This was a cracking day. A room full of engaging, passionate people who seemed to really care about the subject we were discussing. There is just no substitute for conversation with people who like to share ideas and explore new possibilities rather than make thinly-veiled sales pitches.
First keynote speaker was Verna Allee author of The Future of Knowledge. Verna says
The value network perspective makes it abundantly clear that success today is all about relationships. We sometimes are dazzled by technologies and what they can enable us to do. But the bottom line is that business is about exchanges and transactions that happen between real people. Even when people never see each other or speak directly, only real people can make decisions and initiate action. Technologies may fill the role of decision-makers at times, but only based on what a real person would do.
When business is viewed as a linear process, a set of functions, or simply material transactions, it not only diminishes the role of people – it makes invisible the all-important human relationships. The value network focus puts people back into the business model in such a way that every individual can see who they need to be in relationship with, and what their responsibility is in that relationship.
No seriously, go read the extract.
I found Verna very cheering and optimistic. Great to hear someone articulating so well the need to understand that value today is being created in ways that conventional accounting can’t really hope to measure.
She touched on the topic of “Social Network Analysis” which basically means creating diagrams of organisations based not on the official hierarchy but on the actual contact made between people – where the real conversations take place. Such work often shows that the real energy in organisations is in webs that bear little resemblance to the formal structure. Verna explained how the dot.com survivors were often characterised by having very strong social networks with multiple stakeholders – creating engaged conversations with them long before any money ever changed hands. Cisco innovated socially creating these connections long before the money started to churn. Oooh, great stuff this.
Other gems from Verna:
“We’re living in the middle of a huge barter economy that we’ve ignored” – ie many exchanges are taking place that don’t involve money changing hands… “asking how to put a dollar value on knowledge is asking the wrong question.”
Processes are not the active agents. People are.
What’s interesting about companies is not what makes them alike but what makes them different. Conventional accounts show companies as if they are the same; intangibles are what make them different.
Thanks Verna for a brilliant and inspiring presentation.
Update Further conversation with Verna prompts this clarification of the above. She comments:
One challenge in the work I am doing is to distinguish value network analysis from social network analysis. Social network analysis only deals with simple directional arrows so it cannot get at these core exchanges that I feel are important to understand in able to draw the economic and business linkages. While social network analysis is a truly wonderful methodology it is inadequate to address the particular questions that I am asking. (Just as my methodology would be inadequate to fully describe a social network.) The intangible exchanges in a value network diagram would not describe a social network, only those relationships within a business or value network.
If I’ve (now) got this right, value network analysis means trying to figure out what are the relationships that have the most impact on value – perhaps not the same as the most gossipy which might show up as big fat arrows in social network analysis.
Funny this. Regular readers (well I hope the plural isn’t too much hype) will know that I have a horror of diagrams most of the time, but these ones that attempt to show networks really intrigue me.