Analyse any business network

How to instantly uncover the distinctive footprint of any business network

As we all know there are many different types of business network.These include trade associations, virtual supply chains and clusters, best practice networks and pure business networking forums.The label ‘business network’ lacks sufficient granularity to tell you what a network is really about.

To help a network operate better you first need to know what type of network it actually is.

A technique I have developed here is the business network grid which quickly produces a simple distinctive graphical footprint of a business network.

This signature can be used as a tool to engage with the network leaders around its future strategy.

There are two basic strategic moves for any network:

  1. Denser - Strengthen existing footprint areas

  2. Wider - Widen the footprint

So let’s look at how the technique works


The Business Network Grid Technique

Let's start with an example of a real network footprint:


Network Grid Example_525.gif


This is the footprint of a trade association who wish to develop more into a collaborative business network.

The footprint shows very clearly that the network is active across the whole Business Focus spectrum with companies in an individual (vertical) more than a collaborative (horizontal) style.

There is more cooperation happening between members on business development (they have a shared web presence).

The network's strategy is to extend this co-operation to business improvement activities also.

This strategy was chosen because the network's membership base lacks critical mass and it needs to be grown.

However if they follow this strategy they will be creating quite a large footprint and they must manage the risk of defocusing the network.


Business Focus

So on the X-Axis we consider the network's Business Focus

There are two ends to the Business Focus spectrum:

Extreme Left - Business Improvement which is internally focussed.

Extreme Right - Business Development which is externally focused.

There is also a point in middle.


Collaboration Focus

On the Y-Axis we consider the networks Collaboration focus


Individual Focus

At the bottom of this axis you have Individual Focus where the companies expect to meet with other members but not to collaborate with them.

As an analogy I compare this with being a member of a health club – you mostly go there to use the equipment not to meet other members (at least not whilst exercising).

This is sometimes referred as a “vertical network” as the relationships are primarily between the member and the network rather than between the member and the other members.

Typical activities in this kind of business network include running events with external speakers or engaging in broad collective lobbying for the whole membership.

Members mainly join the group to do things collectively they cannot afford to do individually just like the sports club – you cannot afford all that expensive sports equipment in your garage!


Group Focus

At the top end of this axis you have Group Focus where the companies expect to gain benefits for themselves through active collaboration with the other members.

As an analogy I compare this with being a member of a share dealing club – you mainly go there to co-invent and engage in risk/reward activities with the other members.

This is sometimes referred as a “horizontal network” as the relationships are primarily between the member and the other members rather than between the member and the network.

In the middle of these two you have Sharing Focus where members will engage in co-operative activities around operational issues such as problems, knowledge and resources.


Constructing the Matrix

Putting these two axes together you have a 3 by 3 matrix as shown earlier.

In the grid below I have named a nunber of the cells on the grid to highlight their main characteristics.

However remember a network's activities probably will extend across a number of cells!


NetworkFootprint_525.gif


Every network has a distinctive footprint

Large Footprint Networks often have better access to resources but may lack focus and suffer "mission drift".

Small Footprint Networks may be very focused but short on resources for getting anything done.


Size is not everything

So there is no right size for a business networks footprint.

However if you don’t know what size and shape yours is you are unlikely to be able to develop the right strategy for its growth and development.

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