LinkedIn Cofounder on: Get Your Job Done

I saw a very insightful post from Konstantin Guericke, CoFounder of LinkedIn on MyLinkedInPowerForum. He writes (reposted by permission):

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Message: 1
Date: Mon, 29 Aug 2005 22:09:35 -0700
From: “Konstantin”
Subject: The power is in the network you already have

Virtually all professionals nod enthusiastically that “relationships matter,” but only a small group heeds the advice below. They start networking when they have a need. But that’s a really bad time to do it.

One of the core networking principles has been that you need to network proactively, meaning meeting lots of new people and build relationships, so you have people you can fall back on you need a job, an expert, an investor or a business partner. And you have to network with lots of people because you just don’t know what kind of relationship you may need.

And many networking sites try to encourage this old way by being a sort of virtual networking event where you can get to know lots of people.

LinkedIn turns this on its head by focusing on relationship management and giving members access to the people you need through the people you know.
The people in your personal networks are contacts on demand. As long as you have strong relationships with, say, 100 people, you have on-demand access to hundreds of thousands of people-far more than you could ever meet through networking.

So, what this means is that LinkedIn obviates the need to network in the traditional sense. Unless you are a young professional just getting started on your career, you already have a network just from working-this is a network based on co-workers, bosses, clients, business partners, investors, etc. And this network is strong because these people know the good work you have done and are capable of doing.

In the past, this network was often insufficient because it was just 30 or 100 or 300 people, depending on the type of profession and length of your career. The person you needed would often not be among this group. But through LinkedIn, you have access to an on-demand network, so once you have brought the group of people who know you and your work onto LinkedIn (and these days, many are already on, so it’s much easier than two years ago), you can just relax and know that you can reach the people you need when you need them-without having to get to know them all “just in case.”

This is a fairly radical notion that transcends most existing networking philosophy. And it allows you to focus on working, rather than networking.

Once the network of people who know your work is built, when you need someone, search and you will find. Ask for an introduction, and you will get in touch along as your connection provides a strong introduction and you have a win-win proposition.

As you help your connections reach the people they want to meet, you strengthen your bonds with both parties you are introducing. The best way to expand your list of connections is simply to continue to do work and do it well. Your connections list will grow, and each connection will be an avenue to thousands of new contacts that are accessible on-demand, when you need them.

-Konstantin

Konstantin Guericke
VP Marketing and Co-Founder, LinkedIn
Professional Profile

This is very consistent with some of the themes in our book. I think that spending endless hours chatting at cocktail parties or chatting in online communities is a waste of time from a professional point of view. It’s defensible as recreation but not for business development. Whatever your job is, do your job well, and success will flow from that. What counts is not the number of people who know you, but the number of people who know you, trust you, and will pay you to do what you do.

Selective vs. promiscuous linking

One of the great dilemmas of online networks is what does a ‘link’ mean? Orkut offers several levels of ‘friendship’, whereas Friendster and LinkedIn just offer the binary option: yes i am your friend, no I am not. In several conversations with the LinkedIn team, I have heard them say very strongly that they want to promote a culture in which linking is meaningful–it indicates that you would actually pass on a request from the person to whom you link. Which, after all, is the whole point of LinkedIn and similar systems.

I agree 100% with this. When I get link requests from people I barely know, my standard response is:

I’m sorry, but I have a policy of not linking to anyone on LinkedIn with whom I haven’t developed some sort of significant business/personal relationship. This is nothing personal against you; this is a general policy I have to prevent me from getting deluged with requests and to keep consistent with the LinkedIn philosophy. I’m happy to get to know you in other contexts. I hope everything is well with you!

However, cultural realities — the desire to appear more popular and connected—may make it hard for LinkedIn to hold by this idealistic position. On their home page is this ad:

Get Exposure with CV Advantage
Is your resume lost in a sea of 1-2 page resumes?

