Importance of “Networks” in Managing Service Providers
Milestone Report
July 2005
ISBN 978-1-74199-847-4 (PDF)
Authors: Ruth Lourey & Peter Howden
Acknowledgments:
We would especially like to thank Chris Linehan and Fiona Johnson (DPI, Tatura Centre) who have contributed to this report by offering suggestions, feedback and critique.
Introduction
Background
The Cooperative Research Centre for Irrigation Futures (CRC IF) is operating in a complex environment that is rapidly changing. Part of the complexity comes from the fact that there are many stakeholders with different views—not only about the solution to NRM problems, but also about the cause of NRM problems—, and an increasing competition for government funding. No single organisation/institution is in a position to control or coordinate the range of stakeholders, including government, industry, and private service providers, who are involved in the production of public good outcomes such as sustainable irrigation. There has been increased interest in, and requirement to work with, the range of players in arrangements such as partnerships and private sector service provision. In addition there is a need to operate in such a way that the CRC's desired outcomes can be achieved.
Lourey and Linehan (2004) investigated the relationship between public and private sector service providers, and the factors that influence the contribution of the private sector providers to natural resource management outcomes. The principle findings of this study indicated that the sectors often have differing business objectives when entering into joint arrangements and that these partnerships work best when there is mutual understanding of the expectations and goals of the relationship. Collaborative arrangements are challenging and the inherent differences in the partners ultimately influences the way organisations operate, or the level of contribution they will, or can, make towards collaborative outcomes (Lourey 2005). Whilst successful partnerships are possible, the institutional environment is complex and requires greater attention to the structures or processes that influence the conditions for joint action.
In such relationships, rather than relying on the more traditional hierarchies for coordination, there is need to focus instead on networks (Colebatch and Dawkins 2002). Creating greater collaboration between the public and private sector will require different structural arrangements (Edwards 2002), with players developing more skills in relationship management. Managing and coordination in this environment will therefore 'place a premium on networking skills' (Davis and Rhodes 2000).
Why do we think network management has something to offer?
While differing business objectives, institutional arrangements, and the complexity of the (NRM) operating environment all contribute to reducing the success of partnerships to achieve public good outcomes, what is often not considered is how the functioning of networks of stakeholders affect joint action. Lack of attention to the nature of network relationships can result in a misunderstanding of the source of conflict—for example, 'personalising' conflict by blaming the integrity or intelligence of a stakeholder (King 1993), rather than considering that disagreement can come from the nature of the relationship between individuals or agencies. The relations between individuals in a complex environment can influence what is called 'emergence'. That is, 'the interaction of individuals [stakeholders] in a large system can generate greater complexity than the individuals themselves display, and sometimes much less' (Watts 2003), and create unexpected conflict that inhibits a partnership.
Failure to consider the social context in which individuals operate stems from the (economic) perspective that individuals make 'rational' choices and act without regard to the behaviour of others (Kilduff and Tsai, 2003). Interactions with others in fact allows for other types of behaviour to emerge. There is considerable evidence that the type of network in which we are situated affects everything from our health, to career success, to the ultimate success or failure of our projects (Kilduff and Tsai 2003). Network analysis can have an emancipatory potential (Kilduff and Tsai, 2003, italics in original) in that it can inform us of non-obvious constraints and opportunities inherent in patterns of social connections.
Network management strategies offer a way of effectively operating in complex (network) environments. For example, it can allow us to pay more attention to the detail of alliances with players, identifying how to build influence in a system by closing (or opening) 'holes' in the network, or making decisions to involve (or disengage with) players. Operating in a negotiating way within the network signifies that one does not 'set other people’s objectives but seeks to find agreed objectives' (Davis and Rhodes 2000). The goal of network management then is the mutual forming of an agreement to work together for joint action (Howden and Gooey forthcoming).
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A useful case example is that of the management of Sydney Harbour (Colebatch and Dawkins 2002), where a manager was appointed to coordinate the activities of a complex array of public and private bodies involved in harbour management. In this instance the manager, whilst given no ability to exert control, and no budgetary power, was able to initiate a number of projects that resulted in a structure that enabled the development of joint action between the players (Colebatch and Dawkins 2002; Petris forthcoming). |
Objectives of this research
This report builds on the 'institutional' understanding developed from the previous work in this sub-project — Supporting irrigation community and industry responses to change at property scale (Lourey 2005)—and focuses on the need to develop the skills and capabilities of the organisations such as the CRC IF to work within networks.
