Why Business Networks Are Important?

supply chain management

“Call it a clan, call it a network, call it a tribe, call it a family. Whatever you call it, whoever you are, you need one.”

-Jane Howard

Business Networks are important to accelerate and sustain success for any individual or organization. It is imperative to learn from the evolution and success of business networks. Business structures have evolved radically to such a degree that nowadays, most businesses have no option but to create business networks.

Business Networks are more important than your business infrastructure

Naturally your business infrastructure is fixed, rigid and cost accruing. Your business networks, on the other hand, are evolutionary, flexible and revenue accruing.

Business Networks make your business more resilient and responsive – at the same time.

Those businesses which had the most responsive and resilient business networks were the ones to recover from any downfall the quickest. See who survived the global economic downturn during 2008 – 2009.

When Cash is the King – Business Networks Triumph

Data is visibly conclusive that in times of cash crisis, the quality of their business networks saves companies. Those with more robust business networks have far more superior cash conversion cycles, nearly 6 times better. In fact, as pointed out by Aberdeen Group, business network masters improve their cash to cash cycle leading up to the Global Financial Crisis while the rest of the industry went backwards.

In boom times Business Networks Give You Speed

Even relatively smaller businesses can achieve remarkable results quickly based on the responsiveness of their business networks. In economic booms, whether accompanied by economic volatility, or economic stability, business networks allow you to realize higher profits, quickly. The potential of your company’s capabilities are multiplied many times over, by the leverage effect provided by your business network. This is only possible through extensive utilization of business networks that the company has built, nurtured and managed effectively. Most executives grossly under-estimate the value and efficacy of business networks in ramping up capacity rapidly in boom times.

Business Networks Help Smooth out Volatility

Especially during times of extreme volatility, we see airlines and shipping companies forming global service alliances to ride out the season and economic peaks and troughs. In such volatile business environments, budgeting and planning can become a nerve-racking exercise for all companies except those which use their business networks to cushion the lean periods with long term contracts and find scarce capacity during boom periods. Supply chain is unique to every company and industry, formulated over a number of decades in many cases, and is worth several trillions of dollars in value.

Valuation of Business Networks is Astronomical, Though Difficult to Quantify

Estimates range into trillions of dollars, and yet may be underestimating the full extent and power of these hidden business resources. The magic of business networks has made it possible to design, build, launch and sell revolutionary products in less than one-third time of the industry. If you cannot make your business networks more visible and manage them more proactively, you may be silently yielding the competitive advantage to others who can. It is, after all, the obtainable magic.

Want to start now? Create your own 5-Star Business Network today.

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Vivek Sood

I write about "The Supply Chain CEOs", "The 5-STAR Business Networks", and, how to "Unchain Your Corporation". In my work, I help create extraordinary corporate results using several 'unique' supply chain methodologies. Contact me for interesting, high impact projects, or, to get access to my IP for creating transformations using these methodologies.

  • John says:

    Here are my inputs- Network is important because Networking is the single most powerful marketing tactic to accelerate and sustain success for any individual or organization.

    Building a successful business takes a lot of time and dedication, so it is sensible to have a network of business partners and associates to draw energy from and keep you motivated. By surrounding yourself with people who share a similar passion and determination, you are more likely to move forward and achieve results. Business networking is a really valuable way to expand your knowledge, learn from the success of others, get new clients and tell others about your business.

  • marlian says:

    Business networking is a really valuable way to expand your knowledge, learn from the success of others, get new clients and tell others about your business. A strong and active business network has advantages that can make your business grow and flourish. It is expected that networking will result in opportunities.

  • serlinda Brank says:

    Business networking is a really valuable way to expand your knowledge, learn from the success of others, get new clients and tell others about your business. A strong and active business network has advantages that can make your business grow and flourish. It is expected that networking will result in opportunities.

    One thing I would like to ask you regarding business network leads.

    Are you attending networking events and not generating any business leads?

