Networks have oiled the wheels of commerce for centuries. From membership of ancient guilds through to the stereotypical old boys networks based on the school tie - close interlinked relationships have helped businesses adapt, grow and expand by exchanging contacts and information.
Like many business trends, the internet has changed the face of business over the last decade. Networking is now virtual whether it is the MD on LinkedIn or the employee on Facebook.
One particular network - the global financial one - lies at the heart of the current crisis as deregulation of markets combined with technology means that information and emotion - a driver of business confidence - travels round the globe fast.
But a major new report published today into the impact of networks on business by think tank Demos in collaboration with Orange, argues that new forms of social networking can help firms survive the recession and even the much maligned social networking can be argued to have its place in opening up business opportunities.
The report argues that ‘social’ and ‘professional’ networking should be seen as essentially the same thing and company bosses should no more ban staff from using Myspace or Facebook than they would ban them going to meetings. Is a meeting with a contact over an extended lunch any more valid than having a conversation via a social network site?
The report concludes that if bosses can go against instinct and trust staff to network with whom they want, when they want and how they want it could have a major impact on a firm’s bottom line. It follows too that employees in more democratic situations will be happier and less likely to leave the fold-on average it costs a company £8200 to replace a single employee.
While companies facing recession would normally contract their organisations and restrict ‘frivolous’ activities the report’s authors argue that those firms that take the opposite tack and loosen up their organisations and encourage greater networking throughout the business are those most likely to survive.