Which leads to http://cv-advantage.com/CVA_LinkedIn/
, which says on it:

Don’t forget to send us LinkedIn invitations if we’re not already connected!

This is an invitation to the most promiscuous possible linking. If LinkedIn wants to make their system functional, and not have it drown in a sea of spam and unwanted requests, I suggest they make a stronger effort to discourage this sort of approach.

Which leads to a broader question: how can LinkedIn and similar systems create a culture and design a system to prevent such activities? by imposing a maximum number of connections? by grading people on % of requests which they accept? other?

Five Rules for Balancing Business and Friendship

From RLI Corp. Vice President, Executive Products Group, A. Q. “Skip” Orza:

1. Never renege on your handshake. Multimillion-dollar, complex deals are sealed by handshakes or verbal agreements on the phone, and you live by them. If you don’t honor them on paper afterward, you’ll lose longstanding friendships that are productive business-wise and socially.

2. No ethical shortcuts. Be open and honest in everything you do, go the distance to make sure all that you do is on the up and up. By the same token, make sure you associate with colleagues/friends with the same ethical and moral compass.

3. Defend the inner circle. Watch the people around you; see if they try to cut corners or find an easy way out of things — cheating on taxes, taking financial shortcuts. If you notice that they do these things in their personal lives or in social situations, they’re almost certain to do it in their business dealings.

4. Stick to win-win situations. Make sure every deal you make is mutually beneficial — to you and your company, and to your colleague and your colleague’s company. In short, make sure each deal makes good business sense for all involved.

5. Don’t ask, don’t sell. Never ask colleagues to compromise business standards for you just because you’re down and need the business. And they should never ask the same of you.

Trust and Transactions, Numbers and Strength

Ross Mayfield writes:

At dinner tonight I had an interesting conversation about the difference between Americans and Europeans. One theory put forth is that Americans focus on transaction volume and efficiency while Europeans focus on the strength of relationships. With enough transactions you gain economies. With trust underpinning transactions, you gain similar economies. Its hard to say which system is “better.”

This reminds me of what we wrote in Balancing strength of relationships and number of relationships:

You can spend all of your time with your close friends and family (Strong ties with those people, but a low Number of relationships), or spread yourself thin across a wide number of people (high Number, low Strength). However, maintaining both high Strength and high Number is physically impossible.

How do you optimize the value of your network? How can you find the proper balance between Strength and Number?

The way to optimize the value of your network is to determine the necessary level of Strength required to accomplish your goals, and then maximize Number at that level. For example, if you are selling investment banking or strategic consulting services, you need a high Strength level for someone to buy your services. These are big-ticket items which require a high level of trust in their provider. Your Number will likely be small. Ideally, you have a small Number of close relationships with senior executives who are in a position to buy these services.

You may be tempted to try to meet everyone in your golf club. In most cases, it is unproductive and even impossible to build relationships with everyone there. Instead, develop a substantial relationship with the top 30 most Relevant to you.

However: if you are trying to sell books or food, your Strength can be much lower but your Number has to be much higher. Movie stars mainly make money by selling people the chance to watch a movie for $5 – $10 per view. They try to have ties with as many fans as possible. Spending an hour with just one fan is unnecessary and inefficient for them; they want weak ties. Similarly, a restaurant owner should build a large number of weak ties and encourage those weak ties to try her restaurant. Once the weak ties try the restaurant, the quality of the restaurant itself will probably drive any repeat business.

There is no one right solution overall; your needs will likely be different from one context to another. For example, the movie star will want to develop Strong ties with producers and directors. Also, you may be able to leverage the weak connections of your Strong ties. The restaurant owner should build closer relationships with high-profile customers, party planners, and group or association leaders. They could bring in significant groups of people, as well as referring people from within their own large networks.

This tension is why it is so important to develop strategies that allow you to increase either Strength or Number without more demands on your time. Building a large mailing list allows you to increase the Number without spending significant additional time. Learning to write more effective emails will help you increase the Strength of your ties without spending too much time on those relationships, beyond the initial cost of learning the new skill.

