Value Networks

 and the true nature of collaboration

   

Chapter 4: Analysis Basics

Perceived Value

 

 

Perceived Value

So, you think you are providing value?

What does the recipient really think?


The Perceived Value Analysis is a way to assess the level of value of specific deliverables, from the perspective of participants, the network as a whole, customers, and others.
Sustainability of any given value network is dependent upon there being a high level of perceived value from the view of the participants. They must feel their participation brings them direct benefit. Sustainability of the network increases as the participants realize increasing value from their interactions. Sustainability also increases if the network itself is perceived as being of high value in terms of its social or economic outcomes. 
It is important to remember that Perceived Value is a subjective assessment. It is only about people's perception of value.

Perceived Value is especially useful for surfacing assumptions - often unspoken or unconscious - about value and value flows. Simply because there is an interaction does not mean that positive value is being created. In fact people may actively dislike a deliverable they receive, or feel it is too costly or troublesome to handle.

An example

An investor banking group provided a special, slick report in their quarterly statements, thinking it was valued by their customers. However, the format was too difficult for customers to understand, and they had to throw them away.

The Perceived Value Analysis is not an attempt to achieve an absolute financial value for a network, which is a highly questionable exercise anyway. (There is more about that in Theory Base for Value Networks.) Nonetheless the different patterns that weighted value measures produce can lead to significant insights into how people are creating value in the network.
How to do the analysis

In order to assess perceived value, each role or participant must assign a weighted measure for every deliverable they receive from or provide to another role or participant.
Example A: Quick evaluation as part of an Exchange Analysis

When people complete the mapping they have the representatives of every role pair assess the perceived value of every deliverable happening between them. Use colored dots to mark each deliverable as a red, green, or yellow. 


Red means neither of the roles believes it has high value. Yellow is neutral or where there is a difference in value perception. Green means both the sender and receiver feel the deliverable offers high value. 


The simple objective of this exercise is to brainstorm how to eliminate the reds where possible and develop ways to turn deliverables of questionable value into higher value.
Example B: Deeper analysis  

You can assess perceived value at the role level and at the participant level. The following table shows a sample spreadsheet configuration for collecting the perceived value for every transaction. Other scales of weighted measures are possible, of course. And this same configuration may be used to consider the value to the network as a whole.

Transactions

Perceived Value Analysis

Deliverable:

Nature of Deliverable:

 

(intangible

or tangible)

Comes From:

 

(role)

Goes To:

 

(role)

Sender's perceived value of the deliverable:

   Unknown ( - )

   Very High ( +3 )

   High ( +2 )

   Medium ( +1 )

   Neutral ( 0 )

   Low ( -1 )

   Very low ( -2 )

   Extremely low ( -3 )

Recipient highly values the deliverable:

   Unknown ( - )

   Very High ( +3 )

   High ( +2 )

   Medium ( +1 )

   Neutral ( 0 )

   Low ( -1 )

   Very low ( -2 )

   Extremely low ( -3 )

Variance

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Sample Report

This pair of charts shows the overall perceived value of transactions in the network. The first pair shows perceived value by receiver, and the second pair shows perceived value by the sender.

Clearly, in this situation the value providers believe they are providing significantly higher value than what the recipients think.
A sample report that shows the overall perceived value of transactions.
The first is by receiver and the second by sender.
Ctrl+scroll to see larger.
Example C: Aggregating data for the value network as a whole

It is possible to aggregate the perceived value results to the network as a whole by totalling the perceived value of role exchanges as in the matrix below.


The network is composed only of Role A, Role B, and Role C.


The total perceived value of all inputs from the roles shown across - from the perspective of the roles down - is entered based on a scale from +3 to -3.

It is also possible to conduct a qualitative evaluation survey of each role (or sub-group). The goal is to assess how they perceive the value received from their participation in the network overall - using this same scale.

- Do senders and receivers perceive value differently?

- Which roles or participants provide the highest perceived value overall?

- Are there roles that have negative perceived value contributions? Sometimes regulations or security drive certain deliverables but often a little negotiation can mitigate negative impacts.
Useful indicators

Below are key indicators that result from a Perceived Value Analysis, the questions they help to answer, and implications.

Indicators

What they can show

What are the implications?

Total each role/participant:

- Total tangible perceived value

- Total intangible perceived value

Which roles or participants are receiving the most value from the network - and which are receiving little or no value from the network.

 

It also shows which roles or participants are the greatest value contributors.

Looking at the perceived value profiles can show not only who is receiving value but also who is not contributing value in a direct way.

 

Low-value contributing roles/participants may still play an essential role in the network. They are just not perceived as providing value directly to other roles/participants. They can simply be under-appreciated and need ways to make their value more visible or apparent to others in the network.

Total perceived value between role/participant pairs:

- Total tangible

- Total intangible

Shows the highest value-creating relationships.

This can indicate the importance of each role/participant pair or set of relationships in terms of value. It can also indicate if there are roles/participants who appear to be gaining value at the expense of others.

Total overall perceived value:

- All roles / participants

An overall assessment of the value of the network.

This would be an indicator of how highly roles/participants perceive the value of the network.

Average perceived value per role/participant:

(total value divided by number of roles)

Average value assessment of the roles/participants.

This gives another perspective on value by looking at the average level of perceived value across the network rather than the total.

Ratio of high-value roles/participants to negative-value roles/participants

Shows stability of the network.

Network stability is linked to the role/participants' combined perception of value. Roles/participants are more inclined to withdraw from networks where they perceive little or no value for themselves.

 

 

  

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