Value network analysis

Value network analysis (VNA) is a methodology for understanding, using, visualizing, optimizing internal and external value networks and complex economic ecosystems. The methods include visualizing sets of relationships from a dynamic whole systems perspective. Robust network analysis approaches are used for understanding value conversion of financial and non financial assets, such as intellectual capital, into other forms of value. The value conversion question is critical in both social exchange theory that considers the cost/benefit returns of informal exchanges and more classical views of exchange value where there is concern with conversion of value into financial value or price.

Value network analysis addresses both financial and non financial value. Every business relationship includes contractual or mandated activities between participants — and also informal exchanges of knowledge, favors, and benefits. The analysis begins with a visual map or diagram that first shows the essential contractual, tangible revenue or funding related business transactions and exchanges that occur between each node of the networks. Nodes represent real people, typically individuals, groups of individuals such as a business unit or aggregates of groups such as a type of business in an industry network. During analysis when adopting a reflective, double loop or generative learning mode, it is beneficial to regard nodes as role plays (shortened to roles). Practitioners have found {2} that conversation between participants about role plays within a larger whole invariably results in transforming individual behaviour and gaining commitment to implementing needed change as elaborated below. Along with the more traditional business transactions the critical intangible exchanges are also mapped. Intangible exchanges are those mostly informal knowledge exchanges and benefits or support that build relationships and keep things running smoothly. These informal exchanges are actually the key to creating trust and opening pathways for innovation and new ideas. Traditional business practices ignore these important intangible exchanges, but they are made visible with a value network analysis. The visualizations and diagrams link to a variety of assessments, usually handled in Excel type spreadsheets — to increase value outputs, to leverage knowledge and intangibles for improving financial and organizational performance, and to find new value opportunities. When the analysis is complete people gain insights into what is actually happening now, where more value can be realized, and what is required to achieve maximum value benefit across the entire business activity that is the focus of the analysis. It is conventional to refer to the actual "things" that move from one Participant to another as "deliverables," whether tangible or intangible. If users find it conceptually unusual or contextually difficult to refer to an intangible (informal) thing as a "deliverable," they may, instead, prefer to use an alternative descriptive term "contribution."