Networked Organizations

Networked Organizations (NO)

Draft: Glenn Eugster 10-31-05

Summary

Over the past 30 years networked organizations have been emerging as an important vehicle for institutional government. These organizations have shown a well-developed ability to create and sustain fruitful collaboration. Such collaboration give the public and private sector organizations involved a significant leg-up competing for time, money, and recognition. Increasingly researchers have been describing these organizations and analyzing how they function. Such information will assist practitioners, and policy-makers, to better understand the value and function of this approach and what is needed to use it successfully.

Concepts of Import

"Society is a seamless web of socio-technical constructions that emphasizes connection, interdependency and mutuality. Networks are both social and technical". Thomas Hughes 1983.

"If the enormous potential of technical networks to improve environmental quality is to be realized, it is necessary to view infrastructure management as a socio-technological issue". Thomas Hughes 1983.

"The notion of a linear planning process from concept to implementation is becoming increasingly inappropriate for technical networks. They will require new management skills to help respond to flexibility to chagrining circumstances and to link together the technical and social works of infrastructure management". Thomas Hughes, 1983.

"Each partner has a stake in mutual success". Stephen Levy, former Board member of Motorola

Sources

The networked organization is not a new concept. Note the "Keirestu" in Japan; WWI cartels; Alliance for Chesapeake Bay; Appalachian National Scenic Trail; Delmarva Peninsula (Delaware, Maryland and Virginia).

There is a wealth of information about NO's. Significant research related to and case study examples of include the above and:

Dwight D. Eisenhower's National Interstate Highway System (Divided Highway)
Sanitary Sewer Systems
Robert Moses' NY State Roads and Parks Systems
Benton MacKaye's Appalachian Trail
Strategic Alliances, Harvard Business School publication;
Interim Report: Overall Performance Study of the Global Environment Facility, IFC Consulting;
National, state and local heritage areas;
Networks of Power: Electrical Supply System, Thomas Hughes.
Social System Complexity: New Forms of US Federal Agency Environment, Durney, Wilson, Eugster, 2005
Governing by Network, Brookings Institute, 2005
Power of Environmental Partnerships, Arnold and Long, 1994

Background

Groups of companies, NGO's and governments are linking together for a common purpose or cause. These groups are often referred to as networks, clusters, constellations, virtual corporations, or Networked Organizations (NO's). These are groups of government or private sector organizations that are joined together in a larger overarching relationship. Although these networks are being developed in all areas of endeavor, they seem appropriate and especially strong in environmental governance.

Typically the characteristics of NO's include:

Few or many partners in the alliances
Individual companies, groups or governments differ in size and focus but will fulfill a specific role within the group.
Overarching collaborative agreements to which all network members are a party. Not all groups/ governments have to be linked directly to all the others. Some may be related only by virtue of their common ties to another network organization.
May be linked to one another through various kinds of alliances--from the formality of collaboration, an equitable joint venture, to the informality of a loose collaboration.
Include obvious advantages to members, as well as costs that are not as obvious.

Public and private organizations have created NO's in order to command competitive advantages that individuals groups or governments, or traditional two-group/ government alliances cannot achieve. The advantages of these NO's typically fall into three areas:

Technical standards--# of groups/ governments. adopting standards
Larger scale creates fertile ground for companies to spread costs over larger volume or give it access to skills and assets in different localities.
Specialists in each field can cooperate and exploit new opportunities much faster.

The forces behind this movement include:

1. Awareness of the size, scale and complexity of challenges

2. Solutions are ultimately located in the effectiveness of local actors

3. Insistence of local populations for participation in decisions that affect their local condition. The need and desire for empowerment.

4. Explosion in information technology--instant communication makes expanded networks possible

5. Efforts to reduce spending, to manage the remaining funds more effectively and efficiently, while providing high quality service for constituencies that are demanding greater responsibility and quality.

6. Growth of business and NGO's that can span government boundaries and provide advocacy and capacity for regional concerns

7. Decentralization of information.

8. Need for a more business-like approach.

Complex Adaptive System (CAS) Perspective

An approach being used by EPA and NPS to assist in the creation and support of NO's is called the Complex Adaptive System (CAS) approach. CAS "is a richly connected web of independent, interacting, intelligent agents, each of which operates according to local knowledge and conditions. Through this interaction, these agents create a system-wide ability to learn, respond and evolve to environmental changes that is greater than the sum of their individual abilities". Such an approach to community involvement--based on the concepts of non-linear, dynamic systems--stands in fairly sharp contrast to traditional modes of US federal agency involvement, based as they are on the more traditional linear, mechanistic view of systems.

