Value Networks

 and the true nature of collaboration

   

Chapter 7: Deep Dive into the Methodology

Value Network Maturity Model

 

 

Value Network Maturity Model

A maturity model can help address questions of competency 

and value network strategies.


There are many different kinds of maturity models which define standard levels of competency within a given topic area. One of the best known frameworks is the Capability Maturity Model. (http://en.wikipedia.org/wiki/Capability_Maturity_Model.) The maturity model framework can be adapted to value networks as well.

 

Companies often achieve great success with a value network business model, or internal collaborative value networks, only to have that advantage erode over time. Why is that? In our experience, an organization that has not truly mastered Value Network Analysis as a basic competency finds it increasingly difficult to hold the line against the more familiar and traditional bureaucratic models of organization. As a network grows in complexity people try to "control" the value network by imposing bureaucratic order. They either try to reconfigure the network as an organization chart or drive it into tightly controlled process models. Either way they will sub-optimize the very network qualities they need the most.

Value Network Maturity Model

 

This maturity model was developed by Verna Allee and Oliver Schwabe.
Allee/Schwabe Value Network 
Maturity Model, 2007.

Level 1. Initial Stage 

 

It is characteristic of value networks at this stage that they are mostly undocumented and in a state of dynamic change. They tend to be driven in an ad hoc, uncontrolled, and reactive manner by dominant participants or events. This provides an unstable environment for the value network. Informal relationships (intangibles) dominate. Transparency tends to be low.

Level 2. Repeatable Stage

 

At this level of maturity some sequences or value flows are repeatable, possibly with consistent results. The flows may not repeat for all situations or scenarios. Clear roles can be identified in the network. Although consistency and quality may be uneven, roles are executed with regularity. Organizations may use basic management tools and practices to help execute roles or consistently complete particular sequences. Formal agreements are limited and apply only to the execution of specific transactions or isolated sequences.

Level 3. Defined Stage

 

It is characteristic of value networks at this level that there are sets of defined and documented standard sequences and specific transactions between roles. These are installed with simple controls for improvement over time. Most roles have established expectations, informal agreements, and more rarely, contractual agreements with each other to establish consistency of performance. Such controls may apply to role execution, or consistency of value flow sequences. Standards and guidelines are generally applied, with some tailoring if necessary.

Level 4. Managed Stage

 

At this stage value network metrics are used effectively to control different flows and sequence variations. Managers and leaders can identify ways to adjust and adapt the flows to particular projects without measurable losses of quality or deviations from specifications. Participants in the value network engage in a network narrative with negotiation of roles, deliverables, value flows, and sequences. Service Level Agreements between roles are common. Some value flow agreements may involve multiple roles.

Level 5. Optimizing Stage

 

It is characteristic of value networks at this level that there is a general focus on continually improving value network performance through both incremental and innovative changes and improvements. Appropriate technologies are deployed to execute all roles effectively and complete transactions at the lowest possible cost with optimal speed. Roles, flows, and key sequences are continually monitored and measured for performance. The network narrative has expanded to where key roles, often through explicit agreements, cooperate to define and monitor overall network performance.

Assess the maturity of the network.

 

Through observation, surveys, or collaborative processes people can define, map, and assess the value network according to the levels of maturity. Once you have determined the level of maturity, then you can identify those characteristics that need improvement.

 

 

  

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