This is a CTP of initiative: Impact Hub London King’s Cross (UK)
In the period of 2010-2011, the global governance changed from being organised through a social franchise by the Hub World company to a structure consisting of an Association of which all Impact Hubs are members (one Hub, one vote), and a Company that is owned by the Association and mandated to provide services to local Impact Hubs. The change of the global structure between 2010 and 2011 is referred to as “the transition” (Bachmann 2014).
This relatively new governance structure of the global Impact Hub network aims to be ‘decentralised’, ‘distributed’ and ‘bottom-up’, where every Impact Hub ‘is accountable for the whole’. The board member of the global IH association (who is also the legal director of IH KC) explains this as follow: “what we’ve done is to create all these mechanisms so that power cannot be concentrated too much in anybody. (…) The board is elected to keep a close eye on the company and then the association keeps an eye on the board. In the end of the day, if we are not doing the job, they can fire us. All the big decisions are made by votes of the association not by the board.” One can talk about shared ownership as one of the key concepts realized through this structure. As put by the co-founder of IH Amsterdam, the IHs are “organised around a sense of shared ownership of the Impact Hub network and trademark. We don’t legally co-own the Association but the Association owns the Company 100%, so we co-own our activities” (Interviewee 2, as quoted in Wittmayer et al. 2015). Shared activities include voting on mandates, governance mechanisms, deciding on the network budgets as well as reviewing the feasibility studies of, and voting on, newly proposed Impact Hubs.
This process of ‘change in global governance’ is discussed as a CTP that matters for the local IH KC for two reasons.
First, the founder of the IH KC was also the founder of the very first Impact Hub Islington (London), as well as the founder and owner of the Hub World company. The latter was set up to help open Hubs in other countries and was subject to contestations (see CTP THE HUB GOES GLOBAL). These culminated in a period of ‘crisis’ at the global network level (2010), which resulted in a change of the global network structure (2011). The global network structure “went from being owned and controlled by one individual, to an association which was owned and controlled by no one individually but by everybody” (Legal director).
Second, the change in ownership of the IH KC (see CTP CHANGE IN OWNERSHIP) went hand in hand with this restructuring of the global network. The legal director explains how the change in IH KC “was tied up with the demise of Hub World” and argues that if the change in ownership had not occurred, not only would IH KC not exist, but “maybe the network wouldn’t be here either”. Thus the change of the global governance went in parallel with the change in local ownership of IH KC, as they both were in hands of the same person.
This CTP can be directly related to the contestation surrounding the previous attempt to design a global structure through the social franchise of Hub World (see CTP HUB GOES GLOBAL). This previous structure let to tensions within the network regarding the kind of governance and ownership structure including organisational and financial model that would fit the values of the Impact Hub.
This preceding global ‘crisis’ and ‘transition’ process was characterised by various events, in particular a ‘global gathering’ in 2010 “where they basically gave birth to the association” (Legal director). This meeting responded to the need to rebuild trust and to address the underlying question of “how would [the Hub] navigate the tension between serving a movement, building a business, and sustaining a network?” (Bachmann 2014).
This meeting let to the establishment of a working group, which explored different organisational models and proposed an alternative structure. This structure included the creation of a global association and the foundation of a limited company, the latter with the mandate “to facilitate collaboration across the Hub network, to provide local support, and to grant licenses to new Hub sites” (Bachmann 2014) (see CONTENT). The new structure also included an element of peer-support, e.g. new initiatives were coupled to recognised Hubs.
From a business perspective, the Hub World company had considerable debt. As outlined by the legal director of IH KC: “What happened was that the association took on Hub World debts. The investors in Hub World agreed to be very patient about the timeline in which their debts would be repaid.” The lead investor of IH KC was also the lead investor for the global network. This person is described by the legal director of the IH KC as a “catalyst for both” the local and global processes.
This CTP and the contestations around which it arose, led to the establishment of regular reviews of the organisation; “currently there is an internal strategy process around ‘Impact Hub 3.0’ looking at what new aspects of the network want to be co-developed” (Co-founder of IH Amsterdam, Interviewee 2 as quoted in Wittmayer et al. 2015).
There are a number of preceding events important for this CTP – together they form the CTP ‘The Hub goes global’. A major event has been a first meeting in London in 2007, where aspirant founders met to exchange best practices and learn about how to set up a Hub. A second related event was the setting up of an interim board for exploring and deciding upon a global governance structure and associated financial model in 2008. The same year also the Hub World company was founded to act as service organisation for the setting up of new Hubs.
In 2010, a meeting near Amsterdam led to the foundation of a working group, which ultimately proposed a new global structure (see CO-PRODUCTION). It did so after having studied different possible organisational forms. A ‘transition council’ was put in place to implement the new model resulting in the creation of the global Hub Association in 2011 (see Wittmayer et al. 2015).
