To design a project ecosystem, is to design the ecosystem of the organisation?
(For those convinced that your organization’s ecosystem is to be designed, explore our vision in the second part of this blog post )
Introduction
The strategic importance of the enterprise ecosystem has been demonstrably proved. There are now numerous contemporary examples. Tesla is cited for its deployment engineering capabilities, “the way in which an innovative offer is deployed and the associated ecosystem” in the words of Christophe Midler. Indeed, unlike other manufacturers, Tesla considered the critical ecosystem of its vehicle and particularly its charging terminals. These terminals, installed and provided free of charge for a determined necessary amount of time, accelerated the diffusion and adoption of the vehicle, before their more recent monetization. The acquisition of Solar City by Tesla confirmed Elon Musk’s deliberate approach to connect activities across the ecosystem. In the same way, Amazon with Alexa, has made its voice recognition technology (embedded in a speaker) an entry point to the voice recognition platform of connected objects. This demonstrates a deep consideration of the ecosystem of the object and its capacity to integrate.
This approach is not new, previously Disney built its empire on a virtuous ecosystem, with careful consideration of the relationships between its core activities.
Current economics only further emphasise the importance of this approach, where “value chains” are no longer linear. Any stakeholder can now readily change or transform a network of value (Chanal). For example, Nest with the introduction of its connected thermostat catalysed new value through data management. And consequently cutting short this opportunity for traditional energy suppliers.
Rather than value chains, these are more accurately described as value ecosystems. In the case of Apple, as rumours grew that the company was extending outside its traditional domain towards a new area as manufacturer and maker of autonomous vehicles. This idea has now already reached our collective imagination. Inversely Tesla, is generating value as a platform technology akin to Apple, and absorbing expertise and capacity from the software industry. Tesla engineers are launching not just vehicles into production but inventing new features that redefines the identity of a vehicle*.
The ecosystem of a company remains a topic poorly mastered by our modern management systems. Today, few methodological approaches are available to practitioners to explore different hypotheses, prototypes or to formalise this key element of success for project performance and organization performance. And for good reason, these ecosystems are often complex and undefined.
Amongst the challenges associated with the design and formalisation of ecosystems, we have observed a central key point worth noting. Collecting, aggregating knowledge about stakeholders, their relationships (value flows) between the projects, offers and the organization’s point of view is not often recognized as a critical element, yet it is essential to model various scenarios and potential ecosystem strategies.
Amongst the challenges associated with the design and formalisation of ecosystems, we have observed a central key point worth noting. Collecting, aggregating knowledge about stakeholders, their relationships (value flows) between the projects, offers and the organization’s point of view is not often recognized as a critical element, yet it is essential to model various scenarios and potential ecosystem strategies.
Amazon approached Alexa’s voice recognition technology with a view of the user and the connected home. But by expanding the initial relationship between the user and the technology, they positioned Alexa as a core voice recognition platform for the home, rather than a connected object. The company created a “skills” framework that allowed smart devices to connect to Alexa. The easy to use framework has encouraged more and more appliances and devices to plug into Alexa’s ecosystem, in turn creating a virtuous environment which will see manufacturers compete to improve quality and lower prices.
Beyond creating a market and deploying new innovative offers, this ecosystem approach is useful
- To systematically explore value within their stakeholders’ ecosystems;
- To refine a deployment strategy;
- To utilise dormant technologies and patents; or
- To formalize an open innovation strategy.
And, finally to do so in a transversal and cross-siloed approach. For example, engineers working on a new aircraft will likely understand their supply chain expertise and are best placed to identify under-utilised knowledge. They should be engaged alongside the different parts of the company to bring user, supplier, technical and partner knowledge to anticipate new technology and business opportunities.
How to design your ecosystem?
At WDS, we approach the definition of the business ecosystem from two vantage points: management science and a design approach. One objective was to represent an ecosystem visually, composed of
- Stakeholders that could be categorised, weighted
- and their relationships mapped based on the flows of values (these reflect economic value, research or knowledge activities).
