Companies often achieve great success with a value network business model, or internal collaborative value networks, only to have that advantage erode over time. Why is that? In our experience, an organization that has not truly mastered Value Network Analysis (VNA) as a basic competency finds it increasingly difficult to hold the line against the more familiar and traditional bureaucratic models of organization. As a network grows in complexity people try to “control” the value network by imposing bureaucratic order. They either try to reconfigure the network as an organization chart or drive it into tightly controlled process models. Either way they will sub-optimize the very network qualities they need the most.
Levels of maturity are standard levels of competency that have been the foundation for many different kinds of maturity models. One of the best known frameworks is the Capability Maturity Model (CMM). The maturity model framework can be adapted to value networks as well. Such a model can help address questions of value network competency and aid in developing value network strategies.
The following Value Network Maturity Model was developed by Verna Allee and Oliver Schwabe and has been validated through both research and practice. Through observation, surveys, or collaborative processes any given value network can be defined, mapped, and assessed according to the levels of maturity. Once you have determined the level of maturity, then you can identify those characteristics that need improvement. Value Network Analysis provides a way for participants in a value network to evaluate, monitor, and improve network performance over time. You can find more on this and other topics in the Help Library of the ValueNetworks.com application.
Level 1. Initial Stage
It is characteristic of value networks at this stage that they are mostly undocumented and in a state of dynamic change. They tend to be driven in an ad hoc, uncontrolled, and reactive manner by dominant participants or events. This provides an unstable environment for the value network. Informal relationships (Intangibles) dominate. Transparency tends to be low.
Level 2. Repeatable Stage
At this level of maturity some sequences or value flows are repeatable, possibly with consistent results. The flows may not repeat for all situations or scenarios. Clear Roles can be identified in the network. Although consistency and quality may be uneven, Roles are executed with regularity. Organizations may use basic management tools and practices to help execute roles or consistently complete particular sequences. Formal agreements are limited and apply only to the execution of specific transactions or isolated sequences.
Level 3. Defined Stage
It is characteristic of value networks at this level that there are sets of defined and documented standard sequences and specific transactions between Roles. These are installed with simple controls for improvement over time. Most Roles have established expectations, informal agreements, and more rarely, contractual agreements with each other to establish consistency of performance. Such controls may apply to Role execution, or consistency of value flow sequences. Standards and guidelines are generally applied, with some tailoring if necessary.
Level 4. Managed Stage
At this stage value network metrics are used effectively to control different flows and sequence variations. Managers and Role leaders can identify ways to adjust and adapt the flows to particular projects without measurable losses of quality or deviations from specifications. Participants in the value network engage in a network narrative with negotiation of Roles, Deliverables, value flows, and sequences. Service-level agreements between Roles are common. Some value flow agreements may involve multiple Roles.
Level 5. Optimizing Stage
It is characteristic of value networks at this level that there is a general focus on continually improving value network performance through both incremental and innovative changes and improvements. Appropriate technologies are deployed to execute all Roles effectively and complete transactions at the lowest possible cost with optimal speed. Roles, flows, and key sequences are continually monitored and measured for performance. The network narrative has expanded to where key Roles, often through explicit agreements, cooperate to define and monitor overall network performance. | 