The ideal network has a large Number of heterogeneous people who think highly of you and with whom you are well bonded. That is the power of university and corporate alumni communities. Using the online member databases, you can easily access people in any industry and region of the world. Once you approach a fellow member, who may be from a totally different background than you, you have an immediate bond by virtue of the common background. In addition, this principle explains the value of “Outward Bound” expeditions, Ropes Courses, and other similar programs. These retreats all promote quick bonding between participants (immediate Strength).

Strategically managing your network, vs. damaging your network

“If people like you they’ll listen to you, but if they trust you they’ll do business with you.”– Zig Ziglar

We are providing a tool kit on this site to manage your network strategically. However, we acknowledge there is a clear tension between managing your network strategically, and managing your network successfully.

Let us say you meet someone at a conference:

You: “Hi! I’m Fran Greensmith with SFA Software. How are you?”
Wai: “I’m fine. I’m Wai Ching, with ENC Corp.”
You: “I sell sales force analysis software. I noticed that you’re a salesperson. Are you in a position at ENC to make buying decisions about software?”
Wai: “Go away.”

When you make it crystal clear that you are only interested in someone because they can help you, you damage the relationship. You first have to take some basic steps to build a relationship with that person.

This is why the best relationship building does not take place at “networking” functions; it happens at meetings, conferences, online communities, and other venues where the people are united by a common goal other than meeting one another. A common problem with self-described “networking functions” is that most attendees are explicitly focused on meeting new people to achieve immediate professional goals: a sales lead, a new job, an executive to hire, and so on. When people are primarily focused on, “What’s in it for me?”, and “How can you help me?”, they are usually so self-centered that it is difficult to build a strong relationship with them. They are so busy listening to radio station WII-FM (“What’s In It For Me?”) that they cannot hear you.

By contrast, an event or online venue that brings together people with an altruistic goal and a common interest other than themselves may be more effective. Conversations tend to focus initially on the common charitable endeavor, rather than “What do you do for a living?” Once you make the bond—you both care about raising money for orphans in Africa—the conversation will naturally evolve towards other topics that are of business interest.

How can you resolve this tension between strategically managing your network, and not being perceived as exploitive? We think that the resolution is first, having the right goals, and second, sincerity.

For example, you are a car salesman, and you meet Nina, a new college graduate who just moved to town. You will be a much more effective salesperson if you sincerely like and want to help Nina. We suggest: offer to help Nina find a good deal on an apartment, mention in passing that you are a car salesman, and say that you would be happy to give her a loaner for 2 days while she looks for an apartment.

If you are insincere, Nina will sense it. But if you are sincerely looking out for her best interests, you can be explicit about your (legitimate) business goals, and you have a shot at selling her a car.

The best way to avoid the smell of insincerity: build your genuine desire to help people. Aristotle wrote, “We are what we repeatedly do. Excellence, then, is not an act, but a habit.” If you lack the character trait of lovingkindness, the sincere desire to be of service to others, then the best way to overcome it is simply to do it. Be kinder to people, and you will be a kinder person.

As Stephen Covey observed in Seven Habits of Highly Successful People, much of modern success literature is focused on the superficial, e.g., how to appear friendly. You will do better to focus on building your character.

What do you think? How can you manage the tension between strategically and pro-actively managing your network, while at the same time not making people feel “used”? We would very much like to hear your feedback.

Advantages of using social software for building your network

As regular readers know, we use a five-part framework for analyzing individual social networks.

Using that framework, we suggest five ways social software can increase dramatically the power of your network. (For exact definitions of the terms below, see the first chapter of the Five Keys to Building Business Relationships Online–free download.)

