“Participants” are a basic component of any network, whether they be organizations or individuals.  But that is a pretty broad term, and most networks really require a much more elaborate definition of roles.  For example, is a “participant” the same thing as a “member”?

A couple of years ago I had conversations with several global, multi-stakeholder networks to better understand these issues.  The same word is used in very different ways, and confusion between distinct concepts was creating confusion among network participants.  The Table below is a product of the conversations, and suggests that networks should distinguish between four roles.   For both the network and its stakeholders, decisions to fit into one category versus the other is wrapped up with important strategic decisions.

The networks generally have a broad approach to who can become a participant:  anyone who is a stakeholder in their issue or wants to become one.  This is equivalent to the concept of “citizen” as someone who has rights, but does not necessarily exercise them.

Co-owners have some specified decision-making rights, typically around voting in Board or other elections, standing for election, or voting on policy issues.  Being a co-owner is usually associated with signing on to a set of principles at a minimum.

Occasionally certain categories of organizations are not citizens, although they are stakeholders.  For the Tobacco Free Initiative, a decision was made to prohibit tobacco companies from participating since the Initiative’s goals and those of the companies were perceived as antithetical.

Some stakeholders are happy to simply be a citizen, take advantage of the work of the networks, but not become active – referred to economically as a “free-rider”.  This is particularly true for networks that produce new learning or policy change, such as The Climate Group when it brings together cities and other stakeholders to develop innovations around LED lighting…of course the networks are usually pleased to have their learning adopted, but free-riders make networks’ business model problematic.

A stakeholder might be a “citizen”, but make a strategic decision to actively oppose a network.  One example is with forest companies that have formed the Sustainable Forestry Initiative in opposition to the Forest Stewardship Council’s multi-stakeholder certification.

Other stakeholders might strategically chose to be participants, but not be a co-owner.  Greenpeace is a strong campaigner on fishery issues and participates in the Marine Stewardship Council (MSC) assessments to determine whether a fishery is sustainable.  However, it does does not sit on MSC’s Stakeholder Council, because it prefers the added independence of action that can come with the role of “participant” versus “co-owner”.

For many networks, certain categories are allowed to participate, but not be co-owners.  IUCN allows some businesses as participants, but they are pointedly not allowed to be co-owners.  Governments cannot become members of the Global Reporting Initiative (although it has developed a Governmental Advisory Group), out of fear that its voluntary nature would be seen as an avenue to mandatory rules that would diminish GRI’s ability to attract corporate members.

In contrast, in terms of the Table, governments are co-owners in the Kimberley Process that stems the flow of conflict diamonds.  However, the Process refers to them as “Participants”;  active business and NGO stakeholders are referred to as “observers” but are participants in terms of the Table. Participants and Observers meet in Plenary annually.

Not uncommonly, organizations are referred to as “members” officially, but have no formal decision-making power.  In fact, they are simply participants.  The Microcredit Summit Campaign refers to “members” as those who have done a variety of things, the most notable reporting for three years on their activity to support the Campaign’s goals.   However, the Campaign is legally a program of an NGO called Results Education Fund whose Board has legal authority (is the owner).  The Campaign Executive Committee consists of people who have agreed to be such at the request of staff, but its meetings are sporadic and advisory.

The fourth concept that often gets mixed with “membership” is really a financing strategy.  Some networks require that members pay dues.  However, often this obligation is restricted to, or  higher for, for-profit companies.  The Fair Labor Association, for example, has a sliding scale based upon the size of the company and with a minimum payment of $5,000.  The rationale for selecting only companies to pay is that they actually derive financial benefit for participation whereas for the NGOs participation is a net cost.

How does your network think of “partnership” and”membership”, and does it create any confusion?

The world’s premier alliance of multi-stakeholder change networks is reviewing standards that operationalize their change strategy. The ISEAL Alliance is the global association for social and environmental standards.  Members include the Forest Stewardship Council (FSC), the Marine Stewardship Council (MSC), Social Accountability International (SAI), the Fair Labelling Organization (FLO: fair trade) and the International Federation of Organic Agriculture Movements (IFOAM).

You know ISEAL organizations by their labels:  Fair Trade’s on coffee, MSC’s on seafood,  FSC’s label on paper and wood products. ISEAL’s Impact Code helps define what to measure and how to measure in order to be awarded the labels. Highly relevant is the work of 2009 economics Nobel Prize winner Elinor Ostrom.

The Change Strategy

The change issues are sustainability and economic justice.  A basic Code element of the change strategy is multi-stakeholder engagement.  This produces a “whole systems” perspective about how companies’ actions impact social, environmental and economic outcomes. This is a big change from the traditional exclusive corporate focus on its own financial welfare.

Currently the standard does a good job of defining who stakeholders are.  However, how they must be engaged is defined under the very general concept of “consultation” that raises questions.

For MSC and FSC, certifiers who meet certain standards are hired by a “client” (usually a forestry or fishery company) to determine whether certification standards are being met.    Typically certifiers interview stakeholders individually and there is not necessarily a collective meeting of stakeholders.  Nor is there any requirement that a multi-stakeholder group be developed to manage the fishery/forest or ensure the certification standards are being met between the certification renewals.

This is distinctly different from the strategy of the Global Fund to Fight AIDS, Tuberculosis and Malaria (the Global Fund) and the Extractive Industries Transparency Initiative (EITI).  The former only accepts funding applications from multi-stakeholder groups;  the latter, a spin-off of Transparency International, requires that applications for “validation” of transparency standards come from multi-stakeholder bodies.