Following the change in global governance, the Hub network was rebranded into ‘Impact Hub’ (see CTP Impact Hub Amsterdam: GLOBAL REBRANDING) in order to emphasise the shared aim for impact (Bachmann 2014, Wittmayer et al. 2015).
In 2014, a global gathering was held in Madrid, discussing ways for more systematic collaboration of individual IH’s (Wittmayer et al. 2015).
This CTP is born out of contestation surrounding the previous attempt to design a global structure through the social franchise of Hub Global (see CTP The Hub goes global). This attempt by the initial founder of the first IH Islington and the IH Kings Cross, firstly led to tensions around this person, as there was a more widely felt impression that he was trying to do too much and lacked the necessary business experience. Secondly, it also led to wider contestations regarding the kind of governance and ownership structure including organisational and financial model that would fit the values of the Impact Hub.
With regard to the actual choice of governance structure, the board member of the IH Association and legal director of IH KC has a pragmatic view on this: “My personal view is that structure doesn’t make things work, people do. (…) Structures are only as good as the people who run them. Any structure can be abused.’’. He contends that: “There was a high degree of alignment what our solution should be. There was a real buying into the not for profit association.”
Proving his point is the fact that also in the new structure non-compliance has become an issue. As outlined by a former board member of the Association: “That has been my main challenge in last years: when recognizing that something is [should] not be part of the network, but still having this family feeling of not being able to punish a brother or sister. We are evolving the idea of protocols for incentives and sanctions for behaviours that should be in our network. The whole rebranding transitioning things was also about this: people just don’t agree, even though it has been voted and approved. So [then] people should comply. So how can you go after them to comply?”. The same person considers it “impossible to get a 100% agreement on big decisions”, and often it is necessary to “try first, rather than ask permission” (Interviewee 17, as quoted in Wittmayer et al. 2015).
The legal director did not foresee the new governance structure: “No, I don’t have that much foresight. I don’t think anyone could have foreseen the future.” However, he continues: “I would say I anticipated the issues, but not the ultimate solution.” Thus, the problems with Hub World were anticipated, as well as the fact that there had to come a global governance structure that was more widely accepted within the network. The actual discontinuation of Hub World and its replacement by some other structure was anticipated by the legal director: “Some of the other hubs in the network were equally frustrated and it was obvious that it was going to break.” Rather than only anticipated, this CTP was worked towards: “basically there was pressure from the other IH’s and the investors for [the founder] to let go of control and ownership”
There is an overall understanding and appreciation of the complexity and delicacy involved in finding and continuing to develop appropriate governance structures. This testifies of a broader reflexive and learning-oriented attitude.
The legal director outlined a specific lesson learned: “There was a big learning point in the end which is about aligning your governance with your mission and purpose.” He continues: “It felt very dissonant that The Hub apparently wanted to make the world a better place with one individual in control and ownership of all the entities for profit.”
As outlined by the co-founder of the IH Amsterdam, one of the learning tasks involved is the uncoupling of different roles and becoming aware of one’s assumption with regard to certain network actors: “There has definitely had to be some uncoupling, of understanding the different roles between the Hub Association board and the Hub Company. (…)There has often been projections onto the Hub Company of being sort of a headquarters when it wasn’t intended to be set up that way. It isn’t. But I think some people come into the network with a strong institutional culture background, just a different paradigm of organizing, which then [gets] projected onto this network” (Interviewee 2, as quoted in Wittmayer et al. 2015).
Other reflections on the governance structure are given by a former board member of the Association: “It is hard to keep all these ‘crazy’ entrepreneurs aligned. (…) We want to avoid franchise but [we are] still replicating programs that work from one place to another. [It’s a matter of] finding the right balance. Being together as a network, growing as we’ve done and keeping the relationships, trust and making sure the values are still based on making the network happen, I think that’s great. We need to find out now how to create this new infrastructure, in terms of protocols that work for 100-200 Hubs envisioned for the future. We are very relationship-based in terms of how people develop trust. We want to keep that and build on that and scale while avoiding misalignment. (…) We are being co-owners and as such take biggest decisions together. We are balancing this with becoming a bureaucratic system: finding ideal balance between participation and agility. As entrepreneurs, we don’t want something that is too much participatory, thus taking too long for quick decisions to be taken. But if it’s something we don’t build together, it won’t happen anyway if people feel strongly about it. When you’re searching for it, it’s not something that’s ready and done. We’re constantly evolving. The main point is always how to balance these two. Make sure [that] the people taking decisions are actually qualified for that. Need some kind of technocrats, people with expertise to make decision. We’re exploring the latest prototype, and the next board will take that forward: Liquid Democracy” (Interviewee 17, as quoted in Wittmayer et al. 2015).
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