How to Build a Managed Network | Part 1

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March 13, 2017


Large complicated projects or policies cannot be managed with simple hierarchical structures; they need to employ Network Management principles. The purpose of this article is to provide a simple, “do-it-yourself” guide to building a “Managed Network.”

What is a Managed Network?

Previously, I defined a Managed Network as follows:

“An integrated system of relationships that is managed across formal and informal organizational boundaries with recognized organizing principles and a clear definition of success.”

The first priority among the elements of a managed network is the definition of success. In our example of a Managed Network, it is essential that the groups creating the network have a common purpose and can agree on the definition of what success looks like. The joint effort of the federal Departments of Housing and Urban Development (HUD), Labor, and Veterans Affairs (VA) had a simple compelling purpose: “End veterans’ homelessness.” It was simple to state and easy to measure. The organizations achieved this goal on time and within budget only because all three departments contributed to the effort. HUD had housing but no services. The VA had services but no housing. Labor had job counseling and placement. Together the three agencies were able to place vets in housing, get them services, and refer them to jobs in one day at one place. They did this by signing a compact with a clear strategy and a definition of success: to create a network to end veterans’ homelessness.

Common Purpose        

The first step in building your managed network is to gain agreement from all involved about the common purpose and to be sure that this purpose relates directly to the mission of each participant. The relationship does not need to be identical in either its importance to the mission or its link to agency objectives. In a network designed to eliminate fraudulent financial transactions, the Treasury may have a very large interest while an individual agency may not see the effort as more than a low priority within the full scope of its responsibilities. The importance of the purpose will, however, usually dictate the amount of resources that a particular agency is willing to devote to the task.

The purpose should be simple and easy to measure. In the American Recovery and Reinvestment Act (ARRA), the purposes were stated in its first page:

  • Create and save jobs
  • Help those most harmed by the recession
  • Build new and innovative infrastructure
  • Repair or replace existing infrastructure
  • Help states avoid budget cuts or tax increases

Not all of the more than 20 federal agencies across more than 200 appropriation categories were involved in each of the purposes. However, they could see their work in one of them, and their efforts were measured continuously and reported quarterly from more than 70,000 grantees.

Network Structure and Governance

Recovery Implementation Office Organization Chart

Figure 1, Original Recovery Implementation Office Organization Chart

The need for clarity is ubiquitous throughout the planning of a managed network. A clear organizational structure defining the relationship between parties is no exception. Such clarity of structure helps involved members understand their role in the overall project, understand the position of management, and coordinate with otherwise disparate groups. Figure 1(above) represents the network structure that was used for ARRA. The Recovery Implementation Office (RIO) was tasked with managing the network but had no authority over the members. The participants understood their roles in the structure and responded to the purpose by using their own programs and funds to carry out their work.

Well-defined central management is necessary for the network. There have to be definitions of who is involved and who is not, limits on behavior, the ability for self-determination within rules, and mechanisms for resolution of disputes. This governance can often come from a charter agreed to by participants. When the federal Chief Financial Officers (CFO) Council was created in the early 1990s, its first action was to create a charter among all of the agencies covered by the CFO Act of 1991. This charter specified the rules of the road for the Council and has allowed its successful operation as a self-governing network for more than 20 years.

Trust has been called the “glue” that holds networks together. A primary role of the network managers is to get and give trust. The participants, particularly those at the periphery of the network, need to be able to rely on the messages and good faith of other members. Through a definition of structure and clarity of governance, leaders enable the trust necessary for a network to be successful in attaining its goals. 

Catch the second segment of G. Ed DeSeve’s Do-It-Yourself guide to building a Managed Network, where he discusses implications for leadership and perspectives on resource access.

Fels Institute of Government

The Fels Institute of Government
3814 Walnut St. 
Philadelphia, PA 19104

(215) 898-7326

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