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.
A very interesting and thought-provoking essay in taxonomy. But, as you suggest, “institutions” and “networks” as defined above don’t and probably can’t exist in pure forms outside the realm of theory. There are only blurred lines.
For instance, “networks” don’t “institutionalise” only through processes of formal incorporation etc. Simply having a history — a set of shared references, memories, solutions to past problems, a shared vocabulary, etc. — turns a “network” into an “institution”. You don’t need a board of directors and a bank account to have an institutional memory. And hierarchies are inevitable, whether formalised or not. “Networks” seem to privilege those members who speak louder, type faster, or have better access to the network’s very medium.
A successful network will grow to the point where it becomes chaotic without institutional procedures and rules. In a network of ten, it’s possible to pay attention to every member. In a network of a hundred, that’s difficult. In a network of a million, it’s impossible. And the loudest of that million don’t necessarily have the most original ideas, the most interesting information, the most radical insights. A thoughtful and self-aware institution, on the other hand, can consciously craft mechanisms to identify and amplify quieter voices that are lost in the hubbub of the network.
The really interesting and useful and difficult task, it seems to me, is to figure out how these different organising principles can complement each other — how to create a hybrid that combines the most efficient qualities of both “institutions” and “networks”.
But of course you already know that!
Homie! You anticipated my part II. (Actually, my part III, but now that you’ve said it better than I could, not sure I’ll make it that far.)
When a institution starts to “control” the flow of its information, it means that they are afraid of such flow of information