Organisations sometimes worry about letting their employees build personal networks, but should they?

Your network is your net worth, they say.

Professional services firms can be quite ambivalent about the personal networks that their employees build as they rise through the ranks. The fear is that if they leave the company, they will take clients with them. But limiting their ability to foster these relationships, such as by putting in place formal processes and routines, also limits the value that they could be bringing to the firm.

As it turns out, new research from INSEAD, one of the world’s largest business schools, indicates that professional service firms have a lot to gain – and little to lose – from the personalised ties their managers build in the course of their work.

Michelle Rogan, an associate professor of Entrepreneurship and Family Enterprise at INSEAD and her co-author Louise Mors, professor of Strategic Management and Globalisation at the Copenhagen Business School, examined the links between business development and personalised networks (as opposed to networks built as part of one’s official role).

The academics found that managers who use personal assets (such as their knowledge, experience and interests) to build professional relationships and trust are more successful in seeking new business than managers who chiefly network using their firm’s formal processes and resources. The impact was magnified when their network was composed of individuals hailing from different industries who were unlikely to know each other. Such a network provided managers with more novel knowledge, propitious to innovation.

(To find out how to leverage your network, read our article.)

“It’s probably through the social element of our relationship and trust that [a client contact] may well tell you that type of thing which can have an enormous impact on the type of advice you give him. Absolutely enormous,” said one executive interviewed.

Rogan and Mors also found that broader networks, with contacts loosely linked if at all, amplified benefits for the firm.

“A firm’s growth and survival depends on the ability of its managers to explore for new business. However, the specialised roles, routines and procedures companies create can limit the exploration of individuals working for them,” says Rogan.

A point underlined by another interviewee, who spoke about bringing himself to the forefront in client relationships.

“When you are speaking to the CEO… it’s not about putting very beautiful things up front like [our firm’s brand]. It’s about putting yourself up front with this in the background and not the contrary. Sometimes I tend to believe that for some partners they have put [too] much …of the firm before them. [Instead,] the firm should be behind you and not the contrary.”

Rogan studied the professional networks of 77 managing partners in a large, global consulting firm with offices in North America, Europe and Asia, serving clients across all industries.

Face-to-face interviews provided insights into their networking styles. Some executives retained a formal approach, while others preferred to keep things personal, with less emphasis on their official role in the firm.

Why the personal touch was more successful could be due to at least three reasons, says Rogan. Firstly, such managers have access to a greater diversity of information. For instance, a manager could be exposed to – and incorporate – ideas from other industries. Secondly, managers are not constrained by their role or their firm’s resources as they go about networking. Thirdly, the reciprocity principle is known to be stronger in relationships imbued with a personal dimension.

One interviewee applied his own analysis, talking about how the firm and the individual bring value together and how individual ties can serve as differentiators.

“What [clients] buy at a certain point is clearly [firm name] consulting or the ‘firm with a capital F’. But also they want you personally to be involved… In some cases they buy [your services]… because your firm is the best in the world. In other cases, there is no reason to select the firm and then you create a personal relationship.”

The findings suggest it would befit top managers to encourage their executives to nurture and use individual ties when exploring for new business opportunities or knowledge.

“Doing so may place the firm at a greater risk of losing clients if an executive should leave, and give executives more leverage when bargaining for position or salary, but the overall benefits to the firm outweigh these vulnerabilities,” Rogan says.

Want to grow your own personal network? Meet HR peers and learn about hot HR topics at your local AHRI network forum, and earn CPD points.