How accurately does your website communicate to the world what your organization is about? Your website is the place where people gain a first impression of your organization. It also provides a view of how you work within your industry value network. After all – your website is your company’s business card.

It is critical for organizations to accurately mirror their value network on their website in order to ensure a coherent and effective interface with the world. Website designers, however, are seldom tasked with designing a website to mirror the organizational value network or business ecosystem. Most often they are tasked with creating a compelling visual design – which may distort the actual message that needs to be projected.

A Value Network Analysis (VNA) can quickly reveal how accurately your Internet presence conveys the purpose of your company - from brand and identity through products and services, to Web 2.0 communities and support, and even to the level of semantic web elements.

When working with companies we frequently evaluate their website to see how well it communicates their role and business model in relation to the larger business ecosystem. Few websites present an accurate perspective or convey the kinds of offerings that entice visitors to interact. Indeed most websites end up communicating a star-shaped value network with the organization in the middle and a few standard roles (e.g., customers, suppliers, partners, etc.) around the edges. Interactions, if described at all, are vague or bland with undifferentiated exchanges that show little that is different from their competitors.

Using the ValueNetworks.com application, organizations can not only capture the way they really work (as a "strategy blueprint"), but can also compare that to the way their website is structured. Most importantly they can use this same approach to analyze competitors’ websites and compare messages and offerings from a network perspective. This provides a capability to benchmark against any number of well designed websites that communicate value networks. A website developer can see new opportunities to create a compelling, differentiated, inclusive, and authentic Internet presence.

Data required for using the ValueNetworks.com application to support website design is (a) the strategy map of the organization, (b) the value networks shown by the company website, including a webcrawl network map of linked URLS (c) the value networks of competing companies or organizations, and (d) sample value networks of websites – which are available within the application.

The value network perspective is especially valuable for website design agencies that need to either sell website design concepts to potential customers or wish to support existing customers in reinventing themselves.

Other topics in this series:

Here is the latest from complexity expert and network enthusiast Dave Snowden on the S-Curve of adoption of business management practices. This popped up recently in a blog on his Cognitive Edge website.

Here is another favorite diagram from Dave. When we did a workshop together in Brisbane Australia a couple of years back for the Society for Organizational Learning we were reflecting on the rising popularity of of nework analysis. Dave is also well-known for the Cynefin Framework. Putting our heads together at the time, we came up with the model below that helps show why network thinking is so critical.

Very few of us live in a world of simple order these days. We and our companies are dealing mostly with very complicated activites and complex environments. Networks are the most viable way of organizing and making sense in the top two quadrants of the framework. Even in chaotic conditions, such as after natural disasters people can be locally effective through networks.

For more on Dave Snowden and Cognitive Edge:

It's been a long time coming but network analysis is coming on strong heading for mainstream adoption. This is great news for people who have been building out competencies, tools, and technologies to support network analysis.

Gartner, Inc. has examined the maturity of 1,650 technologies and trends in 79 technology, topic, and industry areas, and these findings have been published in “Gartner’s Hype Cycle Special Report for 2009." Each Hype Cycle provides a snapshot of key technologies and trends in a specific technology, topic, geographic region, or industry domain.

The Gartner hype cycle is very well known as a way to assess and track trends. New technologies initially go through a sharp "Peak of Inflated Expectations" followed by a deep "Trough of Disillusionment." The curve of serious adoption then follows with a gentler rise in the "Slope of Enlightment" as people begin to adopt the technology and achieve business results. Eventually the technology peaks out again at a "Plateau of Productivity" where there is wide adoption and the technology matures.

We noticed a definite shift about 3 years ago when network analysis began that upward climb. It was strongly heralded by Rob Cross's very popular book on The Power of Social Networks. 

In our own work we, experienced the shift as a sharp increase in the number of major value network projects popping up at Blue Chip companies such as Cisco Systems, Telenor, and The Boeing Company. We also experienced a significant rise in numbers in workshops and events, and increasing inquiries about applications to support network analysis, which is why we launched ValueNetworks.com in late 2007.

This is a solid, inevitable, and accelerating trend. Even the recession has not blunted the interest - it has actually given the movement an additional boost as people become disillusioned with old ways of thinking about business and seek fresh perspectives.  

There is a quick summary of the report available on the Gartner Website and there is also a pricy but very interesting full report.

Project management is of course a highly developed science and most project managers are able to create relatively detailed project plans for project monitoring purposes. Tools such as Microsoft® Project® extend regular task planning to resource management and server based collaboration functionality, such as integration with Microsoft® Outlook®.

