SNA / VNA / ONA

Classic network analysis methods and Value Network Analysis (VNA)

Social Network Analysis (SNA) is a network analysis discipline that focuses on relationships among social entities such as members of a group, corporations, or nations. It explores both directional and bi-directional exchanges, including sharing of information or types of business relationships. Social network analysis has a long and robust history as a research tool, yet only recently has been employed as an organizational analysis methodology.

Organizational Network Analysis (ONA) is a term that emerged between 2001 and 2003 when managers and leaders became interested in better understanding knowledge flows and identifying the informal subject matter experts in an organization. ONA refers to the application of social network analysis (SNA) to organizational and business issues.

Value Network Analysis is the role-based network analysis approach described in this book. It is designed to better understand multiple value interactions between roles in order to optimize tangible and intangible value creation among participants in any work group, business unit, cross-boundary activity, organizational business web, or purposeful network. It also shows business transaction links in a way that eases asset management, cost/benefit analysis, and other management methods such as business process modeling (BPM).

Here is a summary of the differences between modeling elements.

The multiple ties and unique attributes required for a VNA are problematic in applications designed only for social network graphs and analytics. However, a very simple approximation of VNA can be achieved by generating two separate SNA models for any given network. Different views might be: a) all tangible ties, b) all intangible ties, c) the role based network, d) the participant based network. A comparative analysis of the networks would provide a limited number of VNA insights. (Note that these different views and comparative analysis can be generated automatically in the Value Network Insights(tm) application, but can also be generated manually in most SNA applications as different networks.)

Certain network structures are thought to denote the stage of development of a network. Informal or new networks often show up as poorly connected clusters. When a strong central connector comes into play there is more of a hub and spoke pattern. A more advanced stage is a "small world," well-connected network of multiple connected clusters. A mature network generally shows a well-connected core group with multiple hubs as well as less-connected peripheral hubs. This last structure, core/peripherals, is considered to be the most sustainable and vibrant.

This stage of development theory may or may not be the same for value networks. Given the purpose of a value network it is possible that the small world pattern - not the core/peripherals pattern - might actually be the most productive in terms of value. Most network research has looked at social and informational networks. VNA research indicates that it is possible to establish a connection between different network structures and the capacity for a particular type of value creation, collective action, or outcomes. The implication is that there could be significant differences between social networks, action-focused societal change networks, and those that are more commercially or economically focused.

The value creating capacity and dynamics of networks is still a relatively new field of inquiry. So, many of the comments below are more like research questions where we really do not know the answer yet. Many different researchers are tackling these questions and the next decade promises to bring powerful insights into many of the questions posed here.

The following looks at some of the typical indicators that can be produced in an SNA and explores their significance for understanding patterns of value creation and for the overall health of a network from a VNA perspective. More on the comparison of VNA and SNA can be found in Patti Anklam's excellent book Net Work (Anklam 2005).

The concept of hierarchy is based on the idea that all complex systems including information-based organizations have a certain level of hierarchy. (Krackhardt, 1994) developed the measure of degree of hierarchy that indicates the extent to which relations among the actors are "ordered" and whether there is little if any reciprocity.

Does this assumption that in hierarchies there is little reciprocity hold true in purposeful value creating networks? What is the normal degree of hierarchy in a productive network? Would we find there are stronger hierarchies in successful value networks or is hierarchy more desirable? Intuition would say that hierarchies work against network ways of organizing, but can this actually be demonstrated or is it possible for hierarchies and small world networks to comfortably coexist? Does the purpose or desired outcome for a network change the requirements for success in terms of more or less hierarchy?

Path lengths

Common SNA indicators are:

Shortest path length - minimum links needed to go from one node to another.

Average path length - average of all the shortest path lengths for going from each node to every other node.

Diameter - the longest path length that exists between two nodes of the network.

Center - the node with the smallest average shortest path length for going to all the other nodes.

Path lengths are also indicators of how long it takes for a practice to diffuse across the network. So in a sense one could think of this indicator as showing the length of the innovation pathways. Particularly in networks with a high ratio of intangibles, one could expect that path lengths need to be short to assure good information flows. Path lengths can reveal how central certain roles are and which deliverables have priority. Path length can be a determinate of the quality of social capital in the network.

Density shows how many connections exist out of the total of all possible connections. In VNA this question is significant when the potential ties (the minimum potential ties being four between each participant) are compared to the actual number of ties. Higher density would indicate a resilient network, but too much density could indicate a "closed" network or one that is slowed down by too many interactions between the roles.

The resilience of a network is typically measured by sequentially removing nodes from the network. This is a very useful exercise in scenario development by considering the implications if roles change or disappear. In VNA a key indicator of resilience is the ratio of tangible to intangible ties. See more in Value Network Indicators in the Advanced Analysis chapter.

Centrality indicators show the extent to which actors have more relationships with more members of the networks, play a role that is more connected to other roles, are higher in the hierarchy, and have a greater range of ties and are more connected to non-connected others. Combined with directional value flows, centrality measures looking at in-coming and out-going links can determine if an actor is a value "sink" or truly a value hub that generates or amplifies value in the network.

Degree centrality

In SNA the more ties an actor has then the more power they may have to influence the network. More ties can indicate greater opportunities for innovation and value creation because there would be more choices for value creating interactions. However, this can also be a risk factor for a value network as a whole if there is too much dependency on a single role.

Betweenness centrality

Using path lengths as the basis for measure, it is possible to measure the betweenness of actors who lie between other pairs of actors. Such actors can have large advantages over those at the periphery. If actors have both a high centrality measure and high betweenness they then have a great deal of power in the network. Still an open question that requires more research is whether successful value networks have more distributed power or whether power centers are actually an essential element in helping to keep the value focus of the network.

Central connectors are actors (roles are participants) that have more relations with more members of the networks through a greater range of ties. This might show the capacity for forging value creating linkages, but in a value network they might also act as a bottleneck restricting value flows. It is important to know if a role is really contributing value or just has a lot of value coming in. In that regard directional ties help to illustrate how well roles are handling flow through.

Boundary spanners are actors that link two different networks or bridge groups of participants that serve very different roles or functions. Do boundary spanners tend to consistently play a similar type of role in different value networks?

Information brokers are typically actors who appear to play a strong role in exchanges and flows of intangibles such as knowledge and information. How does this role appear in focused value creating networks? Is this role as essential in a value network as in a knowledge network or information network? Note we have found more than one situation where unrecognized information brokers were either facilitating or impeding the network significantly.

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