• Improving your Credibility: You can improve your character, and make the quality of your character more visible, by leveraging social software. You have the chance to help more people and more people have the chance to learn what sort of person you are. You can become more competent because you have access to the collective knowledge of far more people than ever before possible.

• You can meet the right, Relevant people who can support you in achieving your goals, and vice-versa…regardless of where in the world they are located.

• You can Strengthen all your ties by communicating more frequently and being of greater value to people. We all know people whom we rarely, if ever, see in person, but with whom we feel strongly connected because of email.

• You can increase the Number of relationships you have, by increasing your visibility and interaction with people around the world. Similarly, you become a latent tie for every other internet user. You have probably heard of “passive income”, i.e., streams of income that produce money with minimal additional effort on your part. The internet enables “passive relationship building”. People around the world can find your internet presence and contact you, even while you are asleep.

• Lastly, you can build a radically more Diverse network.

How much time should I spend building my network?

How much time should I spend building my network?

By its nature, the internet offers endless opportunities to meet new people. At least a cocktail party must come to an end, but on the net there is always another person with whom you can connect.

People who can leverage their networks well are called “successful”. People who just know a lot of people are called “socialites.”
So when does the party end? When should you stop meeting people?

We recommend only focusing on building your network to the extent that your marginal benefit equals your marginal cost. Otherwise, you will be so busy maintaining your relationships that you will have no time to leverage those relationships.

For example, let us say that you are an entrepreneur seeking to build a new consulting company. Through targeted network building, you have accumulated a list of 50 potential clients. Should you go to three more venues to find 10 more leads, or should you start working down that list?

We recommend start trying to sell to the 50 people. If you can convert one of them into a happy client, he or she will refer you to more customers. Happy clients are the best network aids that you can possibly find. Networking is a means to an end, not an end.

There is no simple way to determine the right amount of time to spend on building your network is. Maintaining your existing relationships is always important, and should be a baseline mandatory part of your daily schedule. In allocating your time, a good test is to follow this three-step process:

• Review everyone in your contact database to create a sublist of potential clients (or employers, or whatever sort of individual you are pursuing).

• Approach all of the potential clients over the next few weeks.

• Meet new people only after you have pursued most of the existing leads.

Servicing existing clients and pursuing existing leads should be a much higher priority than looking for more new leads. Let us say that you have a 50% close rate: you sell your consulting services successfully to 50% of your leads. In a new chat room, there is perhaps a 25% chance that you will meet someone with that 50% chance of revenues. The bird in the hand is worth far more than the bird flitting through cyberspace.

If you find that leads are languishing for a month without you even calling on them, or if you are taking more than a week to respond to important emails, then you are probably spending too much time meeting new people.

Video: Thomas Power's Top 10 Tips for Networking

Ecademy founder and Chairman Thomas Power shares his Top 10 Tips for Networking (Windows Media streaming video) in this 27-minute video clip.

Thomas is a dynamic speaker, and this is definitely worth your time to watch. Thomas and I have a little different philosophy on one point, which is that Thomas definitely practices and preaches a “bigger is better” notion of networking. In private conversation, he qualifies that, but in this video, I must admit that he makes as compelling a case for it as I’ve heard.

In summary, his top 10 tips discussed in the video are:

1. Collect people
2. Respect geography
3. Start a club
4. Relax and be yourself
5. Go for volume over “quality”
6. Listen for link words
7. Make a match – live
8. Disturb your comfort zone
9. Read new material
10. Manage your reputation

Sources of power in a network

Traditionally, power in a company came from one’s title, or formal authority. But in today’s networked organization, power can come from many other sources.
Harvard Business School Professor Linda Hill breaks down the sources of business power as follows (Linda Hill, Power Dynamics in Organizations (Cambridge, MA: Harvard Business School Publishing, 1994), 6-10.). First, you derive power from your position in the social network:

