Development Challenges in Networking/Partnering/Clustering Management

My path through university and career has brought me to the development of information systems and related organizational aspects, the development of business support services at national or governmental, European and international level, international and business support network’s management, all the way to the consulting services in my own company where I am interconnecting all the skills and knowledge I have received so far. I soon, realised that the networking/partnering/clustering approach is of extreme importance for competitiveness, however only with a duly selected form or type of networking/partnering/clustering in relation to a specific problem or vision of a company, and at the same time with the right management which considers both the different aspects of networking/partnering/clustering as well as the trends in the environment, and together with this also introduces suitable methods and tools used among individuals in a selected connection. In practice, numerous combinations are of course established, and the influence alone of these combinations on management or even development of suitable tools has not yet been systematically researched. My experience as well as the interim results of research work, shows that different combinations of the elements evident in the graph presented below (Figure 1) substantially affect the selection of suitable management, and all together affect the final success of any networking/partnering/clustering forms.

These and other questions are hiding in the research model you can see in Figure 1, where I am trying to systematically deal with the topic of networking/partnering/clustering management, and most of all confirm or negate some basic hypotheses, among others:

• every problem in a company can be solved with a suitable model of networking/partnering/clustering and corresponding management approach;
• governmental initiatives do not meet the trends;
• an exchange of experience, knowledge, tools, good practices, training programmes among individual different types of networking/partnering/clustering is necessary to better understand the advantages and weaknesses of individual types, and to improve the existent tools, training programmes and management approaches.

I will use the following graph (Figure 1) as the basis: 

Figure 1: Research Model – Dynamics of Networking/Partnering/Clustering Management

Companies face the issue or search for suitable ways to reach their goals, strategies and visions on a daily basis. Networking/partnering/clustering is without a doubt one of the strategies that can be used in various cases for various purposes. However, a company usually does not possess such knowledge on the appropriate networking/partnering/clustering form or later the implementation. Governmental support usually refers either to clusters or technological platforms, while the other forms are practically not promoted. This is appropriate in certain cases, but from the viewpoint of consultants and companies, this is at the same time also a “trap”, as especially small and medium-sized companies do not decide at the same time or only also for other types of networking/partnering/clustering, which might be even more appropriate for their own cases. I believe that the appropriate form or perhaps more forms of networking/partnering/clustering at the same time, as well as management adapted to this has a truly important influence on the development or even competitiveness of an individual company or a group of connected companies.

I tried to summarize a few types of problems or strategies of companies, and different types of networking/partnering/clustering approaches, which in my opinion significantly contribute to solving evident problems in the left side of the Figure 2.

We also meet terms or perhaps modern strategies connected with networking/partnering/clustering trends, such as crowdsourcing, collaborative leadership and management, flat world, borderless business, open innovation relationship, open leadership, etc. All these terms would not exist if networking/partnering/clustering approaches of different kinds would not have become so essential.

The question for us – consultants, the business support organisations or government is whether we support or train companies appropriately; or whether individual governments offer suitable initiatives for cooperation without too many limitations and beyond known borders. I am convinced not enough. Already the first analysis of governmental initiatives shows that there are many limitations among individual calls for proposals criteria. If I mention only structure and type of partnership, which is usually required, it seems that companies are very limited as regards the possible structure of partnerships. Therefore, my belief is that companies with »innovative« partnerships would gain competitive advantage, does not work here, as partnership’s innovativeness is simply not possible in most cases.

The next question arising in the process of networking/partnering/clustering is connected to various aspects of networking/partnering/clustering, which I classify in general managerial aspects (e.g. legal-formal, financial, HR, etc.), and numerous other aspects, among which are regional, sector-based aspects and the aspects connected with the basic purpose of networking/partnering/clustering, i.e. the interest or economic aspect, innovation aspect, knowledge-sharing aspect, perhaps the aspect of internationalisation, etc. This is actually the central element of connecting, which originates from the purpose of networking/partnering/clustering, also substantially affects the selected networking/partnering/clustering form, networking/partnering/clustering management, the selection of methods and tools, and others.

From the management viewpoint, it is primarily important whether the core purpose of networking/clustering/partnering is an exchange of information only, or also joint product development and marketing. In the first case, the activities attached to a network’s coordinator or manager are more similar to the activities of non-profit and/or public business information centres, and consequently one form of non-profit organisations is perfectly suitable for management of the network; while in the other case, a professional business management and profitable type of network form is required.

If we also analyse the needs for the appropriate management style and the necessary types and levels of management and their profession or the necessary methods and tools with regard to the current phase of the life cycle of networking/partnering/clustering development, or if we also analyse the trends in the environment for all previous elements of the model or trends in relation to the selected combination, we perhaps get the recommended business, organisational and managerial model and the recommended methods and tools.

Especially in the initial phase or the critical development phases, or during the introduction of new projects, facilitating, moderating, strategic thinking, and foresighting, for example, are key values of management team. However, under stable circumstances of the functioning of a network, other characteristics come to the fore. When speaking about network/partnership/cluster management dynamics, a manager with multifunctional skills or even better a multidisciplinary team, where roles of individuals and their importance alternate in the dependence of an individual combination of circumstances attached to an individual period of time, should be sought.

Let me indicate some of the trends which I believe have an important influence on the types of networking/partnering/clustering as well as the management of companies and the management of an individual network/partnership/cluster.

