Networked value creation in Business

Hugh McLeod


“There is an intrinsic value in doing something without being the best at it.”

Susie Gephardt


“The increase in value of the world of things is directly proportional to the decrease in value of the human world.”

Karl Marx


“eventually the system’s problem becomes a human problem and every human problem becomes a system problem”


You and your brand are as good as the value you bring to the marketplace.”

Bernard Kelvin Clive


In discussing business organizations I’ve seen so many pyramids, ‘team of teams’, squads, Molecules, organisms, mini-networks (formal & informal) diagrams my head hurts. Suffice it to say the crux of all them are:

      • Small teams are effective

      • Unconstrained connectivity (exchange of information) increases effectiveness

Then the complexity theory folk throw an additional curveball into the mix suggesting ‘nothing is causal in a complex system’ which means, well, I am not sure what that means other than its not very, pragmatically, helpful. I may not be able to inextricably link a specific longish term effect to a ‘small team causal action’, but I can certainly attach some effects to some causes (if I couldn’t I wouldn’t do anything). Nothing is inevitable, but there are always consequences to actions.

** note: I understand the non-linear effects within a complex system, I am hesitant to suggest nothing is causal if you ever want someone do do anything.

I begin with those thoughts because network value is found when the network creates value and the number of ways a network can create value can make your head spin.

Conversely, the number of ways an organization can destroy network value can make your head spin.

And while strict hierarchies are (can be) the main organizational culprit I would also suggest leadership attitude destroys most value.

For example.

One of my favorites is the leadership belief in the fallacy of ‘best talent on the assignment’ philosophy.

Uhm. Have you ever noticed it is always a small group of best people all the time? So basically, everyone is attempting to put the same people over and over again on whatever is deemed the ‘assignment of the day’ (which is not always the one that is either most important or will offer the best ROI to the business). Anyway. As McKinsey suggests in “Linking Talent to Value”  it would appear every business should rank each of their employees (kind of a bad version of ‘stars & worker bees’) and then use their best in some form of a flying squad to solve whatever it is they want to solve.


“identifying and quantifying the value of the most important roles in an organization is a central step in matching talent to value. These critical roles generally fall into two categories: value creators and enablers. Value creators directly generate revenue, lower operating costs, and increase capital efficiency. Value enablers, such as leaders of support functions like cybersecurity or risk management, perform indispensable work that enables the creators. These roles are often in counterintuitive places within the organization. Typically, companies that consciously set out to pinpoint them find about 60 percent are two layers below the CEO, and 30 percent are three layers or more below the CEO.”


The ‘best talent’ mumbo jumbo rears its ugly head in business in two main ways:

    • The worker bee conundrum: worker bees are typically a self-fulfilling prophecy in organizations. Someone gets assigned a role, compensated for meeting milestones/objectives within that role, and if you are good at hitting those milestones, you get more shoved at you .. over and over. Eventually they see you as a ‘productive worker bee’ and you see yourself as a worker because that’s what you do and get compensated for. You become a ‘best worker’, not one of the ‘best people to get assigned to the highest value creation’ slots.

    • The specialist/generalist conundrum: this is actually an organizational version of potential reductionism. The leadership assigns narrowly defined jobs (stay in your lane mentality) believing focus maximizes, well, efficiency for sure and some effectiveness <although that’s a dubious claim>. Its kind of a glorified machine mentality. Glorified in that the leadership claims your specialty skill is valued beyond a part in a machine, yet, this ‘glory’ unravels in that compensation has a ceiling and, well, they treat you like you can be replaced at any time. Then there are the ‘best’, who are typically generalists, who can seemingly craft value out of thin air in any situation. They get assigned to everything whether they are actually the best to bring out the most value or not. yes. This conundrum to management is actually a self-perpetuating doom loop.

Needless to say, neither of these two scenarios maximizes network value. Oh. It may work on occasion and in most cases the business will succeed well enough to think it worked, but it doesn’t even come close to maximizing network value. Most likely the result of this ludicrous organizational management is unbalanced results, repetitive work existence for the majority, absurd compensation for few, and mediocre outcomes. I would be remiss if I didn’t point out that this is because these ‘solutions’ are about managing people and not systems. What I mean by that is they see a system as stagnant (it is not) and seek to plug ‘n play people into a system.

Living with this is living with mediocre success, yet, leadership attitudes manifest itself in this activity over and over.

Now. Getting rid of what we do not want does not guarantee getting what you do want, let alone not guarantee even worse than what you have now. All I am doing is pointing out that existing business leadership talks about optimizing network value, but actually do not do any such thing.