The characteristics of CAS are:

1. A CAS is composed of multiple independent agents acting together.

2. Performance of a CAS is not reducible to its constituent parts.

3. A CAS evolves by learning and adapting to changes in the external environment.

4. The multiple independent agents in CAS act on local knowledge and conditions.

5. In a CAS, cause and effect are distant, and non-proportional.

6. Over time, change is non-linear: a CAS moves through periodic state shifts.

7. In a CAS, control is dispersed; no one agent is in charge
(For more on CAS see Social System Complexity paper for more)

NO's usually find that some sort of collective governance is important if not essential. Without it a group, or group of groups, risks becoming no more than a haphazard collection of alliances. Successful groups typically find a balance between the edge of chaos and overly structured organizations.

In creating or sustaining a NO, some of the key questions that are important to answer include:

1. What is to be achieved?

2. Why is it important to achieve this end? Why now?

3. What are the outcomes/ outputs of a successful system/ NO?

4. Who are those with a vested interest in the NO?

5. Who are the NO "system builders?

6. What momentum can be created by the system builders that will enable NO's to become a stable force that continues to reinforce itself internally and sustain other related efforts?

7. What are the reverse salients (retarded components) of NO's that hinder the future development of the system? They can be technical, social, organizational, economic, or cultural.

Although there is widespread documentation of the activities of NO's few appear to have been objectively or analytically assessed to determine their effectiveness or ability to be self-sustaining. Moreover, there do not appear to be any type of performance measures that have been established that allows a NO to be a self-assessment.

It is understood that these types of partnerships have a life cycle that may end once the cause has been accomplished or the partners have changed their interests. However, networked organizations must successfully face many significant challenges if they are to survive. Some of the challenges and institutional expectations that are relevant (taken from Durney) include:

I. Goals and Goal Congruence

A. Does the NO have a clearly stated mission that is well understood by the entities?

B. Are the respective functions of each of the entities clear and understood?

II. Oversight and Structured Informality

A. Is the guidance and priorities for the NO clearly defined?

B. Do they avoid overlap, and support a transparent work planning process?

C. Do the persons (staff) working on behalf of the NO share a common vision and orientation?

D. Are there organizational responsibility for stewardship of the NO life cycle?

E. Is there a standard project selection and review process that ensures new projects are aligned with the mission and strategic priorities of the NO?

III. Information and Communication Transparency and Knowledge Sharing

A. Are there mechanisms and organizational responsibility for gathering lessons learned and feedback from NO Projects?

B. Is there transparent and timely communication between NO entities?

IV. Coordinating Interdependent Tasks on Multiple Levels

A. Does the NO allow for smooth coordination of NO activities?

B. Are there rewards and performance measures that are appropriately structured to support the mission, strategic priorities, and objectives, including the coordination of activities and teamwork among agencies, groups and staff?

C. Are the NO entities designed so that processes, systems and people are aligned to achieve the set objectives?

V. Evolving Roles and Responsibilities

A. Are the roles, responsibilities, comparable strengths, and competencies of the NO entities clear and understood by the entities?

VI. Clarity in Measures and Outcomes

A. Do outcome-based objectives exist that are aligned with the strategic NO priorities and are they clear to the entities?

B. Is the effect of implementing recommendations monitored?

VII. Overcoming Capacity Shortages

A. Do the NO entities have a stable process and knowledgeable staff that provides consistency, dedication, stakeholder focus, and technical excellence to all work efforts?

B. Are the different NO entities adequately staffed in terms of workload?

VIII. Network Design and Network Enterprise

A. Is there flexibility in the NO to provide differentiated responses to recipient communities and organizations?

B. Does the NO Integrate diverse skills?

C. Is there a wide range of stakeholder involvement in decision-making and implementation, including federal, state, local and private involvement?

D. Is there a clear requirement to avoid creation of a new, stand-alone institution?

IX. Results

A. Does the NO yield benefits for the partners--beyond the immediate reasons they have for entering the relationship?

B. Does the NO connect the partners and create options for the future?