--- layout: post title: Value networks description: A quote from Clayton Christensen's The Innovator's Dilemma explaining value networks ---
The concept of the value network—the context within which a firm identifies and responds to customers’ needs, solves problems, procures input, reacts to competitors, and strives for profit—is central to this synthesis. Within a value network, each firm’s competitive strategy, and particularly its past choices of markets, determines its perceptions of the economic value of a new technology.
These perceptions, in turn, shape the rewards different firms expect to obtain through pursuit of sustaining and disruptive innovations. In established firms, expected rewards, in their turn, drive the allocation of resources toward sustaining innovations and away from disruptive ones. This pattern of resource allocation accounts for established firms’ consistent leadership in the former and their dismal performance in the latter. (Clay Christensen, The Innovator’s Dilemma)
Value networks are what drive a firm’s decision-making process, not managers or CEOs.
These values are embedded in the corporation’s entire structure, employee ethos and ambitions, talent selection, promotions, etc. A CEO who goes against his corporation’s value network is going to have a hard time having his new and ambitious plans implemented.