My mind is full of thoughts about network start-up issues, since I’ve been asked to help develop a new global one that brings together academics and corporations for sustainability.  The experience illustrates four lessons about the exploration stage and initiation stage of the four network development stages.  Elements of those first two stages were combined into a “Step 1″ through the end of this year.

The lessons emerged last week at a first meeting in Milan with a luminary group of  about 20 academics.  It was organized by the indefatigable Maurizio Zollo who heads up the Center for Research in Organization and Management (CROMA) at Bocconi University, a leading European business school.

Lesson 1: Be passion-driven and work-focused

Happily both of the lead speakers who are known for their profound thinking spoke to these issues…the indomitable Simon Zadek and the quietly centered Ed Freeman.  Such people have lots of great choices about how to spend their time, and giving outlet for personal passion is required to engage the quality of leadership necessary to give life to an influential global network.

And you’ve got to know what you want to achieve.  The global academic-corporate sustainability field is extremely crowded:  the Global Compact (PRME), the Global Reporting Initiative, the Principles for Responsible Investment all have their own such networks;  as well, there are others such as the (formerly European) Academy of Business in Society and the Globally Responsible Leadership Initiative.

In this case, distinctive purpose was easily identified because of historic inter-personal ties for many present, participants’ own expertise in network development, and by the year of preparation led by Maurizio.  The group’s critique is that sustainability is being integrated into corporations much too slowly.  To change this, the group’s interest concerns (1) advancing knowledge about organizational learning and change towards sustainability, and (2)  actively supporting organizations’ transition towards their own model of sustainable enterprise.

The group coalesced around Step 1 of six months that will produce leading comprehensive case studies.  These will provide key insights as the basis for any future action.  (Click on photo of meeting participants and key to increase size).

Lesson 2:  Think “community-development”, not “governance structure”

I always get worried when people talk about “governance structure” in the abstract.  It should arise out of the need to support a community of people to do work and experience from doing the work.

Community development requires not just clear articulation of, and commitment to, the group goal, but also with respect to goals of distinctive stakeholder groups’ and individual participants’ goals.

In this case, community will be developed through interactions that produce the case studies, their analysis and definition of future action.  What’s needed structurally to do that work?  Nothing much.  There’ll be a call for proposals, networking to get the needed global complexion of research centers to respond, and organizing of an event to discuss the cases.

However, to optimize the potential for a successful Step 2 does require some more work.  There must be some community development work done with the proposal submitters, and infrastructure must be in place to immediately follow-up and support the outcomes of the next meeting.  I have participated in far too many “event-focused” initiatives, that have poured attention into organizing a meeting only to be insufficiently prepared to support the passion and ideas that arise out of it.  The result?  Dissipation of energy and lost opportunity.

For Step 1 CROMA will lead administration, and the key investors – ABIS, Bocconi and INSEAD – will form the organizing committee.

Lesson 3:  Use leading tools

I arrived on the scene a bit late, and the initiative could not make use of some of the tools that would have helped a lot.  In particular, significant energy was spent to identify research centers and corporations to participate in the initiative.  The approach was the classic “who do we know”, and building out from there.

One problem with this approach is that it is very labor-intensive.  Another is that it is necessarily limited by current connections…and often to produce the needed innovation requires going beyond these.  But perhaps the biggest problem is that this comes from a “building” approach that can badly alienate people, rather than a community-weaving approach.

This is a crowded issue field.  The project’s success requires “weaving together” current activities in new ways…the “building something new” approach of asking others to “join us” will inevitably provoke hostility from people who have been working in the field for some time and will say “why don’t you join us!”

Mapping using web crawls and social network analysis supports a weaving strategy, by heightening understanding of who is already working in the issue arena, their current relationships, and how to complement their activity.  As well, it can be much more economical and comprehensive.

