Punching above their weight: the role of networking in SMEs Presented at AUMEC 2009 by Lisa Harris, Alan Rae and Ivan Misner
Who we are <ul><li>Dr Lisa Harris is a Senior Lecturer in Marketing at Southampton University School of Management. She is a Chartered Marketer and a Director of the Chartered Institute of Marketing. Before joining the education sector she worked for 10 years in marketing roles within the international banking industry. </li></ul><ul><li>Dr Alan Rae is Managing Partner of AI Consultants which researches how small companies use IT and develops training programmes for small companies themselves or those who need to work with or sell to them. He is a Fellow of the CIM and sits on its membership and research advisory groups. </li></ul><ul><li>Ivan Misner is a New York Times best selling author. He is also the Founder and Chairman of BNI ( www.bni.com ), the world’s largest referral organisation with thousands of chapters in dozens of countries around the world. Ivan is also the Founder and Visionary behind the Referral Institute, a referral training company ( www.referralintstitute.com ). </li></ul>
The ‘Punch Above Your Weight’ Research Project <ul><li>We studied how small firms are maximising their marketing effectiveness with Web 2.0 tools </li></ul><ul><ul><li>Funded by West Focus </li></ul></ul><ul><ul><li>Built upon the 2006 ‘Abandoned Heroes’ project involving 400 SMEs in London and South East </li></ul></ul><ul><ul><li>30 follow up F2F interviews took place in 2007 and 12 in 2008 </li></ul></ul><ul><ul><li>Project output to date is 3 academic papers, a CPD training course and e-book </li></ul></ul><ul><ul><li>Our latest research as summarised here today examined online and offline networking styles in SMEs </li></ul></ul>
Business Growth <ul><li>Traditional models assume a staged business growth process </li></ul><ul><li>We identified a sub-group of ‘gifted amateurs’ who deliberately stayed small, compensating with a collaborative approach to business using Web 2.0 technologies </li></ul>
Our Networking Project <ul><li>Objectives: </li></ul><ul><ul><li>to analyse how widespread the networking activities of the 'gifted amateurs' group were amongst the wider community of business networkers </li></ul></ul><ul><ul><li>to develop a taxonomy of networking based on size, business model and attitudes of the owner/ manager to growth and online/offline networking balance </li></ul></ul><ul><li>Our findings come from analysis of an online survey completed by 645 firms based in both the USA and Europe. </li></ul>
Peak at 2-4 hours for face to face networking - 16% do lots more
Contribution <ul><li>Group 1 are members of a tight, local community where roles are clearly defined. In these circumstances online networking activity and the value of random connections to the business is low. They have no real ambition to scale and are content to sit in the lower left hand box. (296) </li></ul><ul><li>Group 2 are trying to take their products into a wider arena and are more inclined to be networking with much larger numbers of people. They are more likely to plan, not to want to cooperate, have faster growth and have higher revenues. They follow the traditional growth route to the top right hand quadrant and are more likely to have the resources to act as a bridge between different communities and foster diversity in the form of a dedicated business networker. (204) </li></ul><ul><li>Group 3 avoid growing in the conventional sense through formalised IT systems and increased staffing but compensate by using the tools of web 2.0 to collaborate. They stay in the non-scalable quadrant but significant time spent online networking allows them to view their marketplace through a global lens. They are also skilled at offline networking, endorsing our earlier results (Harris and Rae, 2009a). (63) </li></ul>
Strong ties v weak ties <ul><li>Strong ties can provide credibility and embed the business in local community but restrict its reach and diversity </li></ul><ul><li>Weak ties increase the chance of access to ‘connectors’ who can link diverse groups but make network management more complex and time consuming </li></ul><ul><li>Building on Granovetter (1973) Tetan and Allan (2005) </li></ul><ul><li>Key skill for growth company is the ability to build process – as outlined by Prof. Foss yesterday </li></ul>
Conclusions and further research <ul><li>Online and offline networking are not alternative practices. Strategic networkers are fluent in both, and they expand their reach by either scaling up in a conventional way (Group 2) or they achieve a similar effect using Web 2.0 communication tools while keeping their physical business at a manageable size (Group 3). </li></ul><ul><li>Key challenges for Group 3 include the significant amount of time involved and need for communications to be more transparent, open and honest than in more traditional approaches. </li></ul><ul><li>Our next project will explore the role of weak and strong ties in more depth, using case studies of networking with Twitter </li></ul>
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