Value Modeling tool: mapping uncharted ecosystems

Companies everywhere are becoming more radical in their approach to innovation. Instead of just moving on to each next product, they’re looking at new ideas in existing and related markets. However, this also means exploring unknown territory. How to do this effectively and guarantee the best results?

Philips Innovation Services, Industry Consulting has created a unique Value Modeling tool, based on the Value Framework, as presented in Elke den Ouden’s book Innovation Design.* This allows faster innovation through rapid analysis of Value Networks, which prompts teams to take an external view and visualize their findings for easy sharing and in-depth discussion. Using Value Networks in innovation projects has proven to increase the focus of innovation teams. At various stages of the innovation process (e.g. visioning, start of development, launch) this approach provides a clearer view of the ecosystem of which an innovation will become part.

Vision on the Value Network

“Innovation brings uncertainty,” says Rob de Graaf, Senior Consultant Product Innovation. “One way to deal with this is by using Value Networks that display the ecosystem for an innovation. We don’t just locate stakeholders; we also map their interactions. We also map their degrees of influence, attitudes and motivators. Understanding the environment and behaviors of key players means you can innovate more radically. Often, the stakeholders in the Value Network aren’t directly active in the target markets, but play a role in the background. There might be NGOs, for example, that you need to speak to.”

“Having a shared vision on the Value Network helps uncover and verify assumptions. It allows you to identify the right positioning of the innovation. In practice, we’ve discovered that at the start of an innovation process, everyone has a picture in their mind of the ecosystem. However, nobody ever seems to draw that picture and share it with others. This is a good point to start mapping out the Value Network. We often see processes get stuck at an early stage because people are making assumptions, without even realizing they do, and not discussing these. Our approach helps identify and verify these assumptions and close gaps.”

Application throughout the innovation process

“In one project, the vision turned out to be strongly focused on what the organization wanted to achieve. However, they hadn’t taken the wider needs of the ecosystem into account, which became visible with the Value Network tool. This allowed the vision to be adjusted accordingly. For another project, the Value Network tool showed that the organization wasn’t directly connected to the most influential stakeholders. This resulted in a repositioning. For yet another project, the Value Network showed information flows and product flows were completely separate. Integrating these would allow a new opportunity to be seized and relevant parties to do so by means of open innovation could be identified.”

“Real innovation means exploring uncharted territories. Unlike the first explorers, who had little to go on, except their observations and assumptions, this tool allows us to map the valleys and mountains! However, merely having access to the Value Network tool is not enough. The real value is generated through thorough analysis that Industry Consulting provides for these projects.”

Andrew Bower, Senior Consumer Marketing Manager at Philips Consumer Lifestyle, Mother & Child Care has experienced the benefits of the tool for his innovation project: “With the Value Network tool, Industry Consulting helped us to clearly identify where we sit in the value chain, who the critical players are, and how we evolve to have a stronger presence. A simple but effective tool in mapping our Value Network.”

Image: An example of a “From Value Chain to Value Network” approach including all identified stakeholders

*Innovation Design – Creating Value for People, Organizations and Society, Springer (2012)

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