The Value of Relationships to Your Success

 

Interlocking relationships benefit everyone.

Interlocking relationships benefit everyone.

As a member of Business Power Network, you already have a sense of the importance of relationships in attaining success. A study published in 2012 illustrates how your fellow BPN members and other individuals in your social network can help you implement your strategy at different phases of the business life cycle (Bhat and McCline 2012).

The authors report that an entrepreneur’s social network can be a vital source of (a) technical support regarding your product or service offering; (b) manpower, or help with business-related activities; and (c) helpful information about gaining access to the market. Furthermore, different types of social networks, including industry contacts and personal relationships with friends or relatives, provide varying levels of help at different stages of development, from the start-up phase, through the growth and long-term success stages.

When the authors asked 13 South Asian entrepreneurs about the role of social networks in the process of building their business ventures, interviewees consistently emphasized the importance of networking and building connections within the business community. Another important characteristic mentioned was the importance of cultivating a sense of curiosity, or an interest in learning useful information from the people in one’s social networks.

The interviews were followed by an online survey completed by 80 South Asian high-tech entrepreneurs. Industry contacts and former co-workers were rated as important sources of technical support when launching a new venture, while friends were often rated as a source of manpower, or help in carrying out business activities. Family members were only rated highly as a potential source of financial assistance in starting a new business.

Although personal relationships with friends and family played an active role when respondents were considering whether to launch a new venture, the emphasis clearly shifted to business relationships beginning with the start-up phase, as illustrated by the table below.

Business Life Cycle Phase

Start-Up Phase Growth Phase Long-Term Success
Tier One   Relationships Industry ContactsFormer Co-workersFriends Industry ContactsFormer Co-workers Industry ContactsFormer Co-workers
Tier Two   Relationships Family MembersClassmates FriendsClassmates Friends
Tier Three   Relationships Organization Members FamilyOrganization Members ClassmatesFamily

 

The information demonstrates the importance of the “social context” of your business activities. Entrepreneurs consistently rated industry contacts as having “Tier One” importance at the startup, growth, and long-term success phases of operations. Former co-workers also rated highly at the startup and growth phases.

As for personal relationships, friends get Tier One importance for the startup phase only, while relatives are really only important as a source of financing at the startup phase. Former classmates and fellow organizational members also played a less significant role as a source of business support when compared to other relationship categories.

Even if your individual context differs from that of the respondents included here, the study shows the importance of recognizing the people you know as a key component in your success. When developing and executing your strategy at different stages of the business life cycle, think of the technical, operational, and marketing resources you need.

Next, review all of the connections you have. They could be members of BPN or another BNI chapter, customers, colleagues, or anyone in your network of relationships. Then determine who would be willing and able to provide help in crucial areas of your business.

Finally, consider ways in which you can enhance your value in the marketplace by providing similar types of assistance to others who would benefit from incorporating your skillset into building the long-term success of their own ventures.

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Source: Bhat, Subodh, and Richard L. McCline. (2012). An Exploratory Investigation into the Role and Importance of Networking Partners of South Asian Entrepreneurs in the Venture Creation Process. International Journal of Entrepreneurship, 16, 37-62.