Networking did not Begin With Social Media

Dale Carnegie’s iconic book How to Win Friends and Influence People, which has sold more than 15 million copies, is recognised to be one of the most successful self-help books ever published and the title and his name became synonymous with the power of business networking and developing business connections to create valuable business relationships. He was first to define traditional business networking skills covering fundamental techniques in handling people, how to make people like you, winning people to your way of thinking and being a leader.

Traditional social interactions relied on participants’ social skills to uncover common interests, shared contacts, shared knowledge and complimentary skills amongst acquaintances. Hence why Dale Carnegie became such a household name in the 1930’s helping people to master these skills. Different types of people with different skills play different roles in this process as Malcolm Gladwell points out in The Tipping Point. Mavens have an uncanny habit of being at the centre of important events providing an essential role in connecting people with both other people and relevant information. They learn how to be in the right place at the right time. Social media technology leverages these different roles to improve the networking process by providing facilities to both push and pull social and connecting information and bringing to the surface people connections across any given network to create value more quickly than in traditional situations. This makes it much easier to identify people, interests and connections to shape opportunities to create value.

The ‘middleman’ was once able to charge a fee, or in economic parlance charge a rent, just for being in the middle. There was no demand for adding value because the other parties were ‘in the dark’. But as communications improved, light was shone into these dark places and ‘middlemen’ either became valuable or were soon eradicated.  This is what is happening to retailers today. Any physical retailer that provides the same service and role as an online ecommerce retailer must also provide the same range of goods, cost of delivery and price. Without providing a better service, a stronger relationship or more trusted brand, modern retailers cannot charge a higher price than their online competitors.

Traditionally, businesses saw any other business providing the same services or selling the same goods as a competitor. But as small businesses were out gunned by the buying power and market position of very large businesses they soon formed buying groups and associations to address the comparative deficiencies. IGA (Independent Grocers of Australia) is a good example where small businesses joined forces to compete with the major supermarket chains. Companies in these groups networked to either increase revenues (advertising campaigns) or decrease costs (bulk buying of stock). Any cost of doing business divided by more than one can add dollars to the bottom line by sharing costs appropriately. In this way competitors both competed and cooperated in the market place. More efficient and effective online communications accelerates this process. As ideas and knowledge became more important to delivering a differentiated service, amortising the cost of creating the ideas and knowledge across more customers had significant impacts on the business and pricing models being applied.  New Internet based communication and collaboration applications again accelerated this process.