An organizational network based around value and influence
Some of the best thinking around more progressive models of organizational design primarily — in my experience — center around how to cultivate a network of high-performing teams that don’t follow typical hierarchical management standards (see: Spotify tribes, squads, etc. or Holacracy). Aaron Dignan, of The Ready, also wrote an article that I refer back to constantly called, “the last re-org you’ll ever need to do,” which is all about embracing a networked organizational mindset that is built to constant adapt as internal and external conditions change.
But, at Beyond, a high-growth design and technology consultancy, one of the challenges I have encountered is how you keep a network of self-organizing, empowered teams highly connected — both to each other and to strategic company goals. We buy into OKRs, but without nuance those can very quickly begin to feel like a hierarchical, management, trickle-down goal setting technique to get the troops marching to your orders. I have been fixated on the notion that there must be a better way to achieve autonomy at a micro level amongst teams and individuals, connectivity at a network level so that there is a high-fidelity of connection between those teams, and also uber-strategic alignment at a macro organizational level to ambitiously push the company into the future.
I think the key is the concept of a value network.
A value network is the sum of the sum of the relationships between strategic activities that are oriented towards the creation of value.
That value, in the case of Beyond , in organized very simply into a handful of areas:
- Customer value — existing and new client relationships
- Brand value—both external brand value in terms of market awareness and internal brand value in terms of identity and culture
- Innovation value — the creation of new products, services and capabilities that will then lead to value creation in other areas, such as customer value and brand value
- Operational value — improving and optimizing key business functions
Within each of those 4 areas there are anywhere from 2–10 different activities that require strategic leadership in order to generate the maximum value for the core. For us, the network then begins to look like this:
As opposed to seeing each of these ‘nodes’ necessarily as individual teams, the way to look at this is to see it as a group of activities and focus areas that influence value creation across the whole. Given we predominantly work in product teams (not too different from Spotify’s “squads”), this network becomes a visualization of what you would conversationally refer to as the “glue between teams.” So, I see that dynamic essentially looking like this:
This isn’t an entirely new concept, in fact quite the opposite. Walt Disney was talking about the exact same thing back in 1943.
And, in slightly more recent history than 74 years ago, but still all the way back in the ancient past of 1993, Richard Normann and Rafael Ramírez wrote in HBR that they see “value models as dynamic, fluid systems in which the objective is to continuously improve relationships and roles within the model to create as much value as possible.”
Using a value network also has the benefit of dramatically altering the primary purpose of leadership. Instead of seeing leadership as a management function, you shift to see it as a tool for influence and value creation, which really is what we’re all after at the end of the day anyway (more on good vs. bad “leadership” here).
Back to OKRs, each of these ‘nodes’ then has a series of OKRs that are highly connected to other ‘nodes.’ You can begin to see how ‘brand’ can’t be successful unless ‘product innovation’ does it’s job, and ‘product and value’ can’t be successful unless ‘product delivery’ does it’s job, and so on. OKRs become more meaningful and shared in this context.
Every organization is different, but I have found the concept of value networks to be something that holds immense promise in getting an entire group of people focused on how to work together to achieve highly inter-connected goals. Once you can do that, the next challenge becomes embracing the fluidity, as Normann and Ramírez mention, and being committed to adapting the network constantly.
*credit to Kim Turley for introducing me to the definition of ‘value networks’ when discussing the ideas but not knowing it was actually already a recognized term and concept, and to Charlie Lyons for putting me onto Walt Disney’s ahead-of-his-time org thinking!