How Leaders Create and Use Networks
When Henrik Balmer became the production manager and a board member of a newly bought-out cosmetics firm, improving his network was the last thing on his mind. The main problem he faced was time: Where would he find the hours to guide his team through a major upgrade of the production process and then think about strategic issues like expanding the business? The only way he could carve out time and still get home to his family at a decent hour was to lock himself—literally—in his office. Meanwhile, there were day-to-day issues to resolve, like a recurring conflict with his sales director over custom orders that compromised production efficiency. Networking, which Henrik defined as the unpleasant task of trading favors with strangers, was a luxury he could not afford. But when a new acquisition was presented at a board meeting without his input, he abruptly realized he was out of the loop—not just inside the company, but outside, too—at a moment when his future in the company was at stake.
Henrik’s case is not unusual. Over the past two years, we have been following a cohort of 30 managers making their way through what we call the leadership transition, an inflection point in their careers that challenges them to rethink both themselves and their roles. In the process, we’ve found that networking—creating a fabric of personal contacts who will provide support, feedback, insight, resources, and information—is simultaneously one of the most self-evident and one of the most dreaded developmental challenges that aspiring leaders must address.
Their discomfort is understandable. Typically, managers rise through the ranks by dint of a strong command of the technical elements of their jobs and a nose-to-the-grindstone focus on accomplishing their teams’ objectives. When challenged to move beyond their functional specialties and address strategic issues facing the overall business, many managers do not immediately grasp that this will involve relational—not analytical—tasks. Nor do they easily understand that exchanges and interactions with a diverse array of current and potential stakeholders are not distractions from their “real work” but are actually at the heart of their new leadership roles.
Like Henrik (whose identity we’ve disguised, along with all the other managers we describe here), a majority of the managers we work with say that they find networking insincere or manipulative—at best, an elegant way of using people. Not surprisingly, for every manager who instinctively constructs and maintains a useful network, we see several who struggle to overcome this innate resistance. Yet the alternative to networking is to fail—either in reaching for a leadership position or in succeeding at it.
Watching our emerging leaders approach this daunting task, we discovered that three distinct but interdependent forms of networking—operational, personal, and strategic—played a vital role in their transitions. The first helped them manage current internal responsibilities, the second boosted their personal development, and the third opened their eyes to new business directions and the stakeholders they would need to enlist. While our managers differed in how well they pursued operational and personal networking, we discovered that almost all of them underutilized strategic networking. In this article, we describe key features of each networking form (summarized in the exhibit “The Three Forms of Networking”) and, using our managers’ experiences, explain how a three-pronged networking strategy can become part and parcel of a new leader’s development plan.
The Three Forms of Networking Managers who think they are adept at networking are often operating only at an operational or personal level. Effective leaders learn to employ networks for strategic purposes.
Although operational networking was the form that came most naturally to the managers we studied, nearly every one had important blind spots regarding people and groups they depended on to make things happen. In one case, Alistair, an accounting manager who worked in an entrepreneurial firm with several hundred employees, was suddenly promoted by the company’s founder to financial director and given a seat on the board. He was both the youngest and the least-experienced board member, and his instinctive response to these new responsibilities was to reestablish his functional credentials. Acting on a hint from the founder that the company might go public, Alistair undertook a reorganization of the accounting department that would enable the books to withstand close scrutiny. Alistair succeeded brilliantly in upgrading his team’s capabilities, but he missed the fact that only a minority of the seven-person board shared the founder’s ambition. A year into Alistair’s tenure, discussion about whether to take the company public polarized the board, and he discovered that all that time cleaning up the books might have been better spent sounding out his codirectors.
One of the problems with an exclusive reliance on operational networks is that they are usually geared toward meeting objectives as assigned, not toward asking the strategic question, “What should we be doing?” By the same token, managers do not exercise as much personal choice in assembling operational relationships as they do in weaving personal and strategic networks, because to a large extent the right relationships are prescribed by the job and organizational structure. Thus, most operational networking occurs within an organization, and ties are determined in large part by routine, short-term demands. Relationships formed with outsiders, such as board members, customers, and regulators, are directly task-related and tend to be bounded and constrained by demands determined at a higher level. Of course, an individual manager can choose to deepen and develop the ties to different extents, and all managers exercise discretion over who gets priority attention. It’s the quality of relationships—the rapport and mutual trust—that gives an operational network its power. Nonetheless, the substantial constraints on network membership mean these connections are unlikely to deliver value to managers beyond assistance with the task at hand.
Operational Networking
All managers need to build good working relationships with the people who can help them do their jobs. The number and breadth of people involved can be impressive—such operational networks include not only direct reports and superiors but also peers within an operational unit, other internal players with the power to block or support a project, and key outsiders such as suppliers, distributors, and customers. The purpose of this type of networking is to ensure coordination and cooperation among people who have to know and trust one another in order to accomplish their immediate tasks. That isn’t always easy, but it is relatively straightforward, because the task provides focus and a clear criterion for membership in the network: Either you’re necessary to the job and helping to get it done, or you’re not.Although operational networking was the form that came most naturally to the managers we studied, nearly every one had important blind spots regarding people and groups they depended on to make things happen. In one case, Alistair, an accounting manager who worked in an entrepreneurial firm with several hundred employees, was suddenly promoted by the company’s founder to financial director and given a seat on the board. He was both the youngest and the least-experienced board member, and his instinctive response to these new responsibilities was to reestablish his functional credentials. Acting on a hint from the founder that the company might go public, Alistair undertook a reorganization of the accounting department that would enable the books to withstand close scrutiny. Alistair succeeded brilliantly in upgrading his team’s capabilities, but he missed the fact that only a minority of the seven-person board shared the founder’s ambition. A year into Alistair’s tenure, discussion about whether to take the company public polarized the board, and he discovered that all that time cleaning up the books might have been better spent sounding out his codirectors.
One of the problems with an exclusive reliance on operational networks is that they are usually geared toward meeting objectives as assigned, not toward asking the strategic question, “What should we be doing?” By the same token, managers do not exercise as much personal choice in assembling operational relationships as they do in weaving personal and strategic networks, because to a large extent the right relationships are prescribed by the job and organizational structure. Thus, most operational networking occurs within an organization, and ties are determined in large part by routine, short-term demands. Relationships formed with outsiders, such as board members, customers, and regulators, are directly task-related and tend to be bounded and constrained by demands determined at a higher level. Of course, an individual manager can choose to deepen and develop the ties to different extents, and all managers exercise discretion over who gets priority attention. It’s the quality of relationships—the rapport and mutual trust—that gives an operational network its power. Nonetheless, the substantial constraints on network membership mean these connections are unlikely to deliver value to managers beyond assistance with the task at hand.