Three issues plague project managers however and ValueNetworks.com offers support in mitigating the risks involved. The first issue is the explicit monitoring and quality control of intangible deliverables, such as support actions and key information. The second issue is determining the extent that collaboration actually happens, and the third is ensuring that the project management methodology is stringently applied.

Project plans typically include a significant numbers of tasks that need to be completed and these tasks are predominantly of tangible nature, for example "Create use case." A skilled project manager will include an embedded communication plan, in items such as "Conduct milestone meeting," or "Distribute weekly report." What is seldom if ever considered is focusing tasks explicitly on INTANGIBLE tasks and deliverables, such as "Review accuracy of report," or "Validate quality of widget." A value network map of the project includes both tangible and intangible deliverables where specific transactions are identified and can be included in the project plan. The ValueNetworks.com Excel®-based template can be used for not only gathering the information for the project value network, but also for feeding other project management tools such as Microsoft Project.

This approach also moves collaboration from a nice idea to a managed activity. Meeting planning can be enhanced for more accurate tracking of who is participating in meetings or other communication channels to ensure appropriate knowledge transfers. Participation by role identity is also made more transparent and accountable as a first step toward collaboration effectiveness.

Finally the ValueNetworks.com application can help make sure that compliance is maintained in respect to the chosen project management methodology, by importing value network information from project management tools and comparing it against value network benchmarks in respect to task management and participation.

Data required for using the ValueNetworks.com application effectively is based on importing and exporting data from the project management tool, the creation of a reliable project management value network (e.g., from PMI or Prince 2 Models), the collaboration tool of choice (e.g, Microsoft® Outlook® or SharePoint®), and the relevant directory of participants. Additional sources of data can be found in project management modules of ERP solutions and other document repositories.

If you have additional questions or wish more information please contact info@valuenetworks.com.

Other topics in this series: 

Writing business plans has become a science and there are a plethora of books, seminars, and courses (even graduate and doctoral level) that address the mechanics of writing a business plan. Many business plans even include detailed five year forecasts that everyone knows are utterly unreliable and serve only to check whether the writers are able to put together a coherent plan that mirrors classical organizational models - "Management 101" so to speak.

Investors however are primarily interested in understanding the probability of the venture succeeding, and  whether it is more attractive than other investment opportunities. ValueNetworks.com supports business plan writers and investors in addressing these issues by (a) determining whether the ecosystem of the planned venture is resilient, flexible and encompassing enough to ensure success, and (b) accurately identifying the value that will be created by the venture within the ecosystem of relevance.

In respect to point (a) the greatest benefit of a Value Network Analysis (VNA) is being able to benchmark the value network of the business venture with the historical data of other ventures that have been funded. By comparing the venture against other successful ones in respect to value network indicators, the investor gains an understanding of the extent that patterns for success are being duplicated. The important point here is that these patterns are largely independent of the specific context of the venture. Depending on the phase of the venture the roles, participants, interactions and sequences all show typical structures of maturity and supportability.

Regarding point (b) the value network shows the key tangible and intangible deliverables and transactions of the venture ecosystem. Mapping these allows savvy investors to determine the appropriate value creation profiles and patterns. They can then compare the ideal patterns to the explicit messages of the venture candidate and the expectations of the investors. Many funded organizations, for example, bet their success on innovations that generate different value profiles than expected by the various stakeholders. Making this transparent is the first step toward synchronizing the governance of investments with an appropriate operational focus.

Data required for the ValueNetworks.com application derives from manual website analyses, a qualitative evaluation of business plan documentation and the comparative evaluation of the proposed value network with benchmark data. Additional potential sources of information include industry statistics and success stories of other ventures. Data is aggregated either manually and then imported into the application, or fed directly into the application in a sequenced aggregation process. Generating value creation thumbprints is based on taxonomies of deliverables integrated into the ValueNetworks.com data model. Investors would be well served including a venture value network and value creation profile as a mandatory component of business plans.

If you have questions or wish more information please contact us at info@valuenetworks.com.

Other topics in this series:

In increasingly dynamic business environments business development managers must be able to identify and address new opportunities quickly and effectively. Business environments can best be understood as ecosystems consisting of interacting roles and exchanges focused on an industry segment.

The key challenge for business development managers from an ecosystem perspective are identifying a) organizations that would benefit from a tighter integration into the system, and b) "white spaces" in the system that will give rise to new offerings that compete with or complement their own organization´s products and/or services. In both cases ValueNetworks.com supports identifying and leveraging such opportunities, when combined with webcrawl technologies and organizational information available in online databases.

