Value Network Analysis is a useful tool for recruiters and human resource professionals. It expands how we think about people and the value they generate. A basic understanding of VNA should be part of every recruiter’s skill set.
According to Verna Allee
A value network is a web of relationships that generates economic value and other benefits through complex dynamic exchanges between two or more individuals, groups or organizations. Any organization or group of organizations engaged in both tangible and intangible exchanges can be viewed as a value network, whether private industry, government or public sector. The key business question in the knowledge economy is, “How is value created?” The traditional answer to that question is – “through the value chain.” The value chain model, however, is a linear mechanistic model of business that is based on the industrial age production line. Such a mechanistic model is simply inadequate to understand the complexities of value in the knowledge economy.
According to Verna,
The most critical factors of success — the intelligence of employees, the systems and processes in place to get the work done, and the quality of customer and supplier relationships — don’t show up anywhere on the balance sheet.” She describes three types of intangibles:
External Structure — Alliances and relationships with customers, strategic partners, suppliers, investors, and the community. Includes assets such as brand recognition and goodwill.
Human Competence — Individual and collective capabilities, knowledge, skills, experiences, and problem-solving abilities that reside in people in the organization.
Internal Structure — Systems and work processes that leverage competitiveness. Includes IT, communications, technologies, images, concepts and models of how the business operates as well as databases, documents, patents, copyrights, and other “codified” knowledge.
The following is an interview with Verna by Eileen Clegg from the Future of Talent Insitute that focuses on moving from social networks to value networks.
An introduction to value networks directly from Verna
Verna Allee explains Value Networks
Verna Allee is a pioneer in developing the concept of value networks and showing how, by understanding how people interrelate, organizations can identify where the greatest value is produced it where it is lost.
She has authored or co-authored three books on value networks and organizational knowledge. Her book The Knowledge Evolution: Expanding Organizational Intelligence offers a road map for understanding knowledge creation, learning, and performance in everyday work. The book The Future of Knowledge: Increasing Prosperity through Value Networks is about how the networked organization can be understood at a practical everyday level.
Verna has been a part of the Future of Talent Institute for many years and has shared her wisdom and knowledge with us on how to better use the people within our organizations by learning where and how they really contribute.
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