    When you go to a networking event, your conversations will be a lot more fruitful if you ask better questions than the standard, run-of-the-mill “What do you do?”, “How’s business?”, “What have you been up to?” Such questions aren’t necessarily bad and I’m not saying don’t ask them, but it really doesn’t leave you much room to maneuver after you’ve both have answered them.

  • elavo says:

    It can help you start your own business and climb the career ladder.
    Networking is fun, enriching, career-enhancing and thought-provoking. But most of you already know this. To those of you that prefer to keep to yourselves: gear up your engines, as we are about to give you five reasons why networking matters.

    Networking can help you climb the career ladder
    While not all students think of starting their own business, some choose to work for others and make a robust career. You can easily talk to people and gauge different career opportunities in order to climb up the career ladder, and there is no better place to do it other than your MBA classroom. You may not meet a person working for the same company as you across the border, but you are definitely bound to meet people who are working in the same industry or in an industry that you are interested in. They can tell you about companies you didn’t even know existed, opportunities at companies you did know existed, but could never learn about from open channels, or even some tips on landing a job in the industry, you thought you knew, but ultimately didn’t.

    And if that is too confusing to you, try grasping public-private funding of space exploration! Come to think of it, networking could probably help with that, too. After all, Elon Musk met all kinds of people at the University of Pennsylvania and Stanford, which inspired him to found SpaceX later in his life…(https://bit.ly/2IIxxNs)

  • CEO Supply Chain says:

    No matter what industry you’re in, networking is always a good idea for business professionals wishing to build relationships and grow their influence. Remember all that networking has to offer the next time you restock your business cards and share them with new connections! By growing your network, opportunities arise, business partners appear, connections are made and trust is garnered in the local community. Here are just a few of the reasons networking is so crucial to success.

  • Gleb Anderson says:

    Could I adopt business network in my business?

    As I read this blog, It is showing benefits of business network like we can grow faster in business boom time. How can I adopt it for my IT solution business?

    Is it beneficial for me also to grow my business?

    • Vivek Sood says:

      Very much so. What do you think of the relationship between hardware vendors and software vendors is? Now add multiple vendors for each these two – and imagine the B2B network surrounding a typical large corporation. A company I know has more than 500 software vendors.

      Even a small household today will have dozens (including apps perhaps hundred or more)!

  • Amy Walsh says:

    I wholeheartedly agree with everything you have written in this article Vivek. Whether you are running a business or developing your career, networking is essential to building and maintaining business relationships. Effective networking takes practice and preparation, but moreover, it takes patience. Networking is about collecting relationships with interesting or influential people irrespective of the immediate benefit of these relationships. Often the time, energy, stress and money we put into going to non-profit galas, Chamber of Commerce celebrations, leadership functions and business grand openings are dismissed as a waste of time and a burden on your social and family calendars. But I truly believe that coordinating networking opportunities at least once or twice a month is a great investment in your future.

  • Wilson says:

    Networking is one of the most essential personal skills for business people, but it is extremely important for entrepreneurs. Communication and strong presence in the entrepreneurial ecosystem are productive approaches which will help you along your way to building strong relationships with other entrepreneurs from different age groups, nationality, and fields of interest. Business networking events organized around the world bring together extraordinary groups of highly-skilled and talented entrepreneurs who are united around the idea of communication, sharing, creating and developing ideas and last but not least meeting with potential investors. These events attract people from different experience levels and backgrounds. All these people are looking for connection, inspiration, advice, opportunities, and mentors.

  • Nyfain says:

    Investing your time and effort in networking should be an essential part of your job. It’s important to remember that networking is not selling, but rather it’s opening the door to new opportunities. Look at the big picture: networking is more like running a marathon than sprinting. With patience, preparation and smart execution, the dividends of business networking will benefit you and your business. Networking in a variety of environments with a diverse group of people that represent multiple industries builds character. The more you interact with others and tell your business story, the more confident you become. Also, your listening skills will improve. Eventually, you’ll find yourself relaxed and having fun and making new contacts.