The basic approach is to map industry connections through URL connections. Then each organization in that network is assigned to one or more roles that they play in the industry. This forms the basis for mapping the ecosystem.

The website descriptions of the identified organizations are then translated into value network maps in order to identify tangible and intangible deliverables the organizations claim they produce. This information is then used to enhance the industry-level value network map. The ValueNetworks.com application is then used to identify network characteristics and assess factors such as role population or diffusion paths. Finally the extent that the organization serves other network participants and roles is evaluated. If, for example, the organization is selling software, then the users of the software are identified and mapped into roles.

Based on the above mapping and analysis the business development manager is now in a position to identify exactly how other organizations are interacting with their customers. This provides a vital context for approaching them with proposals to integrate more tightly with the ecosystem by using their software or other products and then integrating across organizational boundaries with other players. In the technology area this begins a process of standardizing the IS landscape of the ecosystem resulting in faster and more accurate operation of vertical and horizontal supply chains in the system.

Business development managers are also able to identify "white spaces" in the network that indicate where no explicit activity is occurring in the ecosystem. These spaces offer possibilities (or risks) for a new service or product offering that would "short-circuit" existing interactions to the detriment of the organizations involved. Business developers can also better assess relationships that are “at risk” due to minimal intangible interactions. By moving to strengthen the existing relationships, the risk of radical disruptions of the ecosystem is minimized.

Data required to monitor such ecosystems is typically obtained from a) the input of webcrawl tools (e.g., Issuecrawler.net), b) the role mapping of organizations based upon either evaluating their website or mapping to industry categorizations (e.g., I-Metrix), c) current customer information as found in internal CRM systems (e.g., Salesforce.com) and d) from historical industry performance data. This information is aggregated based on the ValueNetworks.com data model and then provided to business developers for:

·         gaining insights into market dynamics

·         identifying business development opportunities

·         extending the penetration of products and services into horizontal and vertical supply chains

·         developing explicit sales and branding strategies

·         understanding what alliances (potentially) exist in an ecosystem.

Three final perspectives of importance emerge from specifically applying value network indicators and metrics. Value network indicators provide the ability to benchmark industries over time to understand network behaviors and cycles, to predict the impact of outlying influencers such as regulators on the network, and to justify the development of unique value propositions for business development that are centered around "integration" of the ecosystem based on a whole systems view.

Data aggregation can be completed outside the ValueNetworks.com application in tools such as Microsoft® Access® or SQL, however due to the large amounts of data required we suggest using Oracle® database solutions such as those driving the ValueNetworks.com solution. A certain amount of data cleansing is required, however this can be easily accomplished using ValueNetworks.com conform widgets.

A good analogy for the above considerations is an online traffic report that constantly monitors the conditions of traffic in a metropolitan area. The ValueNetworks.com application can be configured to create a similar custom traffic report for your own unique business ecosystem.

If you have questions or wish further information please contact us at info@valuenetworks.com.

Other topics in this series:

The key focus of sales managers is sales generation whether of initial or recurrent nature. In both cases there are standard patterns of interaction among stakeholders that will lead to success. Deviations from these patterns, which consist of certain dynamics and types of exchanges, will usually indicate a lowered probability of closing a sale, especially in a complex sales cycle. The key questions for sales managers are therefore:

• Who are the stakeholders of the sales process?
• What pattern of interaction repeats itself in successful sales engagements?
• Are we deviating from successful interaction patterns?
• How can we improve compliance to proven methods and processes?

The ValueNetworks.com application can help answer these three questions based upon the initial identification of stakeholders and successful interaction patterns through five simple steps:

1. MAP The Value Network. Experienced salespeople identify the key roles and interactions and map the value network as a Strategy Blueprint for successful sales.

2. DEFINE the needed support. This Strategy Blueprint is then used to configure a supporting process (Business Blueprint) and then an enabling workflow system through a derived technical configuration (Technical Blueprint).

3. CONFIGURE the intelligence. Flatfile queries on the workflow system allow for importing of performance data into the ValueNetworks.com application for value network and collaborative network analysis.

3. MONITOR performance. Comparison of performance data to benchmark data defined previously can occur manually or through configuration of notification systems that trigger email or SMS functionalities in existing communication tools.

4. OPTIMIZE performance. Continual monitoring reveals opportunities to align actual performance with the desired performance.

Typically the first and often the second step are accomplished through workshops involving experienced sales people and support staff. Data required by ValueNetworks.com for the benchmark originates from the strategy workshop where success stories are used to design the ideal state. Performance data is then gathered from the properly configured workflow system.