I have used the symbol of pyramid to present the trends, which perfectly symbolizes the natural or universal law of evolution. For the initial basis of reflection, I used the so-called knowledge pyramid “From Data to Wisdom” (left-sided pyramid of the Figure 3 and 4), which is often used in connection with intellectual services, especially with information and knowledge management sciences[1] additionally upgraded and supported with the specific new pyramid models (right-sided inverted pyramids of the Figure 3 and 4) to be in line with the today and future trends. At a basic elementary level, we process data, and immediately after adding some knowledge and experience to this data, we can transform this into a piece of information. Through the process of learning, and experience over time, we transfer from the information society to the knowledge and intelligent society all the way to the society of wisdom. Thus, the natural law of evolution leads us through the phase of learning to wisdom.

What about the complexity and what about our understanding or seeing the dependence or interdependence compared to the source of knowledge (right-sided inverted pyramid of the Figure 3)? We see that in the basic elementary phase, the individual knowledge has provided us with enough competitive advantages for development, but the more our problems become complex and the more we want to approach wisdom, the more we need global knowledge. When accessing such knowledge, we have strong technological support which also helps us transfer from the physical presence into the virtual presence and ICT infrastructure enables us not only to become a society of wisdom but also a virtual society at the same time. In the virtual society, every person is a source of knowledge and ideas, and together we form a global knowledge base which might lead us to a type of wisdom, which we currently have not yet experienced.

How should management adapt to the indicated trends, and do we dispose of the suitable tools supporting the changes in managerial approaches (right-sided inverted pyramid of the Figure 4)? In the basic elementary phase of development, we met the autocratic management, and later information and knowledge management. Nowadays, managerial approaches place social skills to the fore, first of all in the sense of establishing and developing different types of partnerships and cooperation. Many companies have already introduced spirituality as an individual’s value, and social responsibility as well. This will be followed by strategies which will recognise an individual’s value in the sense of their contribution to knowledge as well as development of a company and society. So, will we in a certain phase be mature enough to also share ownership of a product or service with clients or perhaps communities? And will we be mature enough not only to exchange information and knowledge with everyone but also to admit that the goods around us are owned by all of us? Is this connected with the wisdom, which we must reach? And, then will management be necessary at all?

Researching combinations which originate from the research model bring numerous new questions to light, as well as new development challenges of the networking/partnering/clustering management, for example:

• Can we similarly to technology transfers, where we can successfully transfer technology even from one sector into a completely new, seemingly non-complementary sector, develop also a business, organisational or managerial model of networking/partnering/clustering and related methods and tools, which is transferred from one networking/partnering/clustering form into a completely different networking/partnering/clustering form even for a different purpose? So, can we learn something from good or bad management and other practices, good or bad training programmes, or applied methods and tools introduced in strategic alliances, and transfer part or all these experiences, good practices, methods and tools to clusters or perhaps technology platforms, cooperatives, etc. If YES, in which cases and in what way?
• In what way and which trends should be monitored, or which are the trends that most affect the management and methods and tools in a network?
• Which methods and tools will be necessary for successful networking/partnering/clustering of companies or networking/partnering/clustering management in the future, and do potential governmental initiatives for the development of these methods and tools meet the trends?
• In what way should companies, consultants and also those offering governmental or other support to companies be taught that the issue of networking/partnering/clustering is complex, and that it therefore should also be treated this way, and that professional management correspondingly qualified for networking/partnering/clustering management is necessary especially for some individual networking/partnering/clustering forms or perhaps according to an individual combination of elements evident in the Figure 1?

There are many other questions and development challenges arising, yet all probably demand more managerial dynamics than what we are used to. 

Final thoughts to emphasize SMEs dilemmas

Are we aware of the large amount of expressions, connected with networking/partnering/clustering, SMEs encounter on daily basis? Are they clear on the differences between individual forms and concepts, and are we clear on them to such extent that we can undoubtedly advise them on which types of partnering/networking/clustering approaches are the most suitable for them in a certain moment? How to guide them as a business support organisation or consulting company, and what kind of instruments or initiatives should be introduced by the governments and with what purpose?

The media, authors of specialised publications, seminar and event speakers as well as governmental representatives and others guarantee benefits and also competitive advantages to the companies from one or another form of partnering/networking/clustering. During this, we constantly invent new concepts and expressions, although we have not even assimilated the old ones enough.

Based on discussions with companies and solving their daily problems, it is evident that partnering, networking and clustering are individual domains of an individual company. It is difficult to expect from every company that it will gain advantage by connecting into cluster or technology platform. We can recommend to the companies one or the other or even more forms of partnering/networking/clustering depending on their development level and circumstances, their strategy and vision, their management, and in certain cases even the sector and the connected product or service. But we can do much more by training them to:

• self-analyse their own company and environment;
• distinguish between the advantages and weaknesses of one or the other form of partnering/networking/clustering; and
• manage networks in different life cycles of partnering/networking/clustering.

In any case, we must allow them the creativity and innovativeness in their process of partnering/networking/clustering. After all, are not properly the “innovative” partnering/networking/clustering models the ones that have brought advantages to certain individual companies at the most?

[1]Left sided pyramid is in small varieties found in literature since 1989 or even earlier since 1934 based on David Weinberger review – Weinberger, David. (2010). [24.11.2010]. For the purpose of the topic described in the paper some additional inputs to the basic model of knowledge pyramid have been added as well as additional right-sided new pyramid models (see Figure 3 and Figure 4) by the author of this paper to be in line with the today and future trends as well as with the specific topic of this paper discussion.

This paper was originally written for the 13th TCI Annual Global Conference, held in New Delhi, India from 29 Nov – 3 Dec 2010