The network contact also forgets the conversation you had as the days go by.

This is one of the reasons that rainmakers feel a sense of urgency about following up.  No matter how busy they are, they find time to follow up on such opportunities, recognizing that all their hard work to produce them loses value as time slips by.

I don’t want to overwork this metaphor.  Following up too eagerly can be construed as desperation or as being mercenary.   But, in my experience, among professionals far more is lost from slippage than from pushing too fast and too hard.  And, of course, I am not suggesting that you give up on an opportunity if a week or three has slipped by before you act.  Better late than never.

Still, as a New Year’s resolution, you could do worse than committing to reduce rainmaking slippage by following up on opportunities while the glow you have created burns brightest.

About a year ago, I ran a post asking how big a business referral network should be.  Steve Shue, always helpful, posted a comment with links to discussions about Dunbar Numbers.  Anthropologist Robin Dunbar hypothesized that a person could maintain around 150 stable relationships.  Other estimates from other studies generally fall in this order of magnitude, though electronic communications may increase the number.

I have thought about Dunbar Numbers ever since and have some observations about them.  First, definitions of “stable” may vary in different circumstances.  For example, an auditor may only count client relationships that last many years as stable, but a professional who does many small projects, say a competitive intelligence consultant, may describe some relationships that last less than five years with the same word.

Second, not all relationships in a network are stable.  We need to sort through several unstable relationships to find each one that becomes stable.  Because the competitive intelligence consultant has a higher turnover rate in his core, stable network, he needs a larger pool of total relationships than the auditor does, in order to winnow through enough unstable relationships to keep sufficient stable ones.  In my experience professionals with evergreen services generally don’t have networks as large as those who sell project work.

Third, when a person first deliberately starts to build a network, she must winnow through a large number of unstable relationships to do so.   Also, in my experience, people building a practice must actively work larger networks than those who are well established.

Fourth, we do not look for stability in every relationship.  It is quite possible to network with a person for a few months or years and then find that mutual benefit from doing so declines.  Networks are full of special cases for special purposes, such as the person an architect networks with to pursue work in a specific distant location once or twice in a career.

All of this is a long way of making the point that to have a good referral network, you probably need to know more people than you think you do.