Appropriate network support action will depend on the stage of network development. There are three distinct stages networks evolve through with each stage requiring capabilities in addition to those of the previous stage.
STAGE 1 - OPERATIONAL
A variety of activities are required to support network operations, including: recruiting network members, induction briefings to develop shared expectations (how expected member contributions, benefits and risks will be shared, and how and when feedback will be provided and communication will occur). The challenges at this stage include ensuring promised benefits are available on time, sustaining development momentum, providing timely relevant performance feedback and making necessary operating adjustments.
STAGE 2 - ADMINISTRATIVE
To support continuing network growth beyond the initial operating establishment stage, a systematic administrative support infrastructure to monitor network operations and highlight what is working and what may need adjustment needs to be developed and support for critical executive functions, such as event management, needs to be provided. Network growth depends on identifying early activities that lead to desirable results and the rapid reinforcement and promotion of these activities.
Network controls need to be viewed as a basis for learning how to do it better next time rather than as a compliance device. If administrative network control becomes too complex, operational flexibility can be stifled and the network purpose can be hindered. Projected control variances can provide a useful basis for anticipating potential future issues and allow the lead time to take appropriate adjustment action to deal with them.
STAGE 3 - STRATEGIC
In the development of every network, a stage will be reached at which a strategic capability is needed to ensure the network can adapt to evolving threats and opportunities, otherwise the network will most likely begin to decay. Major networks such as those of Amazon, Apple and Google are continuously evolving the range of benefits they offer their members.
If a strong purposeful collaborative climate has been established and is supported by a shared strategic network vision that encourages experimentation, a shared future development strategy will inevitably emerge. If development of the network has generated members that hold dominant power positions that are used for personal gain, the network will progressively lose its creative vigour, propensity to experiment and, in time, its member base. Various strategies can be adopted to prevent the emergence of abusive and coercive concentrations of power, like granting veto power under certain circumstances, rotating network roles, instilling operating principles and enforcing rules that limit potential power concentrations (for example, by placing an upper limit on the percentage of network business that any single member can secure).
Understanding how networks are established and sustained through the stages of their evolution is critical to effective leadership, especially while networked organisational structures are becoming more and more prevalent.
This is the second instalment of a two part series. Read part one.
Refer also to our earlier blog post: Corporates and Start-ups Collaborate for Innovative Hedged Growth