Defining Ecosystems in Industry

In a recent exchange, actually, on twitter, we were discussing definitions of platforms for IoT or IIoT. This was to shape a story to be told. We got into the “how” to position them and in these exchanges, we eventually arrived at the question of Ecosystems, of “What defines ecosystems within an industry?”.

There is growing value in engaging in business ecosystems and let me offer the “why” and move you through the “what” towards the “how.” I felt it needed my “take” on defining Ecosystem design for Industry.

The present growing use of the word “ecosystem” has been born or borrowed (for industrial use) from ecology but it is not appreciating the understanding as well as it should do. We in an industry do need to understand this, embrace it and interpret it in this ecological way, or design the Eco-friendly intent in a clear, game-changing way, that allows us to move forward at higher increased rates of change.

So the issue is what does make up an Ecosystem and make it stand apart and be valued for what it brings.

Ecosystem design is about being open in all potentially valuable proposals and co-creation possibilities and finding the opportunities to engage openly, in collaborative forums you can trust and execute your thinking and needs. It is using multiple platforms as being part of a very different future design. You go where the best collaborations can take place not just get locked into one. You look to connect and collaborate as broadly as you can. It is seeking out diversity, experience, and new insights you not only grow but those within the community grow with you.

So I was asked, among others “What is your definition of an Ecosystem? IoT Ecosystem?”

There is this increasing recognition that most business organizations are in need to form both new and greater connection into diverse ecosystems, for exploring and extracting fresh knowledge and sources of growth. Ecosystem thinking is offering the exciting potential of new pathways to a greater ‘connected’ innovation, certainly expected today from consumers, ones that give solutions of value to the consumer and solve complex problems

Yet the understanding of what this means in commitment and structuring has some clear implications behind it. It becomes hard to define ecosystems.  Managing in ecosystem arrangements I feel requires a far greater understanding of the potential design so you can achieve a more robust, open, dynamic and highly collaborative environment.

Let’s point to a few overarching reasons for moving towards an ecosystem mindset in your thinking

  • Ecosystems will have the potential to expand capabilities and enable experiences beyond anything possible today in the present world that most of our business organizations operate in; ones that are very open, directly opposite of many of them today, operating in their own ‘disconnected’ world, internally focused, constrained by limited technology connection and  hampered by limited resources.
  • Ecosystems open up the world. They connect it for a richer access to diversity and different sets of discoveries. These are not possible within one single organization’s current capabilities or capacities. It is giving access to highly collaborative and interactive ways to explore new possibilities.
  • It is by this very nature of opening up and interacting that you are building a growing interdependence in relationships, that is driving the new innovation potential; one that is vibrant and dynamic. One, that is looking to create and explore new business value by acting together, finding common purpose, that offers a potential for outcomes to be greater than the sum of the individual parts.
  • As our world becomes more complex, ecosystems offer ways to coalesce around those sort of challenges, that can be highly complex and unable to be solved by one entity alone. Challenges that bring together, within the ecosystem community, the potential to build, solve, share and exchange around goals, combine experience and knowledge, to build concepts that help solve these complexities,  achieved in ever-increasing highly collaborative ways.

I wrote a fairly long piece on constructing the building blocks of an Industrial Ecosystem

If you have the time or interest it is here “the building blocks for managing within an ecosystem design.”

I finished this with

“Collaborating gives the potential to create a different unique competitive position that others will find increasingly difficult to copy if they are not able to find the network effect that comes from working within platforms and ecosystem, where innovation becomes significantly different and seen as highly valuable”

Ecosystem design will create new business opportunities. We need to make the business case

We are faced with a number of principal drivers of change, that I believe we need to consider for deciding upon in any decision to actively participate in business ecosystems. These are:

  1. The constant exponential of technology and its power to change is forcing up to change.
  2. The need to search and create new business models needs to be explored differently
  3. The shift in value chain building (e.g products to connected services) needs greater connections
  4. Moving from the present core into new industrial areas and geographical reach is becoming essential to navigating.
  5. The need to scale and increasingly be seen as global or very local (glocal) is a pressure point not to be ignored
  6. The increasing need for collaborating and extracting external expertise contains increasing cost and investment.
  7. Demands by customers are shifting to expecting customer experience and engagement that we must provide
  8. The need to channel your resources into more productive value-added activities is essential as ‘good’ resources are growing in scarcity.

So how do I define an Ecosystem Design for Industry?

Not by giving an impressive list of services, technologies, showing your IoT stack against someone else, suggesting those platform vendors and their partners are able to solve your problems. Of course, these will do a job but not the best job of the underlying value, the need and recognition of the opportunity that Ecosystems, in our thinking through can be well designed, to offer significant new value opportunties within any business. You need to work within a federation of ecosystems to get the best out of all those in different ways that solve your multiple problems and needs.

Let me offer my litmus test.

If you can see the potential by answering these questions or statement, you can begin to define your understanding of what an Industrial Ecosystem should mean or deliver in fresh outcomes. If it achieves these or can get you to see the new potential, then you can gain growing confidence that Ecosystems are increasingly the way to evolve your business.

The potential impact of engagement has a range of benefits that need exploring and answering thoughtfully. I recommend you map back to what you currently have and see what we can actually have in thinking about Ecosystem design in new co-creation and collaborative ways to advance your business.

  • Ecosystem configurations enable the (one) business to offer more value to customers
  • They attract, more often than not, new customer bases to go on top of the traditional base
  • Ecosystem designs enable the business to create entirely new and different business opportunities
  • The growth potential can improve being part of a “network effect” due to new propositions
  • Structuring organizational design to leverage the value of collaborations gives greater flexibility
  • Contributing your part to a bigger ecosystem design allows a depth of focus on the activities you do well
  • You gain the ability to share market risks within a partnership of collaborators, committed to a shared vision and pursue new business opportunities that you could not afford on your own.
  • You grow your capabilities as you co-evolve, align future investments and find mutually reinforcing and supportive roles to exploit opportunities.
  • Ecosystems force you to become more proactive to thrive and perform, to master greater sophistication and complexity.
  • The potential impact with customers valuing these connected experiences and being able to participate, engage and contribute opens-up value-adding potential, using collaborative trusted spaces.

As you open yourself up to collaborating, you open yourself up for greater learning. It is from this insight you can reshape your business design to adjust to this changing reality we are finding within a business; one of that need for designing our business into business ecosystems, to offer greater and sustaining growth, resolving greater complexity but offering radically different value into the market to benefit client or customer needs.

Do not get “trapped” in one solution offering at the platform level, elevate your thinking up to this ecosystem-thinking level to understand all that is required to manage within your environment and appreciate what needs to be connected, relied upon and supported to make it a thriving ecosystem, well designed.


****Useful Site References to Understand My Ecosystem Journey Build

Are you thinking about Innovation Ecosystems? You Should

A Statement of Ecosystem Intent Inside Our Business Enterprise- the CEO letter currently missing

The Emerging World of Connected Industrial Ecosystems

Rethinking the Value of Business Ecosystems

Adjusting to the Changing Landscape of Ecosystems

Nurturing the Network of Firms within Innovation Ecosystems

Are you ready to thrive in a world of Innovation Ecosystems?

Opening up our thinking towards ecosystems has a powerful effect

The Building Blocks for Managing within an Ecosystem Design

One thought on “Defining Ecosystems in Industry

  1. Pingback: Entering 2019 – What Do Each of Us Need to Focus Upon? | Paul4innovating's Innovation Views

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