One of the essential aspects of a governance system is how information is gathered and shared in an organization. When systems are viewed as hierarchies of reporting relationships, it is easy to assume that information will flow along the paths represented in the organization chart. However, a network approach to understanding governance demonstrates the critical importance of informal lines of communication that exist among members of an organization, based on a variety of criteria, such as similarities in age, educational background, ethnic heritage, hobbies, musical tastes, and many other factors. These criteria not only form the basis for relationships that can reinforce or undermine formal reporting relationships, they also tie organization members to a number of social groups outside the organization – places where essential values and world views are established and maintained.
Back in 1973, Mark Granovetter introduced one of the key insights into the often counter-intuitive way in which networks actually operate. When individuals are seeking new information, Granovetter demonstrated that your immediate family, friends and co-workers are not the best source. Rather, it is people outside your network, who may be linked to people you know through some common element that you do not share. So, for example, if you are looking for a new job, your close associates share a common stock with you, and so are unlikely to be aware of opportunities that you are not aware of. However, perhaps someone they play sports with, for example, may know of potential opportunities in an area outside your sphere of normal activity. This phenomenon is known as the strength of weak ties.
More recently, other research initiatives have shown that in situations where change is rapid and information is complex, utilizing strong ties will actually result in more efficient access to what is new. In some areas (e.g., scientific research, financial markets), it is extremely difficult for any one individual to keep track of everything that is going on, let alone have time to figure out precisely what recent developments might mean to them. Consequently, individuals must rely on the group to collectively monitor and interpret the flow of information. It is the ability to access and build upon a collective stock of knowledge that will provide the opportunity – the strength of strong ties.
If our objective is to establish governance systems that are sustainable, and that facilitate the expansion of capacity to act, then it is important for members of an organization to learn to accept and work with these two seemingly contradictory characteristics of networks. If too much effort is put into solidifying existing ties, a type of collective closed-mindedness may develop. Similarly, if the focus is always outward, then the ability to build a resilient critical mass of knowledge and skills may be jeopardized.