VALUE NETWORK ANALYSIS

ValueNetworks® is a leading-edge technology that has been adopted by many of the world’s leading corporations and governments as a way of approximating more closely the way the world works, particularly the intangible aspects of organisational behaviour and decision-making. It is particularly applicable in fields that consist of a network process involving many players and with outcomes that are both tangible and intangible - in other words, almost all contemporary social and business undertakings.

Value network analysis aids strategic planning by looking at the ways in which value is created, perceived, transferred between parties and converted from one kind of value to another in the course of social and business interactions. It is valuable not only because it provides a framework and language for discussing factors commonly overlooked by conventional economic analysis, but also because it works the way people do - recognising the validity of instinct and intuition. Experienced managers are well aware - even if it is not widely acceptable to admit it - that most important decisions are made on the basis of factors beyond business analysis. Analysis can be helpful in supporting or justifying the decisions, but it is rarely the decisive factor.

VNA is also useful for understanding and describing business models, because it shows graphically how value is created not only for customers and business partners, but also for regulatory agencies, competitors and other stakeholders that you might not otherwise even be aware of. Knowing who stands to gain (or lose) from your activities is an important step in building relationships and developing strategy.

Value network analysis typically involves four stages:

Role identification determines the scope of the analysis to be performed. This can be as simple as mapping the reciprocal flows between two parties or as complex as the entire value network — all the entities with which your organisation has a relationship or whose actions might impact on (or be impacted by) your activities.

The “As is” value map plots the flow of value amongst the various roles represented in the network. These are documented in three stages as three different kinds of flows: tangible (typically planned or deliberate transactions), intangible (typically unplanned) and knowledge flows.

The network analysis looks at the pattern of the flows, gaps and overlaps, the balance between tangible and intangible, the relative importance of each flow, its sequence, costs and risks. It also considers ways in which value can be created by shifting flows from one “currency” to another.

Finally, there is a scenario planning or “what if?” stage, in which roles can be added, merged or removed and their nature and intensity examined for opportunities where additional value or leverage might be obtained.

We can coach or facilitate the process to map the value flows of a relationship, a project, a business model or an organisation.