Establishing a successful network involves much more than just exchanging business cards or issuing invitations to connect. It requires taking explicit positions on:
- Why the network is being established;
- The profile of network members to be recruited;
- The minimum network size that can be sustained; and
- Anticipated network developments and how we will respond.
There are many different reasons to establish and maintain a network, including supporting a cause, creating referrals, generating innovative designs, supporting professional development, establishing a market research panel and setting up for bartering. It is also possible to have multiple network purposes for the one network by selectively engaging relevant network members at appropriate times. The network purpose will need to be specified in a way that helps to determine the desired profile of network members and the objectives that will need to be achieved.
DEFINE OPERATING OBJECTIVES
A network established to foster involvement in a hobby such as coin collecting may involve experienced collectors who are interested in sharing relevant experiences and who would be prepared to pay a membership fee. Operating objectives might include: establishing a website with specified functionality by a target date, conducting a webinar each month on a common issue with a recognised guest expert, organising a face to face conference each year and publishing a quarterly member newsletter, and generating $X revenue from selling advertising and $Y revenue from membership fees to cover network costs.
If the network purpose is to organise online charity events, then members will need to be enthusiastic about the charity concerned. Members with children that might benefit from the charity are likely to be motivated to contribute the time necessary to organise events. Operating objectives will be derived from the charity’s event project plan.
If the purpose of the network is to generate business referrals for an investment fund, then members might be licensed financial brokers whose opinion and advice is respected by clients who have funds available for investment. Operating objectives may include a specified net rate of growth in network members and an average rate of referrals per member over a certain time period.
NETWORK SUB-SYSTEMS
Typically, network operations will include systems that drive membership recruitment, send initial briefings to new members, manage ongoing communication with existing members, and provide ongoing network performance monitoring and feedback to suggest appropriate adjustments. A common mistake in developing network operating systems is to underestimate the time and creativity that will need to be continuously invested to improve network operations and maintain member engagement.
Given estimates of the costs and the time necessary to establish a sustainable network, the minimum feasible network size and the chances of achieving cost and benefit objectives at this size can be assessed. To manage establishment risks, a margin of error of 30% to 100% should be built into time-related cost estimates, depending on previous experience — time estimates become more accurate as a record of actual time use accumulates.
Establishing a successful network involves much more than just exchanging business cards or issuing invitations to connect. It requires taking explicit positions on:
- Why the network is being established;
- The profile of network members to be recruited;
- The minimum network size that can be sustained; and
- Anticipated network developments and how we will respond.
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.
