Ivan Misner Interview on Creating Social Capital

I’m pleased to be interviewing Dr. Ivan Misner. Ivan is both a colleague and a friend. He’s often referred to as the “father of modern networking.”

IM: Stephen, I’m just glad they’re not calling me the grandfather of modern networking yet!

SJ: Yes, that’s a good thing! Ivan, you’re one of the world’s leading experts on business networking and referral marketing. You founded BNI (Business Networking International) in 1985. BNI now has more than 6,000 chapters on every continent. Last year alone, BNI generated 6.5 million referrals, resulting in $2.8 billion worth of business for its members. It’s great to be talking with you, Ivan.

IM: Thank you. Just so you know: $2.8 billion is the gross domestic product of the country of Liechtenstein.

SJ: Aha!

IM: Okay, so it’s a small country, I admit, but when you think about a networking organization generating as much business as a country the size of Liechtenstein, that’s impressive. Although I’m looking for a bigger country next year, I think this is a good start.

SJ: It certainly speaks to the power of networking. Let’s turn to Chapter 12 of Dragons at Work where we find Peter, a direct report of our hero, Dan, suffering under Dan’s leadership. The first question I have for you is this: How would having a larger network make Peter a better employee?

IM: Building a powerful personal network is important, whether you’re running your own business or working for a large company, and it’s important for a number of reasons. When you’re connecting with other people, and helping and referring other people to projects or opportunities, you’re building your social capital. Building social capital involves making investments in relationships that you will keep over time. That makes it easy to take a withdrawal down the road. When you build enough social capital with people then when you ask for some assistance, they’re more than willing to provide it.

I’ll give you a good example: A friend of both of ours, Alex Mandossian, said to me, “Ivan, I have a favor to ask you.” I answered, “Yes, I’ll do it.” He responded, “Well, I haven’t told you what the favor is, yet.” I said, “Alex, we’ve built up enough social capital in our relationship that I can’t imagine you’re going to ask anything that I wouldn’t feel comfortable doing. And so the answer is yes, I’ll do it.” That’s social capital. You build a relationship with someone long enough, well enough, and strong enough that when you need help, assistance, advice, coaching or a referral of some kind, people are more than willing to do it. And of course, it takes time to build this kind of relationship.

SJ: Yes, it does. So for Peter, our character in Dragons at Work, it looks like he hasn’t taken that time. What would you tell someone like Peter? How would you advise him to start building his social network?

IM: There’s an old Chinese proverb that goes something like this: “What’s the best time to plant an oak tree? Twenty-five years ago. When is the second best time? Today.”

If you haven’t built a network, it’s not the end of the world, but don’t expect networking to be a magic bullet. It takes time. Everything I teach is based on one core foundational philosophy: the VCP Process of networking. And if you haven’t built your network (as Peter has not) you need to understand this in order to move forward. VCP stands for visibility, credibility and profitability.

First, you have to be visible. People have to know who you are. They have to recognize you (whether in a corporate environment or an entrepreneurial environment). Otherwise, they won’t refer to you, ask you for advice, or give you business.

From visibility you go to credibility. Now people know who you are, what you do, and what you’re good at. They know you’re good at it because they’ve worked on projects with you. Maybe you’ve done business with them or know people who have worked with them who speak highly of you. At some point, you get to credibility.

The third phase is profitability. And although I often use that in an entrepreneurial environment where profitability is about getting business, it can also apply to profitability in a relationship. In Dragons at Work we have a corporate environment, where the profitability comes from people being willing to help you, support you, support your project and support your position.

That profitability only comes after you’ve gone through the stages of visibility and credibility; yet people often try to take withdrawals before there’s any social capital. They start to ask for things before there’s a strong relationship. It takes months, if not years, to get through the VCP process, and Peter needs to start doing that now so that he’ll be in a position to utilize his network effectively in a few months.

SJ: And how would having a really strong network, at this point, make him more courageous with his contributions?

IM: Well, I think it starts with diversity. Diversity in a network is critical, and it would really help in Peter’s case.

Networks, by nature, tend to be clumpy or cluster-like. We hang out with people that are very much like ourselves. We hang out with people from a certain socioeconomic background or educational background. Our friends tend to be each other’s friends. The demographics of the people in our own personal network usually are not diverse.

This is a huge mistake if you want to build a powerful personal network. The more diverse your network, the more powerful it is. And the reason for that is the more diverse your network, the more likely you are to have connectors who connect you to more unique clusters of people.

