Value Propositions in Networks

The exponential potential of trust and belonging

Increasingly the networks we work with are asking how to articulate compelling value propositions. Network leaders want to make strong cases for funding and participation. Yet their approach can unknowingly reinforce a thread of self-interest that runs counter to their aspirations for collective action. In this post we explore how networks can create collective value propositions that effectively communicate the potential of networks — to realize a common purpose through coordinated collaboration that no member could achieve working on their own.

First, what is a value proposition?
A value proposition is the concept of exchange behind a business’ product or service. The business develops a model of its target customer and uses the value proposition to describe how a product or service helps the customer achieve their goals, address challenges, and bring new benefits to their lives. The value proposition is a structured hypothesis about how well the offering meets the customer’s functional, social, and emotional wants and needs. A common metaphor for this relationship is a pipeline. An analogy that builds on the image is a winning birthday gift. Something that includes surprise and delight while also being functional.

Linear Exchange

Originally value propositions were developed for two sided transactions where sales move goods from producer to consumer. In recent years there has been a rise in multi sided platform businesses where value is exchanged with several types of customers. In these models, the business sits at the center brokering exchange and the customers are both consumers and producers. The goal is to draw more people and more offerings so that more money flows through the marketplace. Airbnb is a great example of a platform for travelers to connect with hosts and, increasingly, other guest services and local adventure options.

Multi sided platform business

There are a variety of value propositions being brokered by the business in the multi sided platform. Each value proposition is unique to the customer and designed to generate participation that pulls in more customers. Platforms leverage diversity to simultaneously grow both supply and demand. A metaphor for these relationships is a hub and spokes. An analogy is a collaborative dinner party in which the host works with each invited guest to contribute something that creates a delicious meal.

What about networks?
Networks are different than organizations. Businesses intend to make money meeting the needs of customers. Networks intend to generate collective benefits within an ecosystem. Most organizations are inherently self-interested in that they focus on their ongoing survival. Depending on their orientation, they express varying degrees of care for a mission, their customers, supply chains, and stakeholders.

Networks

Networks are created to care for a system as a whole. Designed for shared learning and collaborative action, they are inherently oriented collectively and centered around a shared purpose. Networks have collective value propositions that fuse self-interest with the shared interests of the network members.

A collective value proposition focuses on mutuality and common good. A collective value proposition speaks in terms of We. For a network, the collective value proposition is rooted in a shared identity as members working toward the network’s purpose.

Instead of linear relationships between producers and consumers that benefit a primary organization, networks weave multifaceted relationships among members creating synergy that benefits the ecosystem.

A metaphor for a network is a web of interconnectivity. An analogy is a dance party. Whoever wants to dance shows up. People are free to dance with whomever they feel inspired to dance with. Moves shift and change through the night, but what holds the whole together is a common beat of the music.

The exponential potential of increasing benefits
The striking difference between a traditional value proposition and a collective value proposition lies in the exponential potential of increasing benefits. The traditional value proposition assumes that benefits flow only between producers and customers. Occasionally there is positive spillover, but typically the system remains fragmented. Self-interest is the primary driver as participants within the ecosystem compete for resources.

A network with its collective value proposition turns this thinking on its head and orients toward the whole as a strategy for enabling benefits to flow throughout the ecosystem. Structured like a web, more connectivity allows more flow through the network. At each stage of network development greater collaboration is possible and the collective value compounds in a positive feedback loop. An increasing sense of belonging nurtures generosity, and collective value appreciates.

As members’ relationships develop and become more interconnected, the collective value propositions of networks layer. Consider this progression in four stages.

  1. Connection generates awareness of the ecosystem. Players become visible and relatable. With new relationships and a map of the territory, we can locate ourselves in the landscape.
  2. Knowledge sharing generates understanding of ecosystem dynamics. Information about activities and experiences begins to illuminate a variety of challenges and the wisdom underlying various approaches to common circumstances. With shared awareness of the terrain, we can navigate the territory.
  3. Coordination of existing activities increases efficiency. Open communication makes it possible to identify gaps and surpluses, vulnerabilities and strengths. With common purpose and language, we can make choices to optimize the flow of resources.
  4. Collaboration generates innovative thinking and action. Deliberate processes for creative engagement lead to emergent outcomes. Within a context of trust and mutuality, we co-design and produce what is essential for collective flourishing.

Trust is essential because reciprocity is nonlinear and indirect. In the same way that we all breathe the air without knowing which plants produce the specific molecules of oxygen we inhale, a collective value proposition requires a leap of faith. It invites participants to center their actions on a purpose bigger than their organization and contribute to the better world their hearts know is possible. It invites participants to recognize our interdependence and consider it rational and beneficial to give before you receive.

Constellations not Stars
Too often networks trip themselves up by emphasizing self-interest out of habit. They deliver mixed messages aiming high with a common purpose but falling short with narrow appeals to self-interest that reinforce a mindset of scarcity.

It’s possible to instead leverage the pull of the collective value propositions for greater good when we nest self-interest within system interest. When we consistently and artfully speak from the whole. When we hold onto collective flourishing as the state in which we all thrive.

The network as a whole is the focus and driver of change. Success is collective, not individual. Effective network value propositions are framed collectively, not individually. They make the case for what we can do together that we can’t do alone.

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Converge is a network of strategists, designers, storytellers, and systems thinkers who believe in interconnection as the ground for action. There is nothing more powerful than an idea whose time has come — join us in the network approach to creating a future that works for all.

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Carri Munn

Carri Munn

Chief Wisdom Officer bringing business rigor and heart to collaborations in service of life. Honoring emergence and leaving room for the Mystery.

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