Network value is about individual contribution and team contribution and organizational contribution. All connected.

Network value is all working with some agility and some replicable and some speed and some slowing down. Network value is complex and dynamic.

Network value is people, nested systems, working within a system. Network value is systems thinking.

I cannot remember where I found this but “the defining properties of a system are properties of the whole that none of its parts has.” Network value emerges as a defining property of the system as a whole. That alone dismantles the concept of “linking talent to value.”
Ideally, everyone in a system (business) should participate in the design of value in order to optimize network value. That said. This does not suggest everyone do so all the time at the same time, but rather, over time, everyone has participated in some way.

In order to approach this an organization has to establish some, well, principles. Principles, paradoxically, provide both enabling constraints as well as energy focus. Team identification, team development, team practices, team objectives and team ‘breakdown**.’

** note: while we spend a lot of time discussing creating teams at speed, we rarely discuss how quickly the team should be disassembled.

Please note that everything I have said about network value has involved people – human beings.

That said.

It is next to impossible to speak about network value without having to discuss the heinous ‘digital transformation’. It implies digital is the objective when the reality is that anything digital – technology – is a means to an end for a business. The end is “value creation.” And, in my mind, that value creation is inextricably tied to either a learning organization (ongoing learning) or simply humans, people, re-imagining things. That said. Technology certainly has a role in enabling that human network value creation. Technology should be an integral aspect of the future value creation and networked value creation. What I mean by that is business is inherently about connections – the more effective, efficient and dialogic the connections the higher the value generated and technology makes humans, well, networked. To be clear. This means talking of technology not as a network but rather something that makes humans a network (or networked).

As a reminder, networked value creation can occur structurally or transactionally.

Structural conceptual thinking, implemented as networked value creation, is not that difficult and has been done for decades.

Transactional conceptual thinking, combined with the actual networked value creation, is hard – very difficult. It’s about envisioning opportunities/issues, envisioning resources/ideas/abilities and envisioning how to put it into action. In other words, its difficult.

I have shared a number of thoughts on how, and what to build as an AI/technology knowledge distribution infrastructure, but suffice it to say the ‘digital transformation’ isn’t really digital transformation it is a shadow structure of a desired enterprise model (focused on optimizing people’s potential). Period.

I would also note just as some thought fodder that this AI infrastructure within this business model is, conceptually, like the additive manufacturing of organizational design. It approaches the organization from a granular perspective seeking to ‘additively’ build up productivity and desired outcomes.

Anyway. In order to optimize network value, the organization needs to fundamentally, continuously, change the way people THINK about how they produce & do business and encourage, and prompt, them to actually DO the change. Efficiency is easy to change. Optimizing network value explores HOW to conduct business to demand a change in beliefs, attitudes and mindset. This means the data and knowledge must constantly nudge reality perceptions because most ‘reality’ is driven by the resources needed at the time. Knowledge needs to “anti-hack” natural business heuristics which hide realities of ‘what could be.’ Managing what people will see informs attitudes and perceptions of reality and things change, perception wise, when prompted with new knowledge, then people change.

** note: some of the best thinking you can find on this can be found in OpenSpace/Beta philosophy from Silke Hermann and Niels Pflaeging. Read “Change is more like adding milk to coffee.”

I will note that an added benefit of a malleable organization (this concept was first introduced by Alvin Toffler in 1970’s Future Shock) driven by emergence is that it shapes itself to opportunities at different paces. The reality of any organization is each component in a system, people included, feel comfortable moving at different paces. So instead of demanding a consistent pace throughout the organization has different individuals, and teams, working at different paces – coherent in progress, but inconsistent in its pacing. While this may appear to be inefficient it actually not only increases effectiveness against any specific opportunity, but also makes the organization more resilient (anti-fragile) overall with an ability to absorb challenges and opportunities in stride.

Which leads me to organizational collaboration <which is a concept closely tied to network value>. Organizational collaboration, technically, doesn’t need to be led. Organizations should actually be more like an ever-moving Rubix cube in which at the appropriate time the appropriate pieces align to collaborate to resolve whatever needs to be resolved. All the squares are always in flux doing their own thing until the situation demands some pieces get together to be aligned.  Collaboration shouldn’t need conference rooms & meetings, but rather the culture simply breeds a belief when something needs to be solved you go find the best people (not best talent) to help solve it. Let’s be clear. That is simply wishful thinking. As organizations grow, they become incapable of natural collaboration; it becomes some version of forced collaboration. Once again, I have shared thoughts on this in the past and I believe in an emergent organization you can use algorithms, and knowledge prompts, to facilitate and nudge toward collaboration (but, more importantly, conceptually thinking).