Practically speaking a first step after the workshop is to migrate the strategy blueprint into a business blueprint in BPEL format, for example. This is then imported into a workflow system and calibrated appropriately. The BPEL format is important since it can be expected that workflow will need to be adjusted regularly to accommodate dynamic sales environments. Inside corporate firewalls the use of tools such as Microsoft SharePoint® usually allow for the fastest and most flexible approach. In cross-organizational environments tools such as Induct® or JComm1® are recommended. Following the installation of process and technology the relevant training of stakeholders and salespeople is of course needed as well.

In this manner the competence is created to scale successful interaction patterns quickly and with high user acceptance throughout the sales organization.

If you have questions or wish for more information please contact us at info@valuenetworks.com.

Other topics in this series: 

A key activity for customer support centers is resolving customer inquiries. While many inquiries are resolved during the first call, others are entered in ticketing systems such as HP OpenView® for handling by other support levels. A typical scenario has a customer calling with a technical questions, first level support not being able to resolve the issue, entering the issue into a ticketing system and then assigning it manually or automatically to a second level support team. The second level support team resolves the issue and returns it to the first level support which then informs the customer of the resolution and closes the ticket. In some organizations third and fourth level support levels exist.

The ValueNetworks.com application can be configured with support center data to help resolve three key issues that arise when first level support opens and assigns a ticket.

1.  It can enable automated assignment of a ticket to a second level team and individual that will resolve the ticket fastest based on historical performance, availability of staff and competence of staff.

2. It can help predict whether or not a ticket will be completed within service level requirements.

3.  It can help re-assign teams and individuals during the resolution process to maintain service level requirements.

While ticketing tools will commonly allow for transparency regarding which team is currently active, ValueNetworks.com also identifies individuals and key roles within that team to answer four basic questions:

1. Which team and which individual should be handling a ticket to allow for on-time ticket resolution?

2. Which team and individual is currently responsible for the ticket?

3. Is a ticket resolution within service level requirements?

4. Which team and individual should handle the ticket next?

The above is especially relevant for multiple support levels operating in a "follow the sun" process.

Data required for configuring the ValueNetworks.com application originates from a) standard queries on the ticketing tool for case information, b) the business warehouse for statistical performance information, c) the organizational management structure found in the ticketing tool or collaboration tools, and d) calendaring tools. Data is aggregated by ValueNetworks.com and then used to provide on-demand insights and to support triggering notification systems predicting deviance from service level agreements. Additional information sources of relevance can be accessed from the service level agreement database, internal time tracking and cost tracking systems.

Implementation of the above usually involves reconfiguring ticketing tool case status, organizational measures to ensure discipline in the use of calendering tools, and use of regression analysis to identify thresholds for triggering notification systems.

Practically speaking a first step is taken by manually aggregating the needed data daily via ODBC driven MS Access files, exporting the reports to ValueNetworks.com and generating a dashboard of tickets which are flagged as likely predicted to fail service level agreement requirements, thus enabling faster and better interventions to stay on track.

If you have questions or wish more information please contact us at info@valuenetworks.com.

Related Topics and other topics in this series:

ValueNetworks.com is pleased to announce that they are partnering with The Insight Exchange for the Future of Influence 2009 Event on August 31st in San Francisco and September 1st in Sydney. The event features live video links betweent the two venues. Click on the link below for full details and registration.

Summit Overview

After three extremely successful years exploring the Future of Media, the conversation is moving on to influence. Because influence is the future of media.

Future of Influence Summit 2009 will cover:

• Influence as the new center of the marketing world

• The power of influence in content and publishing

• The shape of the emerging reputation economy

The Summit will build on its history of world-leading innovation in conference format, using video links, conversation, participation and rich content formats to uncover practical insights into the power of influence. Pragmatic case studies will provide valuable take-aways for attendees.

One of the most powerful benefits of value network modeling is the ability to monitor, predict and influence performance. Metrics are made simple with the Comprehensive Reports function in the ValueNetwork.com application. In addition to Animations and Detailed Visuals, indicator reports are generated for the Standard Value Network (Role view) and the Collaborative Value Network (Participant view). The example and some text below are drawn from a Standard Value Network (Role-based) Report, using the example of scheduling procedures in a health care organization. For other blogs in this series see the links at the end or simply search "Indicators and Metrics." 

Reciprocity

Reciprocity is one of the key questions addressed in an Exchange Analysis, which is an assessment of value dynamics throughout the whole network. An Exchange Analysis focuses on finding overall patterns in the network, and surfaces key issues – such as health, robustness, and resilience. The questions it addresses are grounded in systems thinking, classic network analysis, intangible asset management and living systems theory.

