As someone who works for a leading global professional body dedicated to delivering public value to society on behalf of its members, I’ve been thinking about the notion of networks, what it means and whether the emphasis should be around going beyond the notion of mere networks and building communities with a strong sense of ownership by its constituent members supported by active engagement and dialogue.
Numerous businesses have built themselves formidable networks with their customer base but could be missing out on significant advantages in evolving those networks into communities.
Wenger, Trayer and De Laat, (2011) have provided clear definitions illustrating the differences between a network and a community:
“The network aspect refers to the set of relationships, personal interactions, and connections among participants who have personal reasons to connect. It is viewed as a set of nodes and links with affordances for learning, such as information flows, helpful linkages, joint problem solving, and knowledge creation.
“The community aspect refers to the development of a shared identity around a topic or set of challenges. It represents a collective intention – however tacit and distributed – to steward a domain of knowledge and to sustain learning about it.”
Distinguishing a network and a community
A network is inherently a passive set of relationships and connections (normally anonymous) between individuals, which is geared towards only information flows, and transactions across the connections. Networks tend to be primarily transactional in nature (mainly through the consumption of services and goods) with little by way of value creation.
Communities on the other hand lend themselves well to action and intervention by individuals who are connected around a shared identity, philosophy or collective intention. Communities tend to inspire a sense of camaraderie and collective action by the participants who belong to it.
What this means for businesses
Companies that successfully are able to develop and build on their networks and transform them into communities will be able to not only enjoy the scale afforded by networks but also improve the level of dialogue, engagement and sales which in turn improves the margins, leading to better business value.
Networks = High volume X Low margins (due to mainly transactional nature of mostly one way transactions)
Communities = High volume X Higher margins (due to improved dialogue, satisfaction which in turn leads to higher sales and possibly margins)
If we consider the largest companies in the world such as Amazon, they don’t merely seek to develop a large customer base who go to them to buy the products they seek. Instead they have invested significantly towards developing communities within their sales platforms, leading to improved two-way dialogue, and encouraging greater sales of a larger range of products.
Facebook has gone beyond simply creating networks and their initiatives such as “On this day” and “Friends’ Day” are all geared towards engaging their networks towards a more meaningful community, to imbue a sense of camaraderie and fellowship amongst their users. This is what will support the longevity of a social network like Facebook and ensure they avoid the mistakes made by the likes of MySpace and FriendsUnited, which did not seek to go beyond the creation of networks.
Superior organisations take the networks they have, understand the key propositions their networks seek, develop their messages further, engage them better, enhance the levels of dialogue across the participants of the network, and in the process form the basis of a community that will sustain the business towards long term value.