You asked how, if Peter had a strong network he’d be more courageous. Well, diversity in your network enables you to go outside the box. If you have a powerful personal network that’s very diverse, you can call upon people who have different skill sets than you; who have more expertise than you in other areas. That enables you to be more courageous in either your workplace or as an entrepreneur. You have contacts who can help you, so you can be more courageous because you’ve built these relationships over time. Diversity is key to having a powerful personal network in so many ways.

SJ: From what you just said, it seems that having a diverse network would make him more innovative and therefore more valuable. And that would give him more confidence to speak up at work. That’s a great way to look at diversity.

IM: Yes, no question about it. And in our networks, we tend to pooh-pooh other professions or other businesses. It’s like I don’t need that contact. What can this person do for me? How could that individual possibly help me?

First of all, you never know who other people know. A few years ago I wrote about what I call the “butterfly effect of networking”. The butterfly effect is the idea that the flapping of the wings of a butterfly causes a minute change in the environment and leads to a cascade of changes that affects the weather.

Small changes in one place can lead to huge changes in another place. If we mostly spend time with people who are like us, the butterfly effect is less likely to happen. If, instead, we connect with people from richly diverse backgrounds, both social and professional, all of a sudden there is a ripple effect in your network that can lead to amazing outcomes.

As an example, a business coach from BNI asked me for a favor. That favor led to my doing a project, which led to a speaking engagement, which led to my meeting our friend Jack Canfield, and that led to my meeting somebody else which led to my being invited to Necker Island and meeting Richard Branson. I spent a week on Necker Island with Richard Branson and had the opportunity to meet a number of other amazing people.

SJ: That reminds me of another of your concepts I find particularly valuable. You believe that being generous in your social networks is what really makes them come alive, and makes them enjoyable as well.

IM: In BNI we have a philosophy that givers gain. If you want to get business, you have to be willing to give business. You have to be willing to help other people. It’s a part of social capital theory and it’s known as the Law of Reciprocity.

The Law of Reciprocity is a transformational law, not a transactional law. A good friend of mine, Dr. Wayne Baker, says, “You can’t use the Law of Reciprocity transactionally.” He calls that coin operated networking: I’m going to put the coin in because I want the candy or “It’s really nice to meet you, Stephen, and I need this from you right away.”

If you make networking transactional, it doesn’t work. It has to be transformational. It has to be truly an example where the sum of the whole becomes greater than the individual parts. When you get people working together, helping one another and building that social capital, the results become exponentially greater.

I believe that networking is about trying to help other people. For example, in my book Truth or Delusion, we pose a series of questions and then ask, “Is this truth or is this delusion?” One of the questions is “Can you network anywhere, anytime, anyplace, even at a funeral?”

Most people say, “Well, of course that’s delusion. You can’t network at a funeral.” And I believe it’s not a delusion. It’s truth. You can network anywhere, anytime or anyplace, but there are a couple of things that you have to know. One is you must always honor the event. Walking around at a funeral passing out your business card is not a good idea.

My co-authors, associates, and I, define networking as “helping other people to build their network so that they help you.” And by helping other people, I don’t mean, “Let me sell you this,” or “Do this for me.” So if networking is truly is about helping other people, then when is it inappropriate? If it truly is about helping other people, I think the answer is never.

SJ: Beautiful. I often get asked this question about networking: In this digital age, where’s the most important place to spend time? In online social networks or face-to-face interactions?

IM: That’s a great question, and I believe the answer to that is it’s not either/or. It’s both/and. BNI is a face-to-face network. We have 6,000 groups that meet every week all over the world. People will often say to me, “Hasn’t online networking really impacted your face-to-face program?” And my answer is always, “Yes, absolutely.” When did the Internet really get rolling? The mid-nineties?

SJ: Yes.

IM: In the mid-nineties, we had about 500 groups. Eleven years later, we’ve opened 5,000 groups. So as you can see, the Internet has really impacted the face-to-face organization. It’s not either/or. It’s both/and. One does not cancel out the other.

I’ll give you a quick story. In Networking Like a Pro, I talk about being interviewed in Stockholm by a big newspaper. They sent this twenty-year-old kid to interview me about face-to-face networking. And he spent the first ten minutes of the interview berating me for running what he called the buggy-whip business of networking.

After he finished this tirade I said, “Okay, so why are you here?” And he looked at me and said, “What do you mean?” I said again, “Well, why are you here?” He said, “Because my boss said I had to do this interview.” I said, “But it took you an hour-and-a-half to drive here. Why did you drive an hour-and-a-half? It’s going to take you longer to get back in traffic. Why did you drive here rather than just pick up the phone and call me?”