What to look for

Imbalances: Is there an appropriate balance of Tangible/Intangible inputs and outputs for different Roles and in the network as a whole?

Overburdened Roles and Participants: Are there particular Roles or Participants that are unduly carrying the burden of network interactions where disruption could put the network at risk?

Work arounds: Are there patterns of intangibles that might indicate something is not working in the formal processes or a Role is not functioning as effectively as it could?

Value Reciprocity: Are there reciprocal value relationships between Roles?

Disconnects: Are there missing or dead links? Where does a value flow get stuck or break down? Where does a Role fail to transform inputs to appropriate outputs?

Interdependencies: What are the structural interdependencies?

Useful Questions

1. How does value gained by one Role extend to or “flow” to other Roles or strategic partners within the organization?

Do the flows show that value gained by one Role actually accrues value for the company as a whole?

If a group of Roles belongs to the same organizational entity, then value that is gained by one Role from an external stakeholder should accrue both directly to that Role and either directly or indirectly to other Roles in that organization. When value gained by one Role is not accrued efficiently to its internal and external organizational partners, then value gain is diminished.

2. What does the pattern of interaction suggest about the level of trust in the network?

a.    What norms of behavior are revealed in these exchange patterns?

b.    What does the intangible activity indicate about transparency and trust?

The ratio of tangible to intangible transactions, or the depth and quality of knowledge flows, can be an indicator of trust.

3. Is one type of value exchange more dominant than another?

a.    Do Tangible exchanges significantly outnumber Intangibles? (Or the other way around?)

b.    If so, why do you think that is?

c.    What would the implications be if it were different?

The dominance of a particular type of exchange may be an indicator of assumptions about value that drive system behaviors. Value exchange patterns also may point to places there might be structural or behavioral constraints on maximizing value. A high number of Intangible exchanges is not always a positive sign. It could indicate that people are interacting informally to try to manage infrastructure problems or unhelpful behaviors. Some Intangible interactions are actually “work-arounds” where something is broken or a Role is not being well executed.

4. Are there places where people need to be engaged in exchanges but are not?

Every interaction is an opportunity to create value or build relationship.

5. How deeply enmeshed and interdependent are the Roles?

The number, type, and frequency of interactions are indicators of the degree of structural coupling between a pair of Roles and may indicate the quality of a relationship.

6. Is every participant both contributing and receiving value from the network as a whole?

a.    Which Roles are value “sinks” that absorb value but contribute little?

b.    Which Roles contribute more value than they receive? Is that a risk?

If people feel they are not gaining positive value from the network they are more likely to withdraw.

7. Does it appear that some Roles are gaining value at the expense of another? If so, what are the implications?

If Participants in the network feel a particular Role or Participant is behaving unfairly, they are more likely to reconfigure Roles and interactions in ways that diminish that Participant’s place in the network – or alter the value interactions.

8. What do the patterns of reciprocity tell you about this network?

A consistent pattern of reciprocity in exchanges between Roles is an indicator of healthy value flows and whole-system optimization.

9. Are there bottlenecks, constraints, or instability in the flow of value?

Network patterns can be affected by control mechanisms and decision making. When one Role unduly constrains or controls Transactions it is an indicator of structural or behavioral constraints impeding value flow. Missing links, dead links, and broken value flows are indicators of missed opportunities for maximizing value. Sequencing transactions as they occur in the overall activity helps reveal missing links and poorly configured value paths.

10. Does every action elicit a response?

Every action either triggers another Transaction or has an internal impact on the Receiver. If an action does not trigger a positive value-creating response or generate additional value interactions, one needs to ask why is that activity happening? Is it really necessary? Is there a better way to utilize assets?

Useful Reciprocity indicators

Classic network analysis often looks at Reciprocity - the extent to which ties are reciprocated between Roles or Participants. Some theorists feel that asymmetric (unreciprocated) ties may be unstable. A network that has a predominance of reciprocated ties over asymmetric connections may be a more "equal" or "stable" network than one with a predominance of asymmetric connections. A lack of reciprocity sometimes indicates there is a more hierarchical structure. The following examples are from the same example of scheduling procedures in a health care organization as the other topics in this series

All transactions: Of all pairs of Roles that have any connection 53.33 % of the pairs have a reciprocated connection.

Intangible transactions: Of all pairs of Roles that have any connection, 44.44 % of the pairs have a intangible reciprocated connection.

Tangible transactions: Of all pairs of Roles that have any connection, 46.15 % of the pairs have a tangible reciprocated connection.