The report begins with a short overview of some basic network concepts used in this research. An experimental case study process has been used to examine the 'networks' of three researchers. The objective of these case studies was to understand how individuals perceive the networks in which they operate and how 'deliberate' they were in how they managed their networks. The case studies are compared with the lessons from literature on network management, and social capital, to consider whether a 'network management' approach might give insights into the efficiency or effectiveness of these networks, and whether 'hidden' problems in the networks of these researchers that might be impacting on their interactions with others. With these insights we aim to demonstrate the value of deliberate attention to the function of the networks in which we develop collaborative outcomes.
There is a considerable body of literature on the nature of networks and how to 'do' network analysis (see for example, Scott 2000; Kilduff and Tsai 2003; Watts 2003) This report can necessarily only touch the surface of this literature and briefly outline the potential of this approach to assist the CRC IF to operate effectively in complex stakeholder environments.
| Some key network term used in this report: | |
| Network | A network is a set of units (eg. actors, players) and the relationship between them. |
| Structural Holes | Gaps in the social world (in the structure of information flow), where there are no current connections (Burt 2004). |
| Brokerage and Brokers | 'Brokerage is the action of coordinating across structural holes with bridges between people on opposite sides of the hole. Network brokers are the people who build the bridges (make the connections)' (Burt 2004). |
Networks: some basic concepts
Of particular interest in the study of networks (also in the study of social capital) are the structures of the network itself, the position of individuals in the network, and the resources individuals have access to via the network (PRI 2003). That is, the benefit you gain from being connected to other people, and the resources held by those you are connected to.
Network structure includes the strength of the relationship, which can range from weak to strong ties (Kilduff and Tsai 2003). Strong ties are characterised by relations that are more dense, or 'frequent, long lasting and affect-laden' (Kilduff and Tsai 2003). These type of connections allow for the build up of trust within a group and the ability to control by reputation and sanction (ie. group members can get together and sanction individuals who deviate from group norms). Strong ties, however, can create closed networks that can exclude external views and may not allow for the formation of new connections, and therefore the opportunity to hear alternative viewpoints (Howden and Gooey forthcoming). Important also are the influences of 'weak ties' that bridge the gaps between groups and provide access to new resources. For example, numerous studies show how new job opportunities or innovative ideas often come from utilising people outside your usual range of close friends (Lin 1999; Burt 2001). Weak ties are characterised by infrequent and distant relationships, and are more likely to have access to diverse information (Kilduff and Tsai 2003), whereas in closed communities individuals or the group may be receiving information containing the limited views of close friends or individuals within their densely structured community. In instances where innovation is required, narrow access to information and other views, limits the opportunity for originality (Burt 2004). In the context of developing collaborative relationships with service providers, strong ties may create a 'trusting' working environment, but they also may generate resistance to change (or compromise). Weak ties can create a more dynamic, creative working relationship, but may also be fragmented, changeable and 'untrusting' (Howden and Linehan forthcoming). Both sorts of ties may be important over the life of a collaborative relationship.
While the diversity of information available to groups can be influenced by the density of the groups connections, there can also be gaps (structural holes) in information flow between groups. This doesn’t mean that a group is unaware of other groups, only that they may be focused on their own practices and are not concerned with the actions of external groups. Individuals (brokers) can coordinate across these holes to people (or groups) on the other sides (Burt 2004). These people are in a position to operate strategically, for example, moving information between groups—therefore increasing the diversity of information available to the group. This role can also be used in a negative way. A broker may inhibit learning or influence the perceptions of those in the network, by withholding critical information or being selective in what information is provided.
How people are connected or the structure that surrounds them can influence how they respond or operate in varying situations. For example, bringing together a group around an issue can provide social support to deal with change. However, it may also have the opposite affect and make the group more resistant to change by closing them off to other world-views. Thus a network can be densely connected or sparse, centralised around an actor or actors, or maybe segmented with different (and maybe independent or interdependent) centres of control. Different compositions of social ties can provide varied benefits or resources to the actors within the network (eg access to career opportunities or promotions) (Kilduff and Tsai 2003), or conversely prevent the network from functioning effectively. For the network manager, the opportunity lies in an enhanced capacity to discern what network configuration is most appropriate for what task (Howden and Gooey 2005).
The 'value' of the resources in the network connections is also critical. All positions or locations within the network are not equal. If a tie or bridge does not link to new or useful information, then it may be of less value to the individual making the link (Lin 1999). In the words of Burt (2001, 2004) that tie is 'redundant'. The 'resources' available via network connections include power and reputation, as well as wealth—where network ties connect to people with economic power (Lin 1999). As well as facilitating the flow of information, network ties can exert influence on players positioned in the network structure, or influence social credentials (status) and therefore access to resources.
