Value Networks Cluster, Toronto. March 23rd
Verna Allee is a leading light in the discipline of Knowledge Management, having built a solid methodology, a steady practice and tools (some open source), around the notion of Value Networks for modeling Enterprises as Living Systems.
Verna Allee and Oliver Schwabe are visiting The Toronto Value Networks Cluster http://www.vncluster.com/YYZ.htm at The Kingbridge Institute, www.kingbridgecentre.com on March 23, 2007.
Also talking at this event is Anthony Williams, one of the two authors of the best-selling book, WIKINOMICS: how Mass Collaboration Changes Everything.
If you live in Ontario, can get to King City, and are interested in how Knowledge Management intersects with Web 2.0, you’d be remiss to miss this!
About Value Networks
Example Value Network, from Verna’s whitepaper: A Value Network Approach for Modeling and Measuring Intangibles (PDF)
Value Networks trump Value Chains under the light that no organization’s activities can be statically defined:
Most of the management tools we are familiar with are “engineering” type tools. They were developed to break down a … system into its parts or processes and fine-tune them for maximum efficiency and output with the lowest possible amount of inputs and “friction” in the process. However, when it comes to understanding organizational dynamics, engineering tools are very limited. Something that is complicated, like an airplane, can be engineered. All the parts are ultimately knowable and predictable according to rules of physics and can be managed.
So, it simply doesn’t work to try to break a living enterprise down into functions or individual processes, then paste it all back together as an engineered whole system. When you cut a horse in two, you don’t get two horses - you get a mess.
In short, complex systems are not knowable, and not decomposable. (For more about complexity vs. complicated, follow Dave Snowden’s blog at http://www.cognitive-edge.com/)
Intangibles
Many of the most important relationships aren’t monetary: they are intangibles, such as Knowledge and Benefits:
Intangibles are those “little extras” people do that help keep things running smoothly and help build relationships. These include exchanges of strategic information, planning knowledge, process knowledge, technical know-how, collaborative design work, joint planning activities, and policy development.
Intangible benefits are advantages or favors that can be extended from one person or group to another. For example, a research organization might ask someone to volunteer time and expertise on a project, in exchange for an intangible benefit of prestige by affiliation. People can and do “trade favors” in order to build relationships. Intangible benefits often reveal the real motivational factors for people to engage in relationships and activities.
On-Demand Integration as a form of Value Networks
In today’s ever-more hypercompetitive world, organizations are less and less often in static relationships in relation to one another. For instance, when Software As A Service (SaaS) / On-Demand vendors integrate with one another, they create network effects, lock-in and other intangibles that make the system as a whole more attractive than if unintegrated.
Increasingly, vendor functionality is becoming plug-and-play from the customer organization point of view, allowing adopters to leapfrog to a new baseline of functionality if they are willing to just sacrifice standardizing some processes to the conformity that the value network of on-demand firms have defined.
Adopting such commoditized basics really helps small firms hit the ground running, focus on innovating and building their differentiators and get on the climb to sustainable revenues.
Beyond Commodization: Ruby On Rails
In a later post, I’ll talk about what I learnt from Jay Hancock of Kibbles Software about the cost, reliability and speed-to-market impacts of Ruby on Rails and how, as a consequence, a whole new world of custom software is shaping up.
Conclusion
With all these pieces, it’s an exciting time to be a consultant in the collaboration-meets-integration space. The very notion of “collaboration” has taken on new meaning with such massive scale. This scale gives rise to new complexities that can be analyzed with value networks and likely poses many new questions for Knowledge Management.
And just what are those questions? This I will ask, on March 23rd. If you want a questions asked on your behalf, please comment here. I promise to follow up with the answers I get.