  • Ayla Fecero says:

    Networking is powerful in many different ways. Not only entrepreneurs will feel inspired and motivated after attending specific events or meetups, but also many exceptional opportunities can occur if they impress potential investors or business partners. Do not forget to be yourself and present your company the way you want other people to see it in order to create honest fundamentals for one potential business relationship. In order to impersonate your business and yourself, it is not enough just to be present, you need to be active, memorable, to provide value to the others with your presence and to make them want to stay in touch with you. Be ready to impress, to be remembered and desirable for future business relations.

  • Jana Cook says:

    Approach networking as any other part of your business. Create a plan with specific goals that you need to follow. Know when, where and why you are going to an event, what your goals are and what do you want to achieve with your attendance to this particular meet up. As an entrepreneur, your time is very important and you must have a clear vision of what you are going to spend it on. Cautiously select your options and choose the one that will bring the most advantages to your business. It is widely known that connections come as a result of other connections and as usual, the hardest part of the whole network-building process is the start.

  • Emma McColl says:

    I get it, Sood, networking isn’t at the top of everyone’s to-do list. It can be time-consuming, downright awkward on occasion, and depending on your personality, incredibly draining. When your calendar is already overcrowded with work appointments and family commitments, the last thing you want to do is make small talk with strangers at yet another cocktail party. However, there’s no denying the power a strong professional network can have over your career success. When it’s done well, networking will not only help you land a job faster, but it will give you a competitive edge throughout every stage of your career.

  • Yanick Beggs says:

    Networking isn’t merely the exchange of information with others, and it’s certainly not about begging for favors. Networking is about establishing and nurturing long-term, mutually beneficial relationships with the people you meet, whether you’re waiting to order your morning coffee, participating in an intramural sports league, or attending a work conference. You don’t have to join several professional associations and attend every networking event that comes your way in order to be a successful networker. In fact, if you take your eyes off your smartphone when you’re out in public, you’ll see that networking opportunities are all around you every day.

  • Scott says:

    Career development, in its simplest terms, is the lifelong evolution of your career. It’s influenced by a number of things that include the jobs you hold, the experiences you gain in and out of the office, the success you achieve at each stage of your career, the formal and informal education and training you receive, and the feedback you’re provided with along the way. Ideally, organizations would place more emphasis on employee development in the workplace. The burden is on you to take control of your career development. Hence the importance of networking for career development: As you network with people at your company, in your industry, and even outside your field of interest, you’ll uncover opportunities to connect with different types of mentors and advisors, increase your visibility with senior management, further develop your areas of expertise, and improve your soft skills.

  • Glen Lyn says:

    Although networking can be daunting, it allows you to practice your communication skills in multiple professional settings. Your ability to talk about your career, business, and yourself on the fly will become second nature and therefore, networking will no longer be intimidating but instead a professional development pursuit! Your comfort level will showcase your confidence, making you more approachable and taken more seriously. Networking will help you develop and improve your skill set, stay on top of the latest trends in your industry, keep a pulse on the job market, meet prospective mentors, partners, and clients, and gain access to the necessary resources that will foster your career development.

  • Sandra says:

    Good article Vivek. Whether it is professional relationships or solid friendships, networking is surely the key to achieving both! Widening your circle of influences is beneficial in career growth as well as self-growth. With each person you meet, you will learn something new and this will enhance your skills. Another perk to meeting like-minded individuals or influences are the unknown opportunities it will bring in the future. Just be ready to open the door when an opportunity does come knocking! Building your connections will provide you with an invaluable opportunity to best prepare for your career goals. It is important to remember that networking is a mutually beneficial process. You never know when your skills and resources can prove to be beneficial to others in your network.