Some people build different networks from others, or some people can utilise network resources more effectively than others (Kilduff and Tsai 2003). For example people with a tendency to become 'brokers' build large less dense networks around themselves (Burt 2004). Also people who are better at understanding their network are, on the whole, better operators and more highly regarded by others (Kilduff and Tsai 2003). There is evidence, therefore, to encourage analytical consideration of the networks we construct and for being more explicit in the way we operate in them.
Introduction to project case studies
The case studies were designed to find out how individuals perceived the relationships within their networks, as well as what affect this perception—or understanding—has on their ability to operation within the network.
The case studies aimed to identify the interview subject's knowledge of:
- key individuals in their organisational networks, and the relationship between them
- the relative importance of these relationships and the frequency of contact with them, and
- the understanding of the role and value of the actors within the network.
Analysis of the result of these case studies was to identify any differences between how individual interviewees perceived their networks and what insights came from these differences. These insights were compared with lessons from a brief review of the network management literature (outlined above).
Methodology
Two interviews each were conducted with three researchers within the Department of Primary Industries (DPI) Victoria. The interviewees operate at a similar level within the organisation, working in the area of irrigation for similar outcomes.
This research used qualitative social research methods to collect data through face to face semi-structured interviews with individual researchers and a 'visualisation' process aimed at helping participants to describe their networks.
Initial interviews were conducted to formulate a list of stakeholders in the network and to develop a role description for each. The follow-up interviews were for further clarification and to expand on some of the information obtained in the initial interview. The second interviews utilised a combination of visualising or mapping (Parminter and Pederson 2000) and questioning to evaluate the relative influence of actors in the network and the type of relationship the interviewee had with them. The interviewees were asked to build a Venn diagram of the individuals within the network in relation to the interviewee (Parminter and Pederson 2000). The names of each of the actors identified by the interviewee were placed on a square piece of paper with the relative size of the squareindicating how important the particular actors influence was to their project outcomes. On a large piece of paper the interviewee was marked in the middle, with the actors (pieces of paper sized according to influence) being placed relative to their frequency of dealings in relation to achieving project outcomes. The furthest distance represented the actors least frequently used (Parminter and Pederson 2000).
In conjunction with the mapping process, the interviewee was prompted to elaborate on the reasons for placement of each person in the network to build the detail of the list and interviewers understanding of the actors' relationship within the network. Results from the Venn diagrams were analysed in-conjunction with the interview data.
Case studies: Key findings
Networks resources
The level of recognition of the resources available through individuals in the network varied between researchers. Researchers viewed individuals in the network either as:
- the resource they bring to the relationship (eg scientific input, input into the practical nature of the research, conduct the research, extension capacity), or
- part of the organisation they belonged (eg funding body steering committee, agency), or
- the type of role they fulfilled (eg collaborators, funding bodies, farmers).
This is not to say that they did not also recognise multiple value in individuals, but generally the researcher had only one way of constructing their network.
For example, interviewees were sometimes able to identify the differences in the resources provided by individuals with a similar role (eg extension). For example, some provided more political influence, or access to a larger grower base or knowledge than others. That is, while actors within the network carried out similar roles, interviewees were sometimes able to delineate their position in the network in relation to the value of the additional resources they bring.
There were also differences between the interviewees in the way they valued the different types of resources available in the network. Some, for example, placed more emphasis on the resources that provided (scientific) knowledge for their research, while others emphasised the importance of those in terms of (political) influence. In general, interviewees did not have a balanced view of the range of resources they required to do their job. There was evidence, for example, of interviewees favouring some network connections because they provided resources they 'liked' (eg. could help them do their science) rather than considering them as resources they ‘needed’ (eg. to achieve outcomes).
All the interviewees considered that the network and the relationships in them had changed over time and that this affected the relative importance of particular individuals. For some interviewees though there was little strategic consideration for how this might be managed pro-actively and there tended to be the view that they would respond to the challenges as they emerged.
Network roles and positions
Recognition of 'roles' in the system
Within the network structure there were varying perceptions and understanding of the roles played by individuals. One interviewee, for example, identified someone in their network that they have considerable contact with (too much he felt), and this contact required a lot of work (in terms of responding to emails etc.)1. However, during the course of the interview it became evident that this contact had significant input into the project outcomes. This person utilised their own networks to raise the profile of the researcher and their work, also assisting in securing additional funding. This contact also served as somewhat of a 'backstop', protecting the interviewee from some 'political' tasks. However, rather than perceiving the role played by this person—in this instance a broker role—, the interviewee possibly considered this individual as a blocker or a ‘problem’. That is, he 'personalised' the network relationship, relating to that individual's behaviour ahead of their role.