Other topics on this series:

One of the most powerful benefits of value network modeling is the ability to monitor, predict and influence performance. Metrics are made simple with the Comprehensive Reports function in the ValueNetwork.com application. In addition to Animations and Detailed Visuals, indicator reports are generated for the Standard Value Network (Role view) and the Collaborative Value Network (Participant view). The text and charts below are drawn from a Standard Value Network (Role-based) Report, using the example of scheduling procedures in a health care organization. For other blogs in this series see the links at the end or simply search "Indicators and Metrics."

Channel Management

The Channel profiles provide a way to consider the effectiveness of different delivery mechanisms for specificDeliverables. For example, some companies rely heavily on face-to-face meetings, where video conferencing might be a more effective way to work. Other companies rely on technology and systems for delivering information or automating provisioning.

In the application it is possible to select the Channel for the transaction from the appropriate drop-down list. The channel is the medium or mechanism used to transport the deliverable.

The default choices for Channels are:

•      Phone conferencing
•      Web conferencing
•      Face to face meetings
•      Virtual team workspace
•      Instant messaging
•      Shared applications
•      Shared drivers/directories
•      Physical Transport
•      Wiki
•      Blog
•      Other

The three charts below are generated in the Reports and show the distribution of different channels viewed by All Transactions, Intangible Transactions only, and finally Tangible Transactions. These charts can be used to develop technology and communication strategies to better support transactions in the value network.

It is also helpful to look at channel usage by role. In a value network technologies are enablers to support the transport of deliverables or to enable role execution. Every technology selection should have a positive impact on either the speed or quality of a transaction or role execution - ideally both. The first step in such an evaluation is to understand channel support from both the transaction perspective (as above) and role execution as in these charts.

 Other topics in this series:

One of the most powerful benefits of value network modeling is the ability to monitor, predict and influence performance. Metrics are made simple with the Comprehensive Reports function in the ValueNetwork.com application. In addition to Animations and Detailed Visuals, indicator reports are generated for the Standard Value Network (Role view) and the Collaborative Value Network (Participant view). The text and charts below are drawn from a Standard Value Network (Role-based) Report, using the example of scheduling procedures in a health care organization. For other blogs in this series see the links at the end or simply search "Indicators and Metrics." 

Optimizing Value Flows

Value flow optimization is a way of expanding a process perspective from a linear way of thinking to a complex adaptive systems approach. Value flow optimization is different from a classic process engineering approach. Process engineering strives to drive out variation and to standardize business processes. However, in complex environments variation is a given. It is not only a given – it is desirable in order to adapt to changing conditions and support the continuous innovation required for competitive advantage.

The goal in optimizing a value network is to support effective value flows or workflows where there are many different possible pathways. For example a large heavy shipping port was increasing safety and security inspections from two to five per day. Inspecting ships is very complicated. There are many regulatory and safety compliance requirements where there must be tightly controlled documentation processes. At the same time, different ship models and situations have different types of vulnerabilities and require different kinds of responses from maintenance crews.

Inspecting two ships at once could be managed with process engineering approaches, although it would be very challenging. However, with five per day – each with unique starting conditions and challenges – the process approach was simply too slow and cumbersome. VNA was used to define the roles and interactions that would provide for the greatest consistency while allowing the necessary variation and flexibility. Value flow optimization provided a new way for the shipyard to think about how ships moved through the inspection activity.

How to do it

From a completed value network map run different scenarios to help define the different possible pathways a workpackage such as a ship, a product, or a service delivery might travel. Then use the scenarios to address different issues that affect the function of each of these pathways. Issues can relate to Role execution, Transaction speed or channels, quality or value of Deliverables, and how different flows intersect or work together.

Note that all of these different flows could be addressed separately using process engineering approaches and structured technology support systems. However, the difficulty is that those methods are almost always conducted from the perspective of a single Role or small group of Roles – or a single isolated process – and almost never from a “whole system” or “whole network” perspective. Further, looking at flows as separate activities misses the interdependencies between them and the conflicting resource demands that might result. It is too easy to overlook critical hand-offs between Roles or needless redundancies.

Transaction Speed

Transaction speed is an obvious indicator to consider when thinking about optimizing value flows. The first step in determining speed is to identify the Sequence of transactions. The simply means identifying what happens first in a typical scenario, then what happens sequentially until the entire story of the value network unfolds. Then use the drop down list in the Excel-based template for uploading datato assign a speed for each transaction. If both sequence step and speed are filled out in the data upload then the PowerPoint Report generated by the ValueNetworks.com application will include Animations of the value network.

