What do you think is the one of the most important assets when it comes to your career or your venture? It’s your network.
Actually, your network and the people (not organizations) in it are instrumental in you getting ahead, improving your chances of success. It is a fantastic source and creator of value.
But, the way people “network” needs to be studied under a microscope because many get it wrong. Others have no idea what building a network entails and whether it’s worth it or not.
The general premise of this post can be summed up by Margaret Attwood.
In this post I’m going to focus on the three key sources of value you should seek AND provide when building your network.
These three sources are the ingredients from which value exchange takes place. In fact, I use the term Value Exchange Network (VEN) as a means to connect network development with the idea of exchanging value.
Value Exchange Defined
In any relationship with an individual there is an exchange of value… or lack of it.
Whether it be a friendship, marriage or a business relationship both individuals need to give something and get something.
When the value exchange is one sided, one person gains and the other loses.
These are unhealthy and inequitable relationships and whether they be personal or professional they suck!
You instinctively know whether a relationship is equitable by virtue of how that relationship with that person feels and the degree to which you support and help each other. There are a series of exchanges you have through conversations, actions and deeds.
The ideal relationship is one where you both are interested in each other's well being and success. And, that the value you offer each other helps move you both forward.
Value Exchange Types
There are three forms of value you can offer and receive. Yup, three. They have economic, social and cultural value. Each of these types provides some form of capital or compensation.
Economic capital
This relates to the command of economic resources (money, assets, property).
It may be the abundance of valuable material possessions or resources; all property that has a monetary value or an exchangeable value; all material objects that have economic utility; the stock of useful goods having economic value in existence at any one time.
There are three kinds of economic capital: Income, Equity and Assets.
Income comes in the form of revenue for the business and income, dividends and bonuses for those involved in the venture (external and internal)
Equity is a form of ownership that is delivered through shares and stock options
Assets can be tangible or intangible that increase in value (homes, buildings, other businesses) and resources (intellectual property, brand value) that increase the valuation of a venture.
The outcome of economic capital is wealth.
Social Capital
This consists of the value that you and your network of connections and relationships offers or can exchange. More formally, it’s a group or system of interconnected people and ventures.
It’s where you connect as or operate within your network and other ones; interact with people to exchange information and develop professional or social contacts.
There are three kinds of social capital: Resources, Relationships and Societal Impact.
Resources are the assets required or desired in order to create, deliver and capture value.
Relationships lead to introductions, referrals and access to subject matter expertise.
Societal Impact creates a significant, positive change that addresses a pressing social challenge.
The outcome of social capital is a network.
Cultural Capital
A venture (or person’s) knowledge and intellectual skills that provides advantage in achieving a higher social-status and influence in society and/or within an industry.
It is the combination of observable and measurable knowledge, skills, abilities and personal attributes that contribute to enhanced professional performance and ultimately result in a ventures success.
There are three building blocks to creating cultural capital: Knowledge, Experience and Expertise.
Knowledge emphasizes theory and the obtainment of information and ideas
Experience, on the other hand, stresses practice, or the application of knowledge over a prolonged period of time, in order to reinforce understanding of subject matter or a certain task. Experience means you've done something a lot.
Expertise means you've done it a lot and you do it well. We achieve expertise by doing something a lot, paying attention, and caring.
The outcome of cultural capital is capabilities, a key building block in building trust.
MAY BE OF INTEREST: What is Trust in Business? | Using a Framework for a Business Plan
Summary
This blog post has been written to help me and my venture, Mi6, educate and inform you on implementing a network with value exchange as a key driver.
We look at value exchange through two key lenses: your business model and your network of relationships.
Whether you’re a business professional, tradesperson, entrepreneur or a CEO of a multinational you can use it for yourself and your organization. I hope this post has helped you think about your business network in a new or better way.
This blog post has been written using the Mi6 Marketing Integration Framework as my guide.
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About the Author
Chris Herbert spearheads Mi6 Agency, emphasizing small business growth and entrepreneurship. On the agency's blog, he offers practical marketing insights and solutions to unique challenges faced by businesses. Herbert advocates for sustainable and responsible growth. His "Rural Entrepreneur Podcast" extends this mission, providing essential advice and experiences for entrepreneurs. He adopts a comprehensive approach, focusing on building sustainable businesses, community engagement, and active participation in entrepreneurial ventures.