  • Reddy Zoe says:

    In the era of communication, it is unnatural to limit yourself by staying solely local, even if your business is devoted to the local community. Attending international meetings and reaching out to people from around the world will expand your vision and improve your business approach. Meeting other entrepreneurs, angel investors, bloggers and all other business enthusiasts will inspire you to reach for your personal improvement. Once you meet the people you wanted to establish a relationship with keeping this connection going after the event. Stay in touch and manage to continue the actual communication which will be a foundation for your strong relationship and network. Do not underestimate the power of local networking and attend networking events and meetups around you. Knowing the local community has a great advantage and you never know where the next big chance or inspiration will come from.

  • Arnold says:

    It goes without saying that networking is incredibly important during a job search. The right employee referral can increase your chances tenfold of landing the job. And, if you’re looking to make a career change, your professional network can support you by helping you find connections in the industry you are trying to break into or helping you find leads for jobs at specific companies. Take the time to build meaningful relationships with those in your professional circle, so when the time comes to search for work, you can tap into those valuable connections for referrals, insights into job leads, and other valuable information.

  • Angel Searle says:

    The importance of networking cannot be overstated. But how can you improve your networking skills to ensure you’re networking efficiently and effectively? There is no “one size fits all” when it comes to networking. Different people are successful in using different networking tactics. The key is to try out a number of different networking strategies to discover what best suits you. For instance, if you’re an introvert, you may prefer to network one-on-one over coffee or to attend more intimate events with fewer attendees. Once you’ve discovered your ideal networking style, consider where you can go to meet the right people who can help you achieve your current career-development goals.

  • Jennifier says:

    Networking is truly the key to succeeding in your career and bettering yourself as a professional. We can promise you that networking will boost your confidence, widen your professional circle, and further your skills. You may be a professional in your field but that doesn’t mean you know all of the know-how in your industry. Just like everything, industries change and there’s always something new to learn. Networking allows you to interact with those who are in similar careers and filled with knowledge you may not already be aware of. Professional advice and assistance can be found at networking events, along with real-life experiences and explanations to prove that certain tips and tricks have worked for them and may work for your business as well. The more you know about your industry, the better!

  • Quail says:

    It doesn’t matter which part of the world you come from if you share the spirit of entrepreneurship you are most likely to be very welcome to attend different network events. Knowing your business and goals you have various opportunities to attend different events, by choosing from casual groups to highly professional associations. Never forget that successful, strong connections are built when your tools meet your right interlocutor. Pick your approaches according to the type of event you are attending. Choosing a casual behavior can be just fine for local network events, but joining and being part of a specific association is a difficult task and you need to put more effort into it. Online networking for business is a great way to use the power of the internet. While you need to list your attendance to different events far ahead in the upcoming schedules, you have the opportunity to stay connected and build a strong network online. Your business is unique, so be sure that you are able to present your uniqueness online as good as offline.

  • Maria Forb says:

    The best advice often comes from unexpected sources, which is why it’s crucial for entrepreneurs to prioritize building varied professional networks. One of the great things about having access to a diverse group of people from all over the world is that you can then learn from their unique experiences and have access to their specific skills. Being a successful entrepreneur in the knowledge economy partially means learning about a variety of different topics from a global perspective. There is no better way to learn about these experiences than from people who have already lived them. Thankfully, global social networks such as LinkedIn and Facebook make it easy to connect with people who have valuable experiences to contribute to the conversation.

  • Louisa says:

    Networking is one of the most essential career development and job search tools that are often overlooked by students and job hunters. Networking involves developing and maintaining connections with individuals, then mutually benefitting from this developed relationship. In relation to career development, a well-developed network provides you with a support system of individuals who can provide meaningful assistance to you as it may relate to your career/industry exploration, connections to other individuals and learning about potential job openings. Networking should be approached as an ongoing process that takes time and nurturing, and not something you do just when you are looking for a job. It is important to remember that networking is a two-way process in which you provide beneficial support to those in your network as well.

