Institutional Power

An institution builds up and expands its power by controlling the flow of information and building a reputation around that information. A university, for example, controls which professors it hires, what research it publishes, and which students it admits and graduates. In making those decisions it builds its brand and attracts various sources of funding.

Another example is Human Rights Watch, which controls how it defines human rights abuses, how to report and document abuses, and how to spread awareness about those abuses. By controlling the flow of information both in and out of the organization it creates a reputation with which it seeks influence and funding. Because there are few funders and many competing civic institutions, each institution must make a case for why it controls the flow of information more effectively than its competitors.

A final example is TED, which controls which speakers it allows on stage, to which social entrepreneurs it grants fellowships, and what content it publishes on its website. By controlling those three outputs of information it builds up a brand which (somehow) convinces a great number of people to spend $6,000 to attend its conference.

The first priority of every institution is its own survival. Which is to say, to expand influence and to increase funding.

Networked Power

On the internet there is no control of the flow of information — anyone can publish anything. If a group of human rights activists does not agree with the information published by Human Rights Watch then they can easily publish their own documents and reports. If self-titled scholars aren’t happy with the classes and research offered by a university (or the exorbitant cost of those classes and journals) they can create their own. And if a group of thinkers and social entrepreneurs think that TED is too elitist and too expensive, they can organize their own event.

Increasingly, sources of information produced by a large distributed network are gaining more influence (which is to say, showing up first in Google) than sources of information produced and controlled by large established institutions.

The secret of institutional power is knowing how to play by the rules; the secret of networked power is knowing as many people and as much information as possible.

Intersections and Blurred Lines

I am often hired and contracted to serve as a bridge between institutions and the network. In reaction to the increasing influence and power of the network, institutions can either compete, cooperate, or co-opt. At this stage in the game most are choosing to cooperate or co-opt.

At the same time loose, networked projects, which began as groups of 10 or 20 people spending some of their spare time on a project of shared interest, have found that they can now compete with large established institutions for funding and influence. But in order to receive funding they must first institutionalize: develop bylaws, form a board of directors, hire lawyers, create a hierarchy of decision-making power. They must control the input and output of information and build a brand around it. Their first priority is to expand influence and increase funding. Their second priority is to avoid getting sued.

Once networks become institutions then new networks emerge, some of which will eventually become institutions themselves.