An example given by one interviewee suggested he had a more explicit understanding of the broker role played by one individual within their network—also protecting them from dealing with unnecessary ‘bureaucracy’. He not only understood the broker role played by this individual but considered this person as a successful network manager and wanted to make use of that 'resource' in the future for his own personal development.
Conversely, in another case an interviewee was clearly unaware of (or unconcerned with) a particular resource in their network. This interviewee was recommended to undertake some work, but was unaware of where the recommendation came from. In this case the broker role was not evident to the interviewee, and thus the opportunity to purposefully utilise that network position will not be available to the him in the future.
Recognition of network positions and strength of ties
There were differences in the interviewees' recognition of the opportunities available to them to manage their networks more effectively and efficiently. One interviewee had direct contact with lots of people, managing at the multiple levels personally rather than utilising brokers to make his job easier. A possible factor in this case is trust. If a network manager does not trust potential brokers to carry out a network role (this was suggested by this interviewee) then they may be reluctant to change the way they organise their network. Alternatively, 'familiarity' with a way of operating may also be a reason for inattention to inefficiencies in network operation.
All interviewees appeared influenced by past network structures. There was, however, variation in their expressed willingness to use alternative strategies to manage their network in the future. For example, one interviewee chose to manage all his funding bodies personally. In the past he had always had direct contact with important funders and now continues to do so. One consequence, though, was that the high level of attention to the funders in the past had created expectations of a continuation at this level in the future. The interviewee confessed that this was time consuming and inefficient, and that this was not necessarily his official role at present. He did not, however, consider that he would (or could) make any hard decisions about changing relationships in the future to set a more realistic level of contact, or reallocate responsibilities.
It was apparent in the interviews that there was a lot of attention to maintaining strong ties and a concern that these ties did not break down, without consideration of the cost (in time, energy etc.) of maintaining that tie, or whether that tie still had the same 'value' it had in the past. At least one interviewee did also speak of maintaining a 'weak' relationship with a member of their network, noting that they were not immediately useful in the context of the work they had to do, but were likely to be useful in the future.
Interviewees also spoke occasionally about differences in the ways the other networks to which they were connected functioned and how this affected their ability to work with them. For example, one interviewee spoke of different factions within one organisation, noting that each of the factions had their own positions on an issues, creating the need to manage the different factions points of view to achieve outcomes. What the interviewees often lacked though was a way to understand or describe the reason for the difficult relationships. Often the ineffectiveness of these relationships was described in terms of institutional barriers.
Institutional Issues?
There are a number of possible reasons why an interviewee may not be able to influence or manage parts of the network, or employ strategies to manage the network. One interviewee identified a number of factors he described as institutional issues (such as the project reporting structure, new organisational structures, line management arrangements or the necessity to make contact through the hierarchy) that restricted his ability to manage network function. (Refer to Lourey and Linehan 2004 for more discussion of the institutional factors that affect joint relationships). However, as noted above, institutional factors can have more impact if the network manager is reactive and tries to adapt structures they have used in the past, rather than thinking strategically about the new network structure and how they might be able to use it more effectively.
The value of mapping networks
When commenting on the process of mapping their networks all interviewees indicated that they found no real surprises by going through the process. One interviewee said that they were already aware of all the issues within their structure, and that the mapping process simply highlighted or reinforced them. Another interviewee said that the process was not at all useful, providing no insights into the network within which they operate. He felt that it just laid out what he had already been thinking, although agreeing that the networks are complex and the interactions are not easy to articulate. One interviewee said that although he found out nothing new by doing the process, he was interested in the information that came out of the process.
All the interviewees were keen to show that they are effective at managing their network, and were generally reluctant to identify areas that may not be working.
Discussion
While institutional barriers are commonly cited as one obstacle to collaborative action, often this is because the network structure is not considered. Analysis of networks can bring out ‘non-obvious constraints and opportunities’ (Kilduff and Tsai 2003). For example, is the network you are connected to densely connected and resistant to change, or sparse and dysfunctional? Is the network extremely hierarchical and centralised, or are there a number of 'cliques' in the network that have to align before action will occur? Is the person you connect to a key broker who might influence change, or marginalised and without power?
More strategic attention to networks can minimise the potentially high transaction costs associated with collaborative action—particularly pertinent for working with service providers (or others with potentially different business objectives/world-views). Utilising the network more efficiently can simply be a matter of trusting individuals to take on broker roles. Brokers are a way of effectively connecting with various resources at different levels within or external to the organisation. Brokers allow for larger networks and access to larger pool of resources. Utilising networks more efficiently may also involve hard decisions about which stakeholders you can afford to maintain 'strong' ties with, or those you can't afford not to have a close relationship with.