Four key elements to design an ecosystem, around your projects and its objectives.
1/ Define the boundaries and dimensions of your ecosystem
The boundaries of an organization’s ecosystem is defined by its stakeholders, specifics skills and knowledge, business activities and processes, which are based on the objects it has historically produced. As an example, an automotive company inherits a car-manufacturing ecosystem . Depending on the organization ecosystem’s boundaries needed for a given understanding, it might integrate stakeholders with whom there is not yet any activities or competitors… But more importantly, “an innovative design destabilizes the object’s identity and its related ecosystem” (Armand Hatchuel). Each project is therefore an opportunity to optimize, strengthen or change the organization’s ecosystem.
Put simply, the dimensions of your project or organization’s ecosystem and its value flows, whether it is the business, innovation or knowledge ecosystem (Valkokari), are impacted by the objects you produce.
2 / Decide on the ecosystem design, suited to the technology and market context
The ecosystem design approach will be approached differently if the technology is based on a rules-based design context or in an innovative technology context. In the former, knowledge of the stakeholders, the market and their relationships (flows) will be known and more or less shared internally. In the latter, in an undefined market with unknown stakeholders, the design will often be based on hypotheses.
In both scenarios, it is necessary to adapt the definition and identification of these stakeholders and their activities in the ecosystem (knowledge, activities, and roles), as well as alternative desirable scenarios. This optimizes the acquisition and management of knowledge related to the ecosystem, particularly in undefined or unknown scenarios.
3 / Progressively aggregate knowledge (or identity the knowledge required) to reduce risk and uncertainties.
This is a question of piloting both the structuring of existing knowledge about the ecosystem in a rules-based design situation (noting, some could still lack strong user knowledge), while formulating the knowledge to be acquired in the innovative design, which by definition could have no existing user needs or well-defined stakeholders. In this unknown context, it is useful to consider the various desirable contexts and applications of the technology, then potential stakeholders and needs.
For these potential stakeholders, yet to be defined, this could be:
- Define the role of the internal ecosystem and organization activities for the project, the knowledge and expertise which already exists and creates value, or should be transferred.
- Define the potential external ecosystem and the knowledge to be acquired, the specificity of the stakeholders, their roles, their weights and value flows around the contexts envisaged for this project.
The work of Xavier Lecoq and Benoît Mille (IAE of Lille) developed the RCOV approach which states “the business model is a filter of design and mutation of the ecosystem of actors” , the idea which considers the sustainable aspect of economic models within the ecosystem.
4 / Integrate strategic management in the design of your ecosystem and make it a tool for decision-making
Defining value flows and mapping the value from the different views of the organization is key to represent and design an ecosystem as a decision-making tool. This requires completing a systematic exploration of the different strategic scenarios of your ecosystem, in relation to your project. Whether it is to strengthen and optimize an existing ecosystem or to shape a new ecosystem whose uncertainties have been reduced by the acquisition of strategic knowledge. Different methods have been formalized, notably in France. For example, at the Centre de Recherche Polytechnique, the Full Value method of a project allows you to evaluate your flows of business, research or intangible activities which reconciles economic direction and risks inherent to innovative design. From the Mines ParisTech camp, the latest book by Hooge and Stasia intersects the economic value, strategic value and stakeholder adhesion of the project.
In conclusion
The formalization, prototyping and management of the business, research and knowledge ecosystems of organizations are a high value-adding playground intersecting the development of methods and the digitization of associated capabilities.
NB. At WDS, we are developing ECOS, a software that will bring together these capabilities for organizations and works to share data to improve the design of these ecosystem* between our industrial partners and clients. If you are interested, please do not hesitate to contact us.
*Automation of suggested value flow between stakeholders & stakeholders via the database integration and the development of appropriate semantic graphs; the suggestion of activities and the development of artificial intelligence and design assistance that builds on the digitization of engineering and data science. This requires a strong working knowledge of your ecosystem of stakeholders and their flow of value.