Transaction speed can refer to the actual transit time of the Deliverable. Used this way it is useful compare speed with the transport Channel profile.“wait time” for a Role to complete and send the Deliverable. This approach is useful to identify where there may be Roles that could be better supported with resources or improved processes for faster execution.

Transaction speed can also refer to how slow or fast the Deliverable is executed and released by the Role. Used this way it would more represent "wait time for a Role to complete and send the Deliverable. This approach is useful to identify where there may be Roles that could be better supported with resources or improved processes for faster execution.

Calculate the overall speed of the flows by averaging the speed of all Transactions in the flow. Identify the “slow-downs” and do a root cause analysis to identify what is impeding the flow.The Transaction speed indicator is helpful in spotting network bottlenecks. In the ValueNetworks.com application speed is calculated by giving the default ratings of: Fast = 1, Medium = 2 and Slow = 3. A sample report is below:

Average Speed of All Transactions:

Total Number of Transactions: 45      Average Speed: 1.84

Average Speed of Intangible Transactions:

Total Number of Transactions: 14     Average Speed: 1.79

Average Speed of Tangible Transactions:

Total Number of Transactions: 31     Average Speed 1.87

Other VNA indicators to improve value flow performance

SAP is one of the most enthusiastic proponents of networked business models and sponsors over 40 industry value networks. Below is an excerpt from their recent article Built to Adapt authored by Chakib Bouhdary, Chief Value Officer of Global Field Operations, SAP AG

The rise in consumer power, facilitated by easy access to capital and the Internet, is converging with technology to drive rapid commoditization, necessitating the continuous assessment, reinvention, and innovation of business models at greater speeds. But the task of retooling and transforming business processes is rife with formidable challenges. The answer to any successful business transformation is the establishment of open communication channels woven throughout the firm and its network of partners, making it a hotbed of inventive ideas. An organizational structure must facilitate and nurture those ideas so they can quickly find their way to the top and become strategic assets.

Information technology is breaking boundaries yet again. Consider this reality: According to Wireless Intelligence, the mobile data service of the GSM Association, there are more than 3.5 billion mobile phones in use worldwide, and the lion’s share of these handheld devices perform highly specialized tasks that required the most powerful supercomputers less than a quarter century ago. The power that consumers possess in the palm of their hands is unprecedented. Hyper-convergence such as this means that markets are more volatile than ever, moving at exceptional speeds.

To succeed in this environment, it’s important to recognize the power of business networks. Enterprises are rapidly adopting collaborative networks—which drive innovation by bringing together companies, their partners, and customers—and coordinated networks, which use automated processes to help organizations quickly and efficiently scale up operations profitably. Collaboration through such technology can reap significant results. For example, Harley-Davidson, working through its dealer network, has created remarkable brand strength, ranking in the top 50 strongest global brands. But the company needed better access to customer information to streamline the process of moving a potential customerfrom merely dreaming about biking to actually owning one. Harley-Davidson achieved this, in part, by investing in owner loyalty groups such as the Harley-Davidson Owners Group (HOG). The company also implemented SAP’s customer relationship management (CRM) system so that its dealership sales force could harness the power of its business and customer networks to provide more consumer intimacy and drive long-term relationships.

A Maturity Model

1. Extend business access.

2. Focus on diferentiation.

Writing for The Web Brainstorm Magazine South Africa Laurie Elliott notes that company and industry competitiveness starts with knowing the full value, tangible and intangible, a company brings. Then, developing the space, including strategic networks and infrastructure to deliver and leverage that value.

It happened one Friday morning in 1991, just before Christmas.  My boss eyed me as I arrived at work, and called me into his office.  I found myself staring at a letter outlining my “package”. As my boss was escorting me out of the building, there was so much I wanted to tell him about what I thought was important to keep doing, and stop doing in the group I managed, but no time.  Since then, I’ve been on the other side of the desk, and much the same thing happens – management huddles behind closed doors, decides that cuts must be made, and who will get the axe.

What’s wrong with this picture? The way we’ve been accustomed to make these decisions is that the managers are the brains, and the workers are the muscle. In a knowledge economy, the workers often know more than the management about what makes the organization tick – so is there a better way?

A big part of the problem, I’m convinced, is that we “visualize” our organizations in the wrong way. We draw organization charts that have no customers, we build process charts that don’t even have people at all.  This reflects the heritage of our industrial, “machine” model of organization.  I’ve often thought that management fiats such as “Each department must cut 15% of its budget” are rather like losing weight by amputating equal parts of one’s legs, arms and head.  At least it’s fair, right?

W. Edwards Deming once said “All models are wrong, but some are useful.”  The top-down, command and control visualization of organizations is no longer useful. It would be more accurate today to say that an organization is a complex network of conversations, relationships, and exchanges of value.  In a business organization, the objective is to optimize the value-producing capacity of this network.

