Delivering services via network-based partnerships.

Governing by Network: The New Shape of the Public Sector

Published by Brookings Institution Press

www.brookings.edu

2004; 224 pages, $18.95

With increased expectations on government to provide better services with greater efficiency, many organizations are

responding by outsourcing services to private and non-profit entities. But while governments are relying more heavily on networks of public, private, and non-profit organizations, only some have learned how to effectively manage these networks. The transition from direct service provider to generator of public value requires that governments abandon the traditional top-clown bureaucracy in favor of an organization model that lends itself to working with outside entities. Of course, such a model demands a new breed of government employee--one that is skilled in both traditional duties and contract management.

Learning to manage this modern approach to governing is the central message of Governing by Network, a new book by Stephen Goldsmith and William D. Eggers. Using examples from both inside and outside the United States, the authors help the reader understand the attributes of successful and unsuccessful networks and provide lessons learned for government managers who are facing or who will soon face the realities of governing by network. As the authors point out, networking and outsourcing are already common practice in the public sector: however, the scope and complexity of these networks are growing.

The trend toward governing by network has been driven in part by the realization that the one-size-fits-all model of public administration no longer meets the needs of an ever-changing and increasingly complex society. Government managers have come to understand that effective service delivery requires an understanding of the unique needs of constituents. The authors argue that networks remove the roadblocks commonly associated with the vertical hierarchies that characterize most government organizations, thus providing more focused attention to constituent needs across the network.

Goldsmith and Eggers do a nice job of summarizing the advantages and challenges of governing by network. The major advantages include specialization, innovation, speed, flexibility, and increased reach. Networks allow governments to leverage the expertise of "best of breed" providers on behalf of their constituents (specialization). Network partners help governments achieve levels of creativity and continuous improvement that would not be possible otherwise (innovation). Unencumbered by government hierarchies, networks can respond quickly to new challenges, uncertainty, and unforeseen events (speed and flexibility). Finally, networks can help governments overcome scale limitations and connect more broadly to constituents (increased reach).

As many governments have already experienced, expanding networks create a whole new set of challenges for government managers. These include aligning goals, providing oversight, averting communications meltdown, coordinating multiple partners, managing the tension between competition and collaboration, and overcoming data deficiencies and capacity shortages. According to the authors, the most important factors in overcoming these challenges and managing a successful network are choosing partners with shared values and negotiating the roles of network partners in the early stages of contract negotiations.

To effectively manage networks, public administrators will need to develop a new skill set. Networking requires the ability to manage contracts to capture value and achieve goals. For government managers, this means being able to assemble a combination of partners that will produce more positive results per dollar and unit of effort than the government alone. It means addressing incompatible information technology systems and establishing guidelines for information sharing across the network. And finally, it means overcoming the distrust among network partners with very different cultures and values.

In sum, Goldsmith and Eggers provide the following advice: Designing the network requires the creation of a model that is malleable enough to accommodate each partner, dynamic enough to adjust to changing circumstances, but fixed enough in mission to serve the common goal. As key members of the management team, senior finance officials will play an important role in establishing and maintaining networks. The recommendations in this book provide timely and useful advice on how to manage this emerging paradigm of government management.

NAJLA MAMOU is a consultant in GFOA's Research and Consulting Center