Week 26, 2022—Issue #210
Business Ecosystems: Growing Interest, Shifting Mindset, and New Operating Models.
Each week: three ideas to help you build better organizations. This week: those ideas are all about business ecosystems. (Originally published in the WorkMatters newsletter on July 1st, 2022).
The BCG Henderson Institute (BHI) recently published an article titled Are You Ready to Become An Ecosystem Player? It’s a long but worthwhile read.
Highlights are as follows:
1. Growing Interest
The interest in business ecosystems is growing; most large companies have already ‘seriously engaged’ in ecosystemic business models.
This is not a surprise. After all, most of today’s unicorns are platform businesses and it makes sense many would find inspiration in their success. But let’s be clear: powerful as these platforms may be, they alone do not equate to billion-dollar valuations! It’s the business ecosystems — i.e., “the dynamic group of largely independent economic players that create products or services that together constitute a coherent solution” — that is the real innovation. Platforms require ecosystems to work, but as organizations like Haier have clearly shown, ecosystems can work without digital platforms
2. Shifting Mindsets
Ecosystemic business models demand a new mindset; specifically it demands that we rethink our approach strategy and competition.
The distinction between platforms and ecosystems means that organizations wanting to explore ecosystemic business models must think about more than just technology — they must reimagine themselves as ecosystem orchestrators. This isn’t easy and requires the rethinking of established beliefs. The BHI identifies four mindset shifts that need to take place: Orchestrators must emphasize innovation over efficiency; they must focus on the customer rather than organizational needs; they must work to create rather than capture value, and they must choose to collaborate rather than compete.
3. New Operating Models
Ecosystemic business models demand new operating models — models that emphasize agility and experimentation over efficiency and control.
But that’s not all. To-be orchestrators will also need to put these new mindsets into practice. Traditional command-and-control systems must be replaced by management and operating models able to continuously sense and respond to environmental change. New digital skills and capabilities are required (this is where the platforms come back into play), as are new organizational structures — structures that provide fledgling ecosystem initiatives with levels of autonomy that are contextually appropriate.
“We are still in the early days of the ecosystem revolution,” writes BHI. I think that’s true. Project Management went through a process of professionalization in the 1980s. Innovation Management is undergoing that same process right now. Looking ahead, I suspect Ecosystem Management might be next.
That’s all for this week.
Until next time: Make it matter.
/Andreas
How can we build better organizations? That’s the question I’ve been trying to answer for the past 10 years. Each week, I share some of what I’ve learned in a weekly newsletter called WorkMatters. Subscription is free. Back-issues are published to Medium after three months.