Which leads me to enabling constraints. Network value creation is not some rugby scrum, it needs some constraints.

The first constraint is actually leadership. One could have read up to this point and believe I am suggesting a democratized organization, I am not. I am suggesting a malleable organization which demands some overarching leadership on 2 fronts:

  • Vision (or future planning): if you pick up “The Fish rots from the Head” (a fabulous book on board responsibilities) you would see what I am suggesting here at the Board level. I believe it needs to be embedded in the organization especially if you desire a more malleable network construct.
  • Team Guides: I, personally, call this position “unstuck leadership”. If you desire to have more random teaming you most likely need less random leadership. You need someone who knows the ins & outs of resource allocation as well as has avenues to critical decisionmakers at critical times.

I will say that there is a significant different between good coordination (coherence) and controlled coordination and the organizations seeking network value will find leadership, practices, systems and technology to enhance the former rather than the latter.

The second constraint is, well, possibilities.

Despite the fortune cookie wisdom that there are infinite possibilities, there are not. We may have more possibilities than we think we do, but they are certainly not infinite. In fact the possibilities in any given time and situation are quite finite in a variety of ways.

      • Time inevitably squeezes your possibilities quite often into an almost suffocating finite space.

      • Ability, or capabilities, inevitably squeezes your possibilities quite often into a fairly pragmatic sphere of finite space.

      • Context, or the situation itself, squeezes your possibilities quite often into a less than infinite, or maybe better said “a variety of different sized infinities,” choice space.

We do possibilities, with network value creation, a huge disservice by suggesting ‘infinite.’ At any given time, you, and the organization, are absolutely surrounded by possibilities. But possibilities do not always lie directly ahead of you or in the direction you face. Possibilities swirl around you in a multi-dimensional fashion.

Therefore, possibilities can reside in any direction.

Therefore, progress can reside in any direction.

But this is not infinite. It just may feel like it is infinite simply because of the complexity associated with context and what your mind can realistically grasp. I believe we would be much better served to admit that possibilities are finite to any given individual and even within a network <albeit the boundaries expand>.

In the end.

Underpinning network value will be 4 aspects:

    • Personal: people are a complex mix of generalist capabilities and interest residing in a specialist happy world. The world is usually good at rewarding the specialty skill a person offers all the while not rewarding the ancillary interest and skills often lying dormant within a person. In other words, the world is quite happy offering support to only parts of people and not the whole. I would suggest the most meaningful life is one in which the whole of the individual has permission to not only be exploited, but ‘used.’
    • Potential: people are walking vessels of untapped potential. Business almost dictates some choices which inevitably leave a significant portion of each individual’s potential untapped. Conceptually, any business that can permit an individual to tap into potential, or maximize potential, will benefit (while benefiting the individual).
    • Productivity: while it may be uncomfortable to say in a world shouting “you are not defined by your work” it would be silly to suggest our work did not define parts of who and what we are. Work, which represents a significant part of our lives, is an expression of a huge investment in time and energy. Therefore productivity, or our actual output, is one of the most tangible measurements of all that time and energy. I would suggest that if you maximize your potential not only does your productivity increase, but the quality of the productivity increases.

** note: quality of productivity can be measured on two aspects – actual quality of the output as well as quality of the input. What I mean by that is I, individually, will feel better or be more invested in what I produce if I feel like I have invested more, and different strengths/interests, INTO that production. It is not a big leap to believe that inner investment will translate into a better product itself. In other words, the individual productive incurs intrinsic and extrinsic value.

    • Progress: results are tricky. This is why gamification was/is so appealing. But we know from research that finite progress (milestones, sprints, etc) are a doom loop of chasing things in which people get trained to chase output instead of outcomes. People inherently gain greater satisfaction if they show progress – better today than yesterday, better tomorrow than today.


It is when a business can align all aspects it will maximize the potential of each person and network value.

Business, being business, has overthought network value to a mind-numbing level. Quadrants, mapping, team design, you will find dozens of books and articles showing you ‘how’ to tap into network value. Its almost laughable the lengths we have gone to do something I believe Ralph Stacey suggested back in 1992: “people, left alone, will more often do what needs to be done <sic>.” If you want to maximize network value, get out of your people’s way.




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Written by Bruce