• Formal authority. Your formal position in the hierarchy and job description impact your power.
• Relevance to the organization’s mission. People in functions that are closely aligned with the organization’s overall priorities are more powerful than those who are not. In a software company, the CTO has far more power than in a car company.
• Centrality. When you analyze the social network of a company, you often find that a mid-tier or even low-tier person may be very central. For example, Jake in engineering has a friend in sales. Jake may therefore be the only person who understands what sales thinks of the new products that engineering is developing. If Jake leaves the company, engineering will lose touch with the market.
• Autonomy. A CFO whose every move is double-checked by the CEO does not have much power. However, the senior bioinformatics engineer has a lot of autonomy if she is the only person in the company who understands bioinformatics. No one can double-check her decisions, because they will not understand what she is doing.
• Visibility. It is not enough to do a good job; the organization must know that you are doing a good job. This is one of the risks of expatriate assignments, which remove you from headquarters and senior management.

Second, you derive power from your personal attributes, your character and your competence:

• Expertise. The more unusual and needed your expertise is, the more power you will have.
• Track record. Your past performance is usually considered a strong indicator of your potential future contribution. That said, all the brand names on your resume do not matter if you cannot prove that you can contribute to your organization.
• Attractiveness. For better or worse, attractive behavior (good table manners) and attractive appearance (height, health, physical fitness, good looks) both give you more power. This rule is one of the most consistent findings in research about what drives professional and personal success.
• Effort. People must see that you work hard to achieve your goals.

More thoughts on structural holes and closed networks

More thoughts on structural holes and closed networks:

In some cases, you can benefit by being in a highly interconnected network, one in which there are virtually no structural holes . This is a “closed network”, “in which everyone is connected such that no one can escape the notice of the others”.

A naturally occurring example of a closed network is a family. Anyone in a large family benefits from being in a high-strength and highly interconnected network. The Kennedy, Bush, and Gore political dynasties are excellent examples in the USA. Any aspiring politician from those families has a huge head start over someone from a less prominent family.

Another powerful example is a business school “section”. At many leading business schools, students are grouped into a section of perhaps 80 students and take many classes together. As a result, they spend a great deal of time together and get to know one another well. This is a very powerful club to join. Precisely because the section is so interconnected, the members trust and support one another.

There are two benefits of membership in a closed network:

+ Improves access to information. Remember the children’s game of “Telephone”? Information deteriorates in quality the more steps it has to pass through. In a closed network, you have multiple ways to get access to the same information, so it is more likely that you will get accurate information. The members of a small fraternity all know a lot of accurate information about one another’s activities.

+ Closed networks make it easier to reward and punish people, which in turn makes it less risky to trust other members. The common group membership provide a check. You are not too likely to rip off another member of your business school section in a business deal, because that abuse will hurt your relationships with the others. The group as a whole can also reward and punish outsiders.

For example, let us say that Ikenna runs a three-person consulting firm, and Neena runs a food delivery business. If Neena provides bad service to Ikenna, she will get no further business from Ikenna, and she will also get no further business from any of Ikenna’s colleagues. Similarly, if she provides excellent service, it is likely that Ikenna will influence his colleagues, or perhaps even hire Neena to cater an event for the firm.

The larger Ikenna’s company, the more motivation Neena has to treat Ikenna well. However, a large organization cannot be a closed network, and so it is more difficult to create consequences for outsiders. If Ikenna works for a huge company like GE, then Neena can provide bad food to him, without hurting her sales of food to another GE office. And good service to GE’s CEO will likely have little influence on catering purchases throughout GE.

Closed networks also exist within open networks; people call them cliques. If Ikenna works in a small department with five other people, that is a closed network. If Neena sells bad food to this department, the consequences for her will be the same as if she sold bad food to a small consulting firm.

The implication for you: it is often advisable to join a formal, small group in which you can get to know everyone. If you are not lucky enough to be born into a large and high-powered family, and not fortunate enough to marry into one, creating such a high-strength network requires a significant amount of time. However, we believe it is well worth the investment.