This research revealed a tendency in network managers to apply past practices and respond to issues in the network based on past experience, rather than strategically thinking about how to manage the network and effectively work around issues.
Resources of differing values are contained within networks. Not all network connections are of equal importance and the understanding of these differences varied between those involved in the study. The interactions within the network are for the production of benefits (resources) which can enhance the outcome of joint action within the relationship. These resources may; allow the flow of information, influence actors (power), access to economic opportunities (wealth) and status (reinforce identity and recognition) (Lin 1999). Failure to consider the 'resource value of relationships in networks, can lead to network managers 'personalising' network relationships, for example, considering contacts as disruptive or high maintenance, rather than seeing their 'real' value.
Different arrangements of ties can produce different benefits within networks (Kilduff and Tsai 2003). Being able to think strategically where ties are present or absent, where links to better resources may be needed, or where there are multiple redundant linkages (increased transaction costs) can allow considerable attention to be brought to improvements to network function.
Most of us operate effectively, and intuitively, in networks all the time—they are not something we often think consciously about. There has been some work done in the area of learning stages that indicates that the researchers can have difficulty explaining exactly how they actually operate (because it is intuitive). In learning stages this is referred to as 'unconscious competence', where ‘we can do, but don't necessarily know how we do’ (Chapman 2005). A shift in thinking to a position of 'conscious competence', where some thought is given to how to perform a task, is suggested here for more effectively operating in networks.
The reluctance of some interviewees to speak of 'failures' in their networks, or to concede that deliberate attention to their networks might yield insights, also suggests that the interview processes represented a challenge to a competency that is routine or easy (or that interviewees thought they were already skilled enough in). This research suggests that there may be some resistance to making more explicit a process that we often do without thinking. There may also be resistance to making hard decisions about changes in relationships that have developed over time and are familiar.
In summary the key implications for network managers are:
- The strength and type of connection between individuals in the network can effect such things as the way information flows or an individuals' ability to influence change.
- Relationships in networks should be considered in terms of the resources they provide. Personalising network relationships, or focusing only on those resources we 'like' can inhibit our effectiveness in working towards outcomes.
- An understanding of the roles individuals play in the network structure (eg. network brokers) can allow a manager to more successfully utilise the value of strategic positions.
- People build different networks around themselves and vary in their effectiveness as operators. Network managers with a better understanding of the networks around them are often (perceived to be) more successful.
- Strategic management of networks can minimise transaction costs.
- Network management is often intuitive, but in dealing with increasingly complex NRM issues and diverse stakeholders, explicit attention to management of networks is essential.
- This is not easy. This way of thinking is a challenge to a competence that many think is 'second nature'. There will be resistance to making this task more explicit.
Conclusion and Future Directions
Current research suggest that individuals that are better able to understand the networks within which they operate are generally better operators, are more effective, and are viewed more positively by others (Kilduff and Tsai 2003). While the methodology was experimental, and only analysed the perceptions of the network manager (and not the perceptions of his contacts), the findings of this study also suggest that there are differences in the way individuals see their relationships with stakeholders and differences in competencies in network management—particularly when faced with a challenge to 'normal' ways of operating. This suggests that there is significant value for the CRC IF in paying more explicit attention to the networks within which it operates and being more strategic in the way it seeks to collaborate to produce outcomes for the public good.
This way of thinking may be viewed by some as making obvious, or over-complicating, something that is 'second nature' (or just 'common-sense')—after all, humans are inherently social beings who operate in social networks all of the time. However, given the increasing complexity of managing stakeholders for public good outcomes, more deliberate and strategic network analysis may be a process and a skill we cannot afford to ignore.
The case studies presented in this report provide only a small part of the network management picture. Research into networks suggest that individuals' perceptions of network vary considerably. A more comprehensive study of networks would also investigate other actors in a network system to see how they differently perceive the network, their goals, and how this affects the way they interact. This would give more important insights into why some people are better network operators than others, and why conflict sometimes emerges in seemingly simple network relationships.
The next step in this research sub-project, though, will look at some simple network management guidelines. The research will investigate augmenting a standard stakeholder analysis framework with some guiding principles that would allow a smarter understanding of a network relationship, anticipate the source of conflict in relationships, and help identify constraints or opportunities in collaborative relationship with service providers or other partners in working towards NRM outcomes.
Reference list
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Footnotes
1While one of the three interviewees was female, for the sake of maintaining anonymity, all interview subjects will henceforth be refered to as “he" or "him”.
