Investing in your social capital
Marjan A. Manzil and Dr. Ivan Misner BNI
We, all entrepreneurs have heard of financial capital, but many may
not have heard of social capital. Social capital is, in fact, very
similar to its monetary sibling. It, too, is accumulated by an
individual or a business and used, or is available for use, in the
production of wealth.
Put more simply, it's the accumulation of resources developed through
personal and professional networks. These resources include ideas,
knowledge, information, opportunities, contacts and of course,
referrals. Just what do you need to keep in mind when thinking about
building your social capital? Social capital is built by design, not
chance.
According to Wayne Baker, author of Achieving success through social
capital, "Studies show that lucky people increase their chances of being
in the right place at the right time by building a 'spider web
structure' of relationships that catch information."
Furthermore, according to Baker, "Success is social; all the
ingredients of success that we customarily think of as individual -
talent, intelligence, education, effort and luck are intertwined with
networks."
Thus, a key way that social capital is acquired is through networking
because successful networking is all about building and maintaining
solid, professional relationships.
The trouble is, we don't live like the Ingalls in Little House on the
Prairie any more, and we don't have the natural community like business
relationships that existed before.
Many business owners hardly know their own neighbours, let alone the
local business people in town.
More than ever, networking is critical to an individual's success in
business. A strong contact network, also known as a business development
network, where one person from every profession is actively seeking
business from and for one another, can help create a virtual Main Street
for business people.
It provides an environment and a system for a 21st century approach
to the traditional model of doing business.
Formal, structured networks like this provide the mechanism for
accomplishing the shared objective of business development within a
particular community.
According to Eric Lesser, author of Knowledge and Social Capital,
"Without a shared understanding of common terms, activities and
outcomes, it becomes very difficult to reap the benefits associated with
building, social capital."
Herein lies the incredible power of structured networking programmes.
They provide the "common terms, activities and outcomes" (or system)
that lead to building substantial social capital for the people who use
the program effectively.
Effectively developing your social capital can be a daunting task.
However, doing so within a structured, organised networking framework
will leverage your efforts and help you begin building your balance of
capital to positively impact your bottom line. Here are some keys to
creating social capital that will help you form the foundation of your
business endeavors:
1. Plan your word-of-mouth. We have learned a great deal about
planning and starting new businesses. Many years ago, it used to
surprise us that 50 per cent of all businesses fail after only three
years in operation. However, now that we know how little planning many
businesses do, we were surprised that only 50 per cent fail.
If you want to be successful in business, it's critical that you plan
your work and work your plan. Furthermore, part of your plan should
involve your strategy for building your business through word-of-mouth.
In my (Ivan) book, The World's Best Known Marketing Secret, I talk at
length about the importance of what I call your "Word-of-Mouth. Business
Acquisition Tactics" plan, or WOMBAT plan.
Completing the WOMBAT plan will help you achieve the results you
deserve for all the hard work you do as a business owner.
2. Give referrals. Every day, week and month, entrepreneurs strive to
build their businesses through referrals. Part of this process is to
build a team of people whom we recommend and refer. This is part of the
process of building your social capital.
If you're not already a member of a strong contact network (like BNI),
find a chapter near you and get started. There's no better way to
systematically develop a solid base for building social capital than in
an organisation dedicated to helping you succeed in this endeavour.
3. Show professionalism at all times. Being dependable, delivering a
product on time, meeting appointments consistently and treating others
with courtesy will give you a professional reputation and cause you to
be remembered by those you wish to have become a contributor to your
social capital.
It's a dog-eat-dog climate in the business world today. Competition
is fierce, and some entrepreneurs employ down-and-dirty tactics. Studies
have shown that one of the most important factors in doing business by
referral is someone's "professionalism." By remaining professional at
all times, you'll rise to the top of the barrel and succeed where others
will fail.
As you invest your time in developing your social capital, know that
you are in fact, increasing your bottom line. Strive to make the most
effective use of this investment by doing everything possible to
thoroughly enhance the relationships you develop in the coming months
and years, because social capital definitely leads to improved financial
capital. |