Have you ever evaluated where your customer finds value within your company?
In Lean you try to find the one best path – the value stream map. In the marketing, we have created the marketing funnel. However, Organizations can no longer feed products to customers, as I described in the blog post, Kill the Sales and Marketing Funnel. Customers have the ability to access resources and information comparable to their suppliers and choose suppliers by their own definition of value and how that value should be created. Organizations must adapt to the networks our customer chooses to find value in the use of our products and services.
Verna Allee, M.A., is Co-founder and CEO of Value Networks LLC introduced me last year to Value Network Mapping through this Business901 podcast, What’s behind Collaboration and Value Networks? I have played with it, not mastering and have become more and more intrigued by the concept. Our world is increasingly more collaborative driving changes in the way decisions are made. Our organizations need to change to a more collaborative structure but the question is where do we begin?
From Value Networks and the true nature of collaboration by Verna Allee with Oliver Schwabe is a digital edition book located at http://www.valuenetworksandcollaboration.com.
Roles and interactions – providing focus for collaborative work
Role-based exchange networks are the natural way that people organize and collaborate to create value and achieve outcomes. In such a network every single person executes a chosen role. Through that role they provide value contributions to others and receive value in turn. Further, as long as people experience a sense of reciprocity and perceived value or accomplishment from the interactions – people will stay engaged.
The collaboration patterns that make things work have been pushed to the background through more than two decades of focusing on business process models. Now, with the growing use of social networking and collaborative technologies, the importance of those patterns is finally being recognized.
Indeed, people, and their very human exchanges and interactions are at the heart of value creation. People, not processes, are the active agents in organizations. Only people have the unique capacity to identify opportunities, innovate, and provide value.
Value streams typically only focuses only on the more formal deliverables. In sales and marketing it is not only the formal deliverable but the informal, which in value networks are called tangible and intangible.
Verna defines these deliverables:
When we model business activity we get into the very specific kinds of exchanges that are critical for success and we define two types of exchanges. We call them tangible or intangible.Tangibles are those things that are formal, contractual. If you don’t do these somebody’s going to want their money back. The things you must do, the value that must be delivered. We also are modeling all of those intangibles or informal exchanges that really build relationships and help things run smoothly. That is what is missing from process modeling.
Value network modeling is something that allows us to understand the pattern of different activities within organization or within the same basic value network structure. It’s a very, very different way of thinking about who delivers value. I like to use red and black checker after creating a map and stack them on the individual roles. I use black for tangible and red for intangible. This way you can have a better visual on what role the customer derives the most value from and what kind of value the customer is seeking.
Below is a transcription of the podcast I had with Verna and I recommend that you view her website for more information and to download a map outline to try it out.
Verna Allee book: The Future of Knowledge: Increasing Prosperity through Value Networks