Lesson 4:  Integrate reflection, learning and flexibility

These terms might be summarized with one word:  emergence.  That’s a key quality of networks successfully dealing with complex challenges.   Networks are complicated – there are lots of players, relationships, goals and activities.  However, change networks are also complex:  they don’t really know the “answer” to the challenge they are addressing, and what they should do.  What does a truly sustainable corporation really look like?  The network must stimulate questions and processes that produce an ever-more effective set of actions.

At the Milan meeting I heard people describe this more explicitly and with greater comfort than I’ve ever heard before.  I guess academics deal better with uncertainty than most (although their weakness is that they more often have trouble with taking impactful action).  The result?  They were fine throwing out the original proposal for Step 1, and totally redefining it around the case development process.

So one of my own learnings in this case is the value of having academics involved in these early stages of development.  Originally corporate-types were invited to them meeting, but they didn’t show up and that is probably just as well.  They would have been frustrated with the conceptual development discussions.  However, their presence at the next meeting with the cases is critical, for Step 2 to be successful.  This emphasizes the importance of developing the cases collaboratively with the corporations, and the value of meetings designed around what I call Action Learning Development.

In his follow-up email to the Milan participants, Maurizio commented “As an Italian saying goes, ‘the good day can be told from the early morning’.  Well, there could not have been a better early morning for the long and exciting day ahead of us.”  I agree!

I was leading discussion by a half dozen executive directors of Global Action Networks on the topic of competencies critical to success when we turned to the question of resource mobilization.  I was surprised that none of the leaders thought of financing as a major issue for them, in comparison to the other competencies.

“But what if you think about barriers to your network really flourishing and realizing its goals?” I asked.  That moved the issue of financing to the top of the list of challenges.

The question of financing is wrapped up with stage of development discussed last week and featured in a webinar March 3.  At early stages, less money is required and the question is about finding a venture investor to explore possibilities.  Later stages require more funds and a sustainable business model.

Gathering finance information is very complicated for a network, since it requires defining what part of the network the data cover. As networks develop, most increasingly depend upon sub-parts (regional, particular program) raising their own funds.  In May last year I surveyed 11 networks[1] ranging from 8 to 15 years of age with the initial question:

What was the total income (revenue) that came to/through the Secretariat for the most recent fiscal year including funds that may have gone to other parts of the network?

The response ranged from $500,000 to $11.4 million, with the average of $3.6 million.

Sources of Income

But the finance question is also wrapped up in strategy.  Being multi-stakeholder, the networks could be expected to have tax-based contributions from government, civil society-based funding from foundations and revenue generation from services and fees.  Table 1 gives responses to the question:

Please indicate the approximate percent of funds that flow to/through the Secretariat that come from the following sources.

Most networks perceived potential conflicts of interest with business revenue generation.  One way the Global Compact addresses this is with a foundation to receive business donations;  the foundation does not fund core Secretariat costs, but only the broader network.

Reasons for Funding

Strategy also raises Secretariat-network relationship questions.  For example, Transparency International Secretariat’s role in putting together up to 30 National Chapters for joint funding proposals has recently increased dramatically from less than €1 million a year to more than €5 million.  Table 2 gives responses to the question:

Please indicate the approximate percent of the types of funding/reasons for funding.

These global networks are all really producing “global public goods”…something funded at the national level through taxes.  Substantial global network funding comes through taxes with funding from donor agencies like DFID and multilaterals like the World Bank.  However, as Ernest Ligteringen who heads up the Global Reporting Initiative commented to me, it is fitting a round peg in a square hole.  A much more robust solution must be found to do the important work of global public good financing with categorical national tax transfers or a global tax.

What are your experiences with financing?  What sort of more robust solutions should we strive for?

We depend on networks to voluntarily provide information like this, for on-going development.  If your network is not listed below as a participant in the survey, please have someone fill out the survey by clicking here.  Data is for the 2008 fiscal year, and individual responses remain confidential.  The survey takes only an hour.

Networks often become “stuck” far short of their aspirations and potential. What processes can support a network itself to change, renew and revitalize?

The question is critical for networks that want to grow to their full potential.  The question was addressed last Wednesday in a webinar with The Access Initiative and last October in another webinar discussing the Global Knowledge Partnership.  And the question was the focus of a meeting that I led at Harvard Business School last February with a particular focus upon IUCN and the Forest Stewardship Council.

