Networking for business success Networks play a critical role in how entrepreneurs and innovators generate, elaborate, and implement new ideas. But how do they build the networks they need? And how can they best leverage the networks they already have? As Dr Anne ter Wal explains, the answer lies in shifting our attention from studying networks to studying networking. Entrepreneurs and innovators benefit from being part of rich and diverse networks among peers which give them the chance to share ideas, ask for advice and identify opportunities for novel products and technologies. As the Principal Investigator of an ERC-backed research programme at Imperial College in London, titled ‘Networking for Innovation’, Dr ter Wal and his team are investigating the importance of networking in entrepreneurship and innovation. “We think of networking as broadly having two main functions, one of which is around accessing input for new ideas and identifying opportunities. Network relationships affect the diversity of information that you have access to, which then feeds into creative processes,” he says. A second function of networking is related more to building influence. “Once you have identified an idea or a new opportunity, how do you bring that forward inside an organisation or how do you convince investors?” says Dr ter Wal.
Entrepreneurial eco-systems An important objective of Dr ter Wal’s research programme is to identify how
entrepreneurs can best take advantage of network opportunities in their local environment. “It is well established that entrepreneurs and innovators benefit from being part of a community, but it’s not so clear how they achieve that,” he says. A good example of the network challenges that entrepreneurs face relates to entrepreneurial ecosystems. Such ecosystems, for example London TechCity are rich in network opportunities, but it is
ter Wal says many budding entrepreneurs tend to find them quite frustrating. “They have lots of quite shallow conversations and don’t find what they were hoping to find,” he explains. “In one part of our programme, we observed the behaviour of participants at entrepreneurial networking events and interviewed TechCity-based entrepreneurs to try and understand how they seek to embed in the community of entrepreneurs inside the ecosystem and how this helps
It is the interplay between learned strategic networking actions and spontaneous organic ones that ultimately lead entrepreneurs to embed themselves in communities where they can bond with and learn from others. not obvious how entrepreneurs can make the most of them. Many start a company without any previous experience of running their own business, so have almost no connections in the ecosystem community to begin with. There are plentiful networking events in London designed to help entrepreneurs build relationships with people who can help them succeed, yet Dr
them identify new opportunities and bring them forward.” Beneath the surface of events and venues open to anyone, there are more selective groups, but it’s only by behaving in certain ways that entrepreneurs can discover that these selective environments exist and be invited to join. “Our research documents that process. There are both organic and more
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strategic components to how entrepreneurs get embedded in the more selective spaces” says Dr ter Wal. “For example, we’ve found kite-surfing clubs where experienced entrepreneurs meet up to talk about how to run a growing business.” An inexperienced entrepreneur would be unlikely to gain access to such a club simply by attending lots of events, rather they would need to first learn how to behave in such open networking environments, to crack the code of how to unlock new, unanticipated opportunities. While initially entrepreneurs may adopt a very commercial focus at networking events, over time they often learn to behave differently. It is the interplay between learned strategic actions and spontaneous organic ones that ultimately leads entrepreneurs to embed themselves in communities where they can bond with others and learn from them.
Mobilizing networks inside organizations Similar challenges arise inside larger corporations. Ideas do not move forward inside organizations on merit alone. For example, an innovator may know that they will benefit from having a senior sponsor for their project inside an organisation, but the question is how and when they can best enlist that support. “The day-to-day decisions about how people use their networks are really at the core of my research,” stresses Dr ter Wal. “Two people may have exactly the same networks and know the exact same people, but they may make quite different choices as to when they elicit support from their contacts.” “We found that individuals who gradually involve their network contacts from the inside-out – their closest contacts first, their outer circles later – are more successful in pushing their ideas forward in the organization than individuals who are more oblivious to understanding who can best help at what stage of an idea’s development and expose their ideas too broadly, too soon,” outlines Dr ter Wal. In large organizations, it is also not obvious how people working together on novel ideas can best divide their networking activities. “In most organizations there is a distinct division of labour. When it comes to innovation, the person in the technology development role represents what’s possible, while the manager represents what’s needed – they have more of a business background. It is not obvious how people in these different roles should work together,” says Dr ter Wal. In order to achieve market success, a product has to ultimately meet both a commercial need and be technologically sophisticated. “We found
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that managers and technologists pursuing joint ideas need to mirror one another’s networks in a networking practice we call dual networking. Dual networking is not a matter of having overlapping networks but making sure to have similar but separate advice networks that allow co-workers to challenge one another,” says Dr ter Wal. “Only then will people working together succeed in merging what’s technically possible with what’s needed.”