He looked at me and without skipping a beat said, “Because doing an interview face-to-face is always better.” I just looked at him and shrugged my shoulders. All of a sudden he said, “Oh, wait a minute. I get it. There are elements of face-to-face that you just don’t get over the phone or over the Internet.” And I said, “You got it.”

So it’s not either/or; it’s both/and. I’m a believer in online networking. I’m active on LinkedIn, Facebook, Twitter and Ecademy. The power of social media is that it increases your touch points in networking. It allows you to stay in touch, today, in a way that we couldn’t do when I started BNI in 1985.

However, I’m a believer in face-to-face connection. There’s something about shaking somebody’s hand, looking them in the eyes and having a conversation. Online media is a good way to stay in touch with people over time. It’s also a great way to have people follow you if they’re interested in what you’re doing. So it’s not either/or. It’s both/and.

SJ: What do you think is the future of networking and BNI now?

IM: I think face-to-face networking is going to continue. In some ways the Gen-Xers and the Millennials are going to be desperate for face-to-face networking. It’s a skill set they haven’t learned and it doesn’t necessarily come naturally. Online social media is going to continue, but there’s going to be a gap in people skills and networking skills that organizations like BNI and other networking organizations will be able to fill.

SJ: I agree with you.

IM: You know, Stephen, we don’t teach this in colleges and universities. We have people with bachelor’s degrees in business that don’t have a clue how to network. Most professors teach what I call sterile marketing. They don’t understand the power of networks and how they work. They think it’s soft science and most of them have never run a business, so they don’t understand the value.

I just did a survey for my next book and we asked business people, “Has networking played a role in your success?” and 92 percent said yes. When have you ever seen 92 percent of any group of people say yes to anything?

SJ: That’s amazing.

IM: And yet we don’t teach it in colleges and universities.

SJ: Can you say something about how being well networked helps in career advancement and finding a job?

IM: Every survey I’ve seen in the last twenty years has indicated that an overwhelming majority of jobs are now being filled by referral not by advertising. I know USA Today did a survey a few years back, and it was an amazing number, like 75 or 80 percent. So that fits within intrapreneurial, internal networking.

SJ: I’ve seen 80 percent. Have you heard of the 1993 study called “Star Performers at Bell Labs”?

IM: It doesn’t ring a bell!

SJ: They wanted to find the qualities of star performers that produced the great discoveries and patents. They controlled for IQ, so it wasn’t a factor. The two things that made the biggest difference were being involved in networks and being proactive in work style, like just “get it done.” For example, what did someone do when they got stumped? They didn’t go to a library or do a study. They picked up the phone and in five minutes had a new direction. So they had diverse networks and a proactive response to challenges.

IM: Wayne Baker wrote in Achieving Success Through Social Capital that people with a powerful personal network are healthier. When I read it I thought, Really, Wayne. Please. That can’t be true. That’s crazy! Then I read the evidence. He looked at people who had a powerful personal network and what they did if they had a health challenge: they didn’t just rely on what their doctor told them. They started talking to their friends, associates, to people in their networks.

They rallied around the person and were an amazing resource for expertise (again, it’s that diversity) in areas that the individual alone didn’t have. This opened a world of options to help them with their health issues. It makes total sense, but I would never have thought that.

SJ: I’m not sure if this also came from Wayne Baker but there’s research that shows that a healthy social network builds your immune system, as well, because we’re social creatures, and we’re not meant to be isolated.

IM: Wayne also talked about a concept I love: the proximity effect. It turns out that proximity makes a big difference in one’s network. He quoted from a study at a university which polled close friends. They asked them, “Okay, so you’re very close friends. Why?”

They said, “Oh, because we have similar interests. We both like basketball. We both like playing games.”

“How did you meet?”

“Oh, well, we’re roommates.” Or, “We take two or three classes together, so I see him three or four times a week.”

What’s interesting is that it’s the proximity that actually leads to the overlapping areas of interest.

SJ: Yes, and it also creates diversity, because a roommate or somebody living down the hall might be someone you would otherwise never meet.

IM: That’s true, but people’s natural tendency is to hang out with people that are like them. An example is race. It’s very important to strive hard to break those boundaries and to include people from other races and educational backgrounds in your network. I see it often with highly educated people who don’t want to hang around people who are not highly educated. Conversely, the uneducated hate hanging around with people who are highly educated because they think they’re snobs.

SJ: Well, it also happens with people’s political or religious beliefs, as well. People get siloed. You only seek information that reifies your beliefs.

