Page 235 - Performance Leadership

224 • Part IV Implementing the Performance Leadership Framework

Table 12.2
Key Characteristics of a Performance Network

Transactional Added-Value Joint-Value
Relationship Relationship Relationship
Strategic focus Standard products Adaptive customer Cocreation, joint
and services focused solutions value proposition
Scope Enterprise Supply chain Extended enterprise
Stakeholder Different Aligned Shared
objectives
Switching cost Low High No switch possible
Power balance All power balances Improving power Neutral,
balance between interdependent,
unequal stakeholders, building joint brand
where the dependent preference
stakeholder builds
brand preference and
tries to increase
switching cost.

no clear understanding about the level of a relationship, there is most
likely also little trust, especially when the behavior of one party doesn’t
fulfill the other party’s expectations. The parties need to agree whether
they have a transactional, added-value, or joint-value relationship.
With organizations being structured as networks, and business mod-
els aimed at collaboration within the network, managing the relation-
ships between the stakeholders becomes a strategic part of performance
management. Understanding the relationship, sharing information,
reciprocal metrics, and a trusting relationship are the key components
of managing that relationship.
In summary, Table 12.2 describes the key relationship characteris-
tics of a performance network.

Transparency

In a performance network, there is no single CEO who hands out the
marching orders that are then cascaded into the organization. Unless
there is one dominant party in the network of business partners, there is
no clear command and control model. Creating and sustaining business
performance is achieved through communication and collaboration.