“EITI offers a platform for dialogue to discuss transparency issues,” Tim Bittiger, EITI Regional Director explained to me.

The Nobel Prize

Ostrom won the Nobel Prize for her analysis of economic governance. The media release announced her win this way:

“(Ostrom) has challenged the conventional wisdom that common property is poorly managed and should be either regulated by central authorities, or privatized. … She observes that resource users frequently develop sophisticated mechanisms for decision-making and rule enforcement to handle conflicts of interest, and she characterizes the rules that promote successful outcomes.” (Royal Swedish Academy of Sciences 2009)

She spent decades studying successful resource management at the local level by multi-stakeholder groups.  Most of ISEAL’s members are multi-stakeholder networks at the global level, which reflects their theory of change.  This would lead you to expect that they would find this a compelling arrangement locally, as well.

Empowerment

Paddy Doherty who is managing the Impacts Code review process, says that ISEAL members talk about the importance of “empowering” stakeholders.  This suggests the importance of creating new governance arrangements locally where differences can be worked out, and collective planning and heightened standards can be advanced.

As might be expected, there is already experience with cross-stakeholder groups locally.  FLO deals with cooperatives that cross the traditional labor-management divides.  MSC Project Manager Amanda Stern-Pirlot comments that: “If a fishery has certification conditions (i.e. has to make improvements over the course of their certification) often the cooperation of others is needed to fulfill these conditions, particularly when improvements to management systems are needed. In lots of situations, having a good collaborative relationship with stakeholders outside the client group is essential.”

Multi-stakeholder Platform Issues

The idea of forming multi-stakeholder groups for certification raises skills issues. Typically certifiers have traditional auditing expertise (eg.: from Arthur Anderson) and would not be equipped to handle some of the dynamics and associated goals.  Making multi-stakeholder platform development would require a very different set of competencies.

Doherty raises the valid point that the Global Fund and EITI are dealing with different situations:  handing out large amounts of money in the one case, and working with large corporations and governments in the other.  However, maybe this simply suggests a modified strategy to foster formation of a multi-stakeholder group.  It could be made a condition of renewal of certification, for example, so the initial certification ushers is contingent upon a plan and commitment to develop a local platform.

The big product and attraction to multi-stakeholder platforms is their ability to coordinate their very distinct resources and capabilities, and challenge each other’s parochial perspectives, to produce very wonderful innovation…to do what none of them could imagine doing on their own.  This is the type of change that is required to realize the objectives of ISEAL Alliance members.  This has been well-documented, including in my last book Societal Learning and Change:  How governments, business and civil society are creating solutions to complex multi-stakeholder problems.

Until 30 April 2010 you are invited to contribute your ideas for improvement, discuss key issues, and propose changes to the code.

When participating in a seminar on partnerships sponsored by the Royal Netherlands Academy of Arts and Sciences, I noticed that people were using the terms “network”, “partnership” and “organization” inter-changeably.  This created a lot of confusion.  Consequently I developed the table below to help distinguish between the concepts and identify important implications for organizing.

Others may use the terms differently. Some may consider what are here referred to as “partnerships” as what I mean when I write “network”.  Partnerships are defined as task oriented – they have a relatively limited and well-defined objective such as producing a report or constructing a water system.  The main rationale behind them is to coordinate activities, resources and skills.  There are perhaps as many as a couple of dozen participants – a small enough number for people (or organizational representatives) to know each other and coordinate activities.  They are organized on a hub and spoke model, with a central coordinating committee or organization of some sort.

In contrast are inter-organizational networks that may have thousands of participating organizations and tens of thousands of people from those organizations participating – many more than can possibly know each other.  They come together because they are participants in a system that they want to move in a certain direction – they want to create greater “coherence” between their activities.  For example, the Forest Stewardship Council (FSC) wants to move all stakeholders in the “forest and forest-product system” in a direction that supports sustainable forestry practices.  This includes forest companies, manufacturers of forest products, retailers of those products, environmentalists, the forest communities, consumers, financiers and others.

But the FSC’s success is not dependent upon its ability to engage every stakeholder organization as a participant.  In fact, building upon the “tipping point” theory popularized by Malcom Gladwell, FSC probably can achieve its goal with only a minority of stakeholder organizations participating.  Its goal is to influence the whole system by engaging enough stakeholders so that it can change the rules of the system and the way it operates.  The “system” is very diffuse, and does not have any particular organizing focus although many organizations would be sub-network nodes, such as commercial timber company associations.

Of course FSC doesn’t have any formal power to enforce the rules (standards), but as adoption of them grows organizations that don’t follow them will find themselves locked out of some opportunities such as access to some customers.  (Over 50% of forestry products consumed in the UK are now FSC certified.)

One important complication is that big networks like Global Action Networks (GANs) are inter-organizational networks, but they have many “partnerships” within them working on particular projects.  For example, the Global Water Partnership has local partnerships working on a particular water basin.  But a GAN also is an “organization” in the form of what is usually referred to as a Secretariat.  This central node has staff and a reporting structure that is no different from other traditional hierarchies.  Larger GANs also have similar regional “organizational” nodes.

This usually is confusing for GANs.  They must be networks, partnerships and organizations.  They must understand which is doing what, and why;  they must be able to apply the appropriate “organizing logic” in each situation.  They must be excellent at managing Secretariat staff, at coordinating partner projects, and creating coherence for the network as a whole.

You may also be interested in a book that was produced by the Dutch symposium: Partnerships, Governance And Sustainable Development:  Reflections on Theory and Practice.  The Chapter co-authored by me and Sanjeev Khagram is available here.

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?