One useful framework to address this change challenge is “development stages”.  The diagram below describes the stages that my work suggests for global, multi-stakeholder networks…and is likely relevant to other network types as well.

(click on image to increase its size)

Stage 1. These networks typically begin as separate initiatives working on a similar problem.  They then decide to combine forces…often around a particular project, but sometimes to address the challenge in general.

Stage 2. As their collective activity grows, they create some common resources and establish a central coordinating function…often called a “Secretariat”.  With continued growth, some sub-parts of the network start to interact relatively independently to address particular issues;  often this takes the form of geographic sub-divisions or ones around a particular industry or specialized set of challenges.

Stage 3. As these sub-divisions become more numerous, dominant network interactions shift from the Secretariat, and the Secretariat itself becomes simply another node in the network with some particular functions such as interacting with global-level organizations and ensuring robust network communications platforms.

Stage 4. At a final stage, these multi-stakeholder networks themselves start to interact more often with other multi-stakeholder networks.

In the webinar, TAI’s Director Lalanath De Silva said TAI is really at Stage 2.5. It still possesses a founding Secretariat that he heads, but the network’s regional groupings are increasingly important.  TAI took a proactive approach to move into Stage 3.  However, this is a classic moment when many networks get “stuck” because people are “comfortable” with the status quo, and shifting to stage 3 involves to the Secretariat and Board “letting go” of their traditional control and the rest of the network “letting go” of traditional dependence upon the Secretariat.

To support TAI’s shift, Minu Hemmati and Bettye Pruitt of the Generative Change Community supported the Core Team in a strategic Re-envisioning process. Philip Thomas and I participated in the project team in an advisory role. The process included interviews and workshops with the Core Team (Board) and others in the network.

TAI’s change process has three Phases. The Re-envisioning was conceived as taking shape over three distinct Phases.  Phase 1 identified key issues through selected interviews and meetings with network partners, CT members and secretariat staff.   Phase 2 developed responses to the issues through interviews and meetings with a wider group of network partners, CT members and Secretariat staff.

The consultants used two “thinking tools” to support the CT in considering TAI’s strategy. One is a framework developed by Philip Thomas for the Generative Change Community.  This framework – Four Dimensions of Sustainable Change – helped structure conversations in the CT about the assumptions guiding TAI’s change strategy, the different kinds of impact TAI is seeking and seeing as the result of its work and the changes that might be necessary to make it more effective.

The other thinking tool was scenarios, described in last week’s blog.  Both tools were part of a report.  Phase 3 is in development.  It will transform the Phase 2 ideas into concrete proposals for network governance reforms while evaluating TAI’s impact.

The Global Knowledge Partnership change processes was very different and crisis-driven.  The GKP was founded in 1997 to promote the application of information and communication technologies in development (ICT4D).  The change process was stimulated by a shift in the priorities of funders who were also on the GKP Board.  They received an evaluation of the GKP in September 2008 that was very favorable, but at the same meeting announced that they were not going to be providing on-going support.

A Task Force of people with knowledge about the GKP and change expertise was established with leadership of Michael Roberts of Groupsia International.  I was engaged by the Task Force to produce a report and participate in meetings to provide knowledge about options based upon other networks’ development processes.  Mike Jensen was engaged to bring in knowledge about the trends in ICT4D and donors interests.

Over four months with GKP members there were interviews, a joint Board-Regional Coordinator-Consultants meeting, and a final Board-Consultants meeting.  Over the following month the Board announced that it would resign, two scenarios were presented for a virtual vote by members (both with a very reduced Secretariat), and new elections were held with robust participation.  The new Board held its own planning process, and although the vision remained unchanged there were significant mission changes.

One common theme through these change processes is to ensure structure reflects strategy.  A network’s successes and setbacks should produce evolving strategies that need incorporation into the structure.

Do these development stages reflect your experience? Have you transition stories?