  • Fernandas says:

    Admirable article indeed. The connections we make frequently yield some of the richest experiences of our lives, especially when they are unplanned. Part of entrepreneurship is opening yourself up to new opportunities that can enrich you, your company, your employees and your stakeholders. Extended professional networks are typically great sources of interesting partnerships and collaborations, and the stronger your network is, the more opportunities you will have available to you. Professional networks are also important resources when it comes to hiring. Just as job seekers frequently turn to their networks in search of a new opportunity, entrepreneurs can and should reach out to their connections when they need to add a reliable and skilled member to their growing team. Situations change fast in growing startups, so a network can be especially helpful when you need to find a qualified candidate quickly.

  • Madeleine says:

    Online social networking has become the fastest growing form of networking among professionals. Networking through online resources provides individuals that usually would not have a chance to connect with one another to develop an association on a professional level. Many of these sites serve as a professional networking tool to millions of global users to reconnect with classmates and colleagues, discover new connections through users and obtain answers to industry-related questions through both direct contact and discussion boards. It is important to maintain a professional appearance throughout your profile pages when using these social networking sites for career purposes.

  • Kelly Rue says:

    One of the most important benefits of networking that people tend to overlook is that it allows you to help other people. Granted, our motives in the professional world are rarely altruistic, but helping someone else with their career goals can be truly rewarding. Think of helping someone get their first job for example or putting in a good word to help someone get the promotion they’ve been after for the past two years. What’s more, helping out a professional connection means that they’ll owe you one, which essentially means that by making introductions and helping other people connect, you are basically paving the path for your professional success.

  • Jane Buttler says:

    Human relationships, like entrepreneurship, are surprising. This is an enduring doctrine that can yield unexpected rewards time and time again if you are open to new experiences. You do have to be willing to put yourself out there, however, which does involve an element of risk. And while you don’t often think of entrepreneurs as being reluctant to do so, a fear of personal rejection holds some people back. When you connect yourself to the broader entrepreneurial community you never know what direction the journey will take you in. You may be able to build a relationship with a mentor, spark valuable ideas for your startup or just meet interesting people who have important things to say about entrepreneurship, business, and life in general.

  • Jessamyn says:

    Within the past month, I have personally challenged myself to seek out opportunities to network in my workplace. For me, the best part about networking in the workplace is the connections that I build. The first way I networked this past month was by going to a luncheon hosted by my workplace. At the luncheon, I sat next to people whom I did not know at the time, but now I do! I learned that one co-worker lives less than a mile from me; another co-worker and I have mutual friends; another co-worker was set to retire the following week after 30 years of dedication to our workplace and the list goes on. The second way I networked was by initiating a conversation in the breakroom. Throughout the next month, as the weather starts to get warmer, I plan to network within my workplace by joining different business groups that meet twice a week during the different hour. I work downtown, near a great location to walk, get some fresh air, and meet new people. I am excited about the new business networking opportunity.

  • Michane says:

    Wonderful article Vivek Sood. We are given so many opportunities every day to make a difference, to meet a new friend, or to share your story. Taking advantage of these opportunities in the workplace will give you an upper when it comes to networking and relationship building. I would say, Choose a job you love and you will never work a day in your life. Help create a work environment that YOU love. Reach out, network, and build relationships in the workplace to better your experience. Remember, you spend nearly a quarter of your life with Make the most of it!

  • Bulvin says:

    Often when people think about networking, external networking comes to mind, but internal networking can be extremely beneficial. The stronger your inter-office relationships are, the more success you’ll have with collaboration. This will benefit you in your current role, and can also be a big help when you’re up for a promotion or looking to make a lateral move to a different area of work. Company culture has become increasingly important in the workplace, and part of that is having a strong team of employees who are comfortable collaborating and working between departments and disciplines. When you continually network with other employees within your company, you’re building relationships, establishing rapport, and cultivating mutual trust and respect that will enable higher productivity and better overall work experience.

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