Value Network Analysis  (VNA) is an emerging and highly useful method for visualizing your business. A VNA can include not only your internal resources but your entire supply chain, and your relationships with customers. Sophisticated mathematical network analysis techniques underlie the model.  And, at the same time, once the network is mapped, it can be intuitively obvious where there are problems - bottlenecks, role conflicts, redundant efforts – and where in the organization value is truly being created.

Conventional thinking imagines the organization as a machine.  If something’s not working, we optimize the parts - identify which ones are broken and fix, eliminate, or replace them.  If, on the other hand, you see your organization as a living system, the objective is to optimize the relationships among the parts.  Looked at this way, there are many more choices that can be considered when an organization is forced to reduce costs.

Dan Montgomery has a 30 year background as a management consultant and executive coach, and as a manager, counsellor, and trainer. He is founder of Resilient Strategies

One of the most powerful benefits of value network modeling is the ability to monitor, predict and influence performance. Metrics are made simple with the Comprehensive Reports function in the ValueNetwork.com application. In addition to Animations and Detailed Visuals, indicator reports are generated for the Standard Value Network (Role view) and the Collaborative Value Network (Participant view). The text and charts below are drawn from a Standard Value Network (Role-based) Report, using the example of scheduling procedures in a health care organization. For other blogs in this series see the links at the end or simply search "Indicators and Metrics."

Brand Management and Perceived Value 

Brand Management has a lot to do with how valuable people perceive your offerings to be. Perceived Value is a way to assess the level of value Roles feel they receive from individual Deliverables, from other Roles, and from the network as a whole. Perceived Value indicators are especially useful for surfacing assumptions - often unspoken or unconscious - about value and value flows. Simply because there is an interaction does not mean that positive value is being created. In fact people may actively dislike the input, or feel it is too costly to process - which could be a negative value. Perceived Value is especially useful when applied to intangible Deliverables, as it is often difficult to gauge their value with a number or financial measure.

It is important to remember that this is a subjective assessment. It is only about a Participant’s perception of value. Nonetheless, the different patterns that weighted value measures produce can lead to significant insights and point to where further research is needed.

How highly does the Receiver value what is being provided? Perceived Value can be understood from the viewpoint of the Sender, the Receiver, or both. The first and most obvious comparison to make is how the Sender and Receiver might perceive value differently. For example, a Sender believes a Deliverable brings high value to the Receiver but the Receiver perceives it as negative value. That would call into question whether it is worthwhile to expend resources to create thatDeliverable in the first place.

Does that Deliverable really provide value to the Receiver? It also is useful to compare Perceived Value indicators with the comparable cost/benefit data. The table below is a partial view of the data entry template for the ValueNetworks.com Application showing the selection list for Perceived Value.

The first pair of charts show the overall Perceived Value of transactions in the network. The first chart of the pair shows Perceived Value by Receiver. The second shows Perceived Value by Sender.

The next pair of charts shows the overall Perceived Value in terms of both financial and non-financial assets of all the transactions in the network. The first chart of the pair shows Receiver Perceived Value and the second shows Sender Perceived Value. The reporting function in the ValueNetworks.com application also generates a Table that shows all transactions in descending value order per the perception of the Receiver. 

Perceived Value assessment at the Network or Group level

Using survey technology and the same format as above, it is possible to conduct a qualitative evaluative survey of each Participant. The goal is to assess whether they feel the value received from their participation in the network overall is high, low, or negative, on the same scale as the example above. You may also do this for a designated sub-group in the network.

Aggregating data for the Value Network as a whole

It is also possible to aggregate the Perceived Value results to the network as a whole by taking the total Perceived Value of Role exchanges.

Other topics in this series:

Asset Impact Cost/Benefit Analysis

One of the most powerful benefits of value network modeling is the ability to monitor, predict and influence performance. Metrics are made simple with the Comprehensive Reports function in the ValueNetwork.com application. In addition to Animations and Detailed Visuals, indicator reports are generated for the Standard Value Network (Role view) and the Collaborative Value Network (Participant view). The text and charts below are drawn from a Standard Value Network (Role-based) Report, using the example of scheduling procedures in a health care organization. For other blogs in this series see the links at the end or simply search "Indicators and Metrics."

Note that Asset Impact indicators are greatly augmented by conducting a Perceived Value analysis.

Asset Impact by Role

Asset Impact

The Applications of Social Network Analysis conference in Zurich will be hosting two sessions featuring value network Analysis.