IM: Very true. You see so many people who are very religious and they never want anyone around them who don’t agree with their version of spirituality. Again, we have to strive to open our networks to a diverse group.

SJ: Thanks, Ivan. You’ve made a great contribution. I hope that the people reading this interview will get excited about BNI, go to your website and see all the resources that are available for them. That’s at BNI.com.

IM: My pleasure. Glad to help. People can also go to my blog. I have a lot of free content up there every week, including videos and articles on networking. You’ll find articles on what we talked about here, today: VCP Process, the butterfly effect and diversity.

In what ways, big or small, have you added value to your networks? Please leave your story in the comment section.


Stephen Comments On How To Design the Coaching Relationship

Dragons At Work Weekly Wrap UpIn Chapters 4-6 Dan decides to hire a coach and he interviews three coaches before he makes his choice.

There are multiple outcomes for a first meeting with a potential client. Most important is to provide the richest set of experiences possible, so the client can make an informed decision. Many executives haven’t worked with a coach, so they’re unfamiliar with the interview process. But they are familiar with job interviews, and they may want to interview the coach the way they would a prospective employee. Although they may feel comfortable and in control doing it this way, it won’t give them the information they need to make a good choice.

I believe a coach needs to persuasively invite the client to, as Michele says, roll up his or her sleeves and have a brief working session. There is no substitute for the direct experience of working together.

Of the three coaches, Michele succeeds in engaging Dan. She sidesteps his request for a theoretical conversation and using humor, she gently confronts him: Does he want to work or not?

The first coach makes the mistake of acting like a consultant. It’s helpful to have pertinent technical knowledge, but the real job of the coach is to develop the client. Simply offering technical advice, especially to someone who’s already an expert, is a losing proposition.

The second coach loses control of the meeting. She falls into the trap of answering Dan’s questions. His behavior unmistakably tells her that he doesn’t care about the questions or the answers. Instead of addressing that head on, she talks about what holds interest for neither of them.

To begin their coaching, Michele asks Dan what questions about the project are on his mind. He floods her with questions. Dan becomes frustrated with her when she says, “Those are all good questions.” He wants answers. Of course, Michele would be foolish to provide answers for two reasons. First, she has no answers. Second, even if she had great answers, Dan, who has yet to begin any self reflection, wouldn’t be able to understand or assimilate them. Michele’s job is to provide the framework and act as a catalyst for
Dan’s inquiry so the coaching reveals what he needs to know.

Michele also uses the interview to test if Dan can follow her breathing instructions and calm down. His response tells her that he may be able to take advantage of her expertise in mind-body disciplines.

After a sleepless night, he chooses her over the other two coaches.


For Executives: To choose the best coach for yourself…

  1. Be transparent and hold nothing back in an initial working session. That will allow you to check out the coach’s real competencies.
  2. If you have questions about the process, ask the coach directly, rather than making private assumptions and judgments. The coach’s responses will help you decide whether or not to hire that coach.
  3. Chemistry is important. Trust your gut. You’ll spend a good amount of time together, and the coach has to be someone you can respect and collaborate with.

For Human Resource Executives: In choosing coaches for your executives…

  1. Coaching is a profession without entry barriers and few recognized credentials. Check the coach’s background and experience.
  2. Make sure that your coach knows how to deliver results so that evidence of success is apparent to key stakeholders. It’s even better if the coach is schooled in how to quantify results and offer a business rationale that speaks to your company’s strategic goals.
  3. Make sure there is a true ROI for coaching. Coaching should deliver a return that is worth 10 to 20 times your investment. If that is not the case, consider alternatives.

For Coaches: In choosing clients… (it’s much the same as for the executive choosing you)

  1. Be transparent and hold nothing back in a working session. That will allow you to check out how the client responds to your approach, and it will deepen your connection with them.
  2. If you have questions about the client’s responses, ask the client directly. Your job is to make sure the client gets the best coach, and it may not be you. So, inquire and be ready to refer.
  3. Chemistry is important. Trust your gut. If you don’t think this client is a good fit for how you work, be honest and offer alternatives. You need to coach people who are a great match for you. If you give that value primacy it will best serve your clients and your business.
  4. Make sure you have a strong working partnership with your internal HR partner. S/he can provide you with background and onsite observations you can’t get any other way.

Question for Reflection: If you had the opportunity to work with a wise and skillful coach, what would you tell the coach about yourself and your goals that would lead you to the core of what your coaching would be about?

In the next chapters we’ll see Michele and Dan dive into their coaching work. Intrigue, more tools and useful stories are to come.

Stay tuned.

Did you miss the previous chapter?