Value Networks

 and the true nature of collaboration


   

Chapter 1: Value Networks

All Work is Networked

 

 

All Work is Networked 


The essential nature of work is humans interacting with other humans and the people behind the computer, the processes, and the machines.

There is a big difference between the way real people work and the mechanistic model of the production line or formal process. The humans that must manage that production line and work together engage in non-linear human interactions. They may follow and manage processes but even formal processes represent real human interactions as people hand off their work to one another. Those patterns of human interactions are always network patterns.

 

In the last decade we have been rediscovering the true nature of work as networks. Now that people are becoming more aware of networks - we see them everywhere. Keen interest in social networks has increased awareness of network patterns and is fueling a growing interest in working more consciously with network approaches. See Theory Base for Value Networks in the Deep Dive chapter.

Networks and situational complexity
People are startingto realize that network patterns are present at every level of situational complexity. Four or five years ago Dave Snowden and I had a lively conversation about the place of networks in different levels of managerial complexity. We used the complexity model referred to as the Cynefin framework and explored the structural implications in regard to networks. The diagram is adapted from a 2003 article by Cynthia Kurtz and Dave Snowden.
value networks and the Cynefin Framework

An example of simple order would be managing a business process such as order fulfillment. In simple order, process tools are the best approach. A hierarchy may actually be the best way to organize. 


Network connections may not be as important as the process. But a network perspective can be useful as a way to model supporting activities and human interactions along with the more structured workflows.

 


Complicated order would be something like building an airplane, project planning, or managing technology or operational systems. Usually, when managers deal with very complicated products or markets they emphasize traditional structures and methods, such as process engineering and formal organization models such as hierarchies. More recently, they also tend to encourage cross-boundary work teams and knowledge sharing networks such as communities of practice. Organizations are evolving to "hybrids" where formal and informal structures carry roughly equal importance. 


In complicated order human interactions are critical, so the network ways of working are very useful.

 


Complex un order dominates in situations that are highly contextual with many variables and options, such as developing a business strategy or trying to understand marketplace dynamics. When things are truly complex there are simply too many variables to predict or control outcomes, and traditional management controls and systems cannot allow for the variation that is needed for optimal performance. 


In complex environments networks are very important as everyone needs to be involved as a sensing and sense-making node for the environment. Further, it takes a lot of communication and interaction for people to respond quickly and collectively make good decisions. People still work toward consistent outcomes but those outcomes operate in the realm of probability, not predictability. 


Networks support the self-organizing requirements of complex order. People need a lot of autonomy to manage their work, yet there needs to be a high level of transparency among them. A systemic network approach, such as value network modeling, can provide a way for people to intelligently manage their work locally, while contributing to and working from a whole-system model of the work.

 


Chaos is where everything is in a change state and order is emergent. In true chaos, hierarchies are gone. Think of large-scale disasters such as the 2006 Indonesia tidal wave, the 2007 Katrina disaster in the U.S., or the devastating earthquakes in China in 2008. In the chaotic conditions immediately following a catastrophe people can be locally effective through weak networks.

 

In chaotic situations a formal or structured network approach would not be very useful - as the network or system is in a state of flux and ad hoc negotiation. Roles and participants are changing too much in the moment to effectively map the network. People can and do use a simple network narrative to organize and function effectively. Network analysis can be very helpful, however, in conducting an action review to help plan better for future situations.



Network ways of managing and executing work allow people to operate effectively from the middle of the Cynefin model. Recognizing and supporting network competencies can help people build the skills they need to move naturally into the most appropriate ways of organizing for the work at hand.


The New Dynamics of Strategy sense-making in a complex-complicated world
Kurtz, C. and Snowden, D. (2003), "The New Dynamics of Strategy sense-making in a complex-complicated world," IBM Systems Journal, Fall 2003.