Business and society are founded on networks – networks of communication, people, organizations, infrastructure, trade, and far more. This has always been true, but in our hyper-connected world the fundamental networked nature of our world is coming to the fore. In my book Living Networks I described how these networks are now coming to life. We’ve seen the rising prominence of network partly in how “social networks” has become one of the hottest phrases on the planet, describing the extraordinary phenomena of MySpace, YouTube, Second Life, Wikipedia, and a host of other new tools. Organizational network analysis (ONA) has been adopted as a powerful management tool by many leading organizations. Influence networks are now one of the hottest themes in PR and marketing. Open innovation, the most talked-about development in corporate innovation, is fundamentally based on tapping external networks. Yet one of the most powerful applications of network approaches works at the very highest level – that of the how value flows through these networks.
The concepts of Value Networks were first thoroughly developed by Verna Allee in her book the Future of Knowledge (2003), in which she described how she had been mapping the flows of tangible and intangible value in industry networks. Examples included Cisco’s extended network, value flows in the pharmaceutical industry and an engineering firm, among others. Over the last few years the field has grown rapidly, with now a real critical mass of tools and real-life examples. Organizations such as Cisco, Boeing, SAP, and others are ardent proponents and users of value networks approaches. The Value Networks Cluster brings together practitioners around the world, having run events around the US and Europe, and runs a very active and interesting Value Networks discussion group. Verna, working with Oliver Schwabe and others, has released a suite of Creative Commons-licensed open resources, tools, and applications for value networks analysis. The rapidly broadening understanding of the central role of networks in business, together with the development and maturation of practical tools and methodologies, means value networks approaches are likely to become very prominent in business over the next few years.
[This diagram was taken from a excellent introductory article by Verna Allee on Understanding Value Networks].
I’ve known Verna since 1997, when she had just published her seminal book The Knowledge Evolution. Over the years we’ve shared many ideas and much thinking on the role of networks, and continuously sought opportunities to work together. Verna goes to New Zealand regularly in her role as Visiting Professor at University of Waikato, and has also been doing work for organizations including the independent government research organization AgResearch. AgResearch have been so enthused by the value networks work that they’ve been doing with Verna that they are keen to share these approaches with the broader community in New Zealand. Verna and I have planned similar workshops together before, so Verna kindly asked me to co-facilitate a workshop with her. Our Value Networks Masterclass will be held this 1-2 March in Hamilton, New Zealand. Full details including the agenda are on the event website. The idea is to make this as practical as possible, moving from the foundational concepts of value networks, through case studies of applying value networks methodologies, to specific tools and methodologies. It will be great to work with Verna on this – please do pass on word if there are people in New Zealand who may be interested!