Verna Allee Understanding the Value in Networks @ KMWorld

Organizations as Value Networks. Verna makes an excellent set of points on how to look at networks and the intangible flow within them. Verna starts with the following quote and how networks will focus our efforts.

The corporation as we know it, which is 120 years old is unlikely to survive the next 25 years. Legally and financially yes, but not structurally and not economically. Peter Drucker, Fast Company 2000.

Where will the new theory come from? She says we have forgotten that the founders of KM came from Intellectual Capital (others would quibble with this). How is value really created. It is a vital language we have to learn in KM. The real story is building strategic capability for the future (tick!). How you are building the intangible assets for your corporation? These are the things that will make your organization successful in the future. Learn the language of intangible assets. I must admit I’m surprised by this story. Primarily because when I was first getting involved in KM I spent all my time on Intellectual Capital, intangible assets and developed a tool for quickly identifying different types of Network Capital. I sense I was a little ahead of my time.

Some questions for practitioners..

• Are crowds wiser
• Is open really open
• how do we manage risk
• what is the future of IP
• Can we “manage” compleixty and change?
• What can we let go of?
• Are networks really better?
• How can we really innovate?
• How do we reconfigure our organizations to be truly adaptable and responsive?

First to shift peoples identities out of the box and into the learning pool. Referenced to See the Cynefin Framework by Dav Snowden linked in the previous post.

Key problem. How do we bring this idea of networks into the organization.

Social Organization Network Analysis. First bring in and look at social networks within business. Look at the communication patterns. Eg few connections. Introduce COP’s etc. Importance is clear. Pay attention to networks. This tells you people are connected. It is not really a business modeling approach.

How is a value network different

• Tangible exchanges eg good, services and revenue. Eg value streamsy
• Intangible exchanges, eg around policy, benefits, favors, planning knowledge etc. This has been the invisible world of value.

The intangible exchanges are key in the ability to partner. eg with competitors, standards groups, improve the entire industry. She provides a Cisco example.

Value Networks at Boeing.
Boeing is looking at Value Network analysis as a whole business modeling tool. This is not an org chart, task list, or process flow. These tools won’t stretch to address complexity. So at Boeing we create roles, value creating interations. Are the pathways open. Intangible exchanges tend to follow human interactions. How well does our knowledge network match our business transaction networks. VNA- analysis precedes systems level process improvement. Boeing needed an improvement in productivity on 787 quality control testing. They have created a sense-making map. One group at a time they have been able by role by role to reconfigure the whole organization. So in June we began running scenarios and then trace the pathways that that decision might take as it flows though the network. In a complex environment variation handling is a must. So the shift is now about roles not jobs. What supports this activity and the resulting value that is created. Test flying the organization … wind tunnelling the responses though these scenarios. Formal organization on one hand. It won’t go away. So we have a new way of negotiating the way the work get’s done. Ah… good! In contrast to Dave Snowden’s quotes on scenarios Verna uses them as a tool to accelerate learning, to ask.. how could we be wrong. Note: This may still need more testing via David’s approach. I just doubt the database exists in which to do it using his fragmented stories and narrative approach.

The flow diagrams are great. Using systems dynamics models. How do they support a healthy organization. The value network is becoming something that supports this. The language works to support formal and the informal ways in which we support each other.

You do not administer networks you serve them!

More details? See the new the value network consortium. Open Value Networks. Note use day to day language not “value networks ” etc in introducing / facilitating how inquiry take place.