Network research pioneer Kristian Möller had a eureka moment up in the air
A simple and logical way to categorise business networks was born during a flight.
On a flight to Stockholm in 2001, Kristian Möller, then a professor of marketing at the Helsinki School of Economics, was outlining a solution to a difficult problem with pen and paper. What would be a logical and simple enough way to categorise business networks?
‘After sketching for a while, I saw the solution right in front of my eyes – and it was even simpler than I had thought,’ Professor Emeritus Möller recalls. Möller had become interested in network research a few years earlier. It challenged the mainstream view in marketing research, which saw businesses as merely part of the faceless market, with competition the only driving force behind development. Network research, on the other hand, emphasised the relationships and cooperation between businesses.
During the flight, Möller realised that networks can be placed on a continuum according to how precisely defined their value creation logics and value activities are. Do they have well-established products, partners, technologies and processes? Are they still developing these, or are they somewhere in between?
‘At the left end of the continuum are well-established business networks. The main company in the network is like a symphony conductor, directing the members of the orchestra. The musicians – that is, the partners, suppliers, distributors and core customers – are virtuosos in their own fields. The business networks of Toyota and Ikea are prime examples of this,” Möller says.
The networks at the right end of the continuum can be compared to a new music genre, he says. Just like a new music style, a technological innovation has to break through, and the developer must be able to mobilise partners and investors. There’s a lot of uncertainty in these kinds of innovation networks. There’s also the risk that the network will be unsuccessful, meaning that the innovation fails to take off.
Networks at the middle of the continuum are concerned with the gradual renewal of the value creation process. Multiparty project networks are typical, tasked with improving the established value network, its business processes, and product and service offerings. This logic is also followed by large-scale construction projects and systems design.
Boosting, envisioning and inspiring
After the breakthrough, Möller and his colleagues focused on network management research. ‘Different types of networks have to be managed in different ways,’ he says.
In established networks, the main company must be able to boost the entire network and leverage a strong brand to attract desirable partner companies to the network. In innovation networks, the focus is on the ability to envision and create development agendas and engage skilled partners.
Several research groups have grown up around the network research carried out at the Helsinki School of Economics (HSE), which merged with two other universities to form Aalto University, and at other Finnish universities. The topic has spawned dozens of dissertations and scientific articles, and Finland has become one of the top three countries in business network research.
The results of the research have been adopted both by businesses and public sector, thanks to university education and the wide-spread cooperation between research institutions and the business world.
Text by Anu Vallinkoski