Principles of Value Networks

The true shape and nature of collaboration is not the social network – it is the value network. Value networks are purposeful groups of people who come together in designated roles to take action or produce an outcome. Only through the power of value networks can we address our complex issues – together – and create a more hopeful future.

Here are a Baker’s Dozen principles to guide value network strategies.

1. The natural pattern for creating value through collaboration is a network pattern. Exchanges of knowledge and ideas open the innovation pathways for creating new kinds of value.

2. The emergent purpose of a network is revealed through the pattern of roles and exchanges within the network. Sometimes the “espoused” purpose of a network is at odds with what it really produces.

3. You cannot administer a network - you can only serve it through the roles you play. Network strategies fail when people try to run a network like a hierarchy.

4. People - not processes - are the active agents. Only people can make decisions and initiate actions, in organizations, and in networks.

5. Every business process has a hidden network pattern of human interactions. Traditional work design approaches ignore the critical human interactions that build relationships and make the processes work.

6. Sustainability of a network depends on how highly people perceive the value of participating. People “vote with their feet” and abandon networks where they feel they do not receive value.

7. The primary mechanism for creating social and economic good is the network. Yet, our traditional units of analysis for production are the firm, the industry, or the nation-state.

8. The molecular level of value creation is the exchange. Value is not limited to financial value - any exchange of goods or value puts us solidly in the realm of economics.

9. Every interaction in a network is an opportunity to create value or build relationship. Network interactions have intangible value even when financial transactions are not involved.

10. All value is subjective and contextual - even financial value. Value is an emergent property of social systems.

11. The dynamics of value in a network are dependent upon network effects. One cannot determine the value of the network by simply adding up all the roles and their outputs.

12. The success of an enterprise depends on how efficiently it can convert one form of value to another. As individuals and firms we must be able to convert our material and intangible assets into more negotiable forms of value.

13. Patterns of human interactions and intangibles are leading indicators for success. Network patterns can show work processes at risk and show how companies build strategic capability for the future.

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