Networking for innovation Whether they like networking or not, entrepreneurs and innovators know very well that networks matter a great deal, and that ideas they pursue become all the better for it. “We’ve found that the relationships entrepreneurs really crave are support networks with their peers,” outlines Dr ter Wal. This was particularly evident during the Covid-19 pandemic. “Many entrepreneurs kept social activities going online during lockdown, and they also returned in-person very rapidly,” says Dr ter Wal. “We have an entrepreneurial campus called ScaleSpace at Imperial, jointly run with venture builder Blenheim Chalcot, where we try to help businesses grow. That campus was brimming with life long before the university campus.” This is a sign of the value that entrepreneurs and innovators place on being part of a network, and of a recognition of their importance to the commercial prospects of their business or the success of their ideas. While not everybody actively enjoys networking and it is not obvious how to best approach it, people can learn to network more effectively, believes Dr ter Wal. “Not all of us are social butterflies, but it doesn’t mean we can’t become effective networkers. There are techniques we can use that are effective for us, for the type of person we are and the type of work we do,” he says. In his teaching Dr ter Wal aims to help people identify what networking practices and habits they can sustain in the long-term that will help them build and employ the right kind of network. “It’s about finding habitual behaviours that fit with your preferences and that you can sustain in the long term, not like joining a gym in the New Year and then not using it for 11 months,” he continues. “Learning to build and leverage your network more effectively, yet in ways that suit you, will make a meaningful difference in the odds of success in promoting your ideas. It is by trying to unravel effective networking for innovation that my research programme hopes to strengthen our understanding of what it takes for entrepreneurs and innovators and the organizations and places where they work to succeed and flourish.”
N4I_CLUSTERS Networking for innovation: how entrepreneurs’ network behaviours help clusters to innovate Project Objectives
The ERC-funded “Networking for Innovation” research programme seeks to better understand how innovators and entrepreneurs build and mobilize their social capital to achieve innovative outcomes. A better understanding of networking behaviour is important, as it will help reveal the fundamental individual-level mechanisms through which networking facilitates innovation. Better understanding how innovators and entrepreneurs capitalise on local network opportunities may also help explain why some places are more vibrant and innovative than others.
Project Funding
This project has received funding from the European Union’s Horizon 2020 research and innovation programme, Starting Grant.
Contact Details
Project Coordinator, Dr Anne ter Wal Imperial College Business School Imperial College London, South Kensington Campus, London, SW7 2AZ, United Kingdom T: +44 20 7594 1460 E: a.terwal@imperial.ac.uk W: https://www.imperial.ac.uk/business-school/ faculty-research/academic-areas/managemententrepreneurship/research/networking-innovation/ Ter Wal, A.L.J., P. Criscuolo & A. Salter (2022), Inside-out, outside-in, or all-in-one? The role of network sequencing in the elaboration of ideas. Academy of Management Journal, in-press. Ter Wal, A.L.J., P. Criscuolo, B. McEvily & A. Salter (2020), Dual networking: how collaborators network in their quest for innovation. Administrative Science Quarterly, 65 (4): 887-930.
Dr Anne ter Wal
Dr Anne Ter Wal is an associate professor of technology and innovation management at Imperial College Business School in London. Anne received his Ph.D. in economic geography from Utrecht University in the Netherlands. His current research focuses on the role of social networks and networking practices in innovation and entrepreneurship.
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