Ecosystems in our business thinking have suddenly become of age, they can enable cross-cutting innovation to be delivered in highly collaborative and dynamic ways. Understanding the value of working within an ecosystem is becoming critical to understand.
Ecosystems can offer, through collaborating on a shared platform, closer relationship with cross-industry partners and more importantly, the final customer.
Sharing, exchanging and deepening the understanding of different needs and experience through increased collaboration, and engagement opens up innovation to a whole new dimension of more radical innovation. We are seeing a shift in innovation cooperation with this ecosystem design approach and we are all working through the implications of this from a process, structure, architecture and design point of view. It changes our internal perspectives and opens these up to a diverse external influx of knowledge and different understanding.
The more we are connecting and collaborating, seeking out joint opportunities for business, there is this realization that there lies a really powerful network effect for value-adding in participating in these ecosystems, for finding and sharing in new economic opportunity. This calls for some radical rethinking of the existing business and deciding the design of the future business.
The shifting from the current state to the future designed state is no easy task, it requires a transformation in thinking, mindset, processes, and structures. It requires a radical redesign of the organization, as it significantly increases complexity, where “going fully digital” becomes the critical enabler to enable this shift. The prize is to achieve a more radical innovation that gains a real competitive advantage, that is more sustainable due to its unique connected difference, as it connects more into the consumer’s needs and takes a brand into the realm of associated experience and personal identification.
This is a very different business model for all involved.
The business model becomes significantly different. It is more complex and is built on sharing reward and collaborating, recognizing different partners bring different skills and expertise to the table. If you participate you gain a competitive advantage, with the real potential of locking others out but you have to accommodate multiple views. You gain in sharing costs and risks, learning to collaborate with other parties not competing in your initial space but looking for collaborative ways to build a new competitive edge together as they are complementary. This is requiring more cross-collaboration in the need for finding solutions that are mutually interesting.
Often, within these new designs, based on ecosystems of partners, there is a significant upfront investment to figured out and be ‘highly adaptive’ as it evolves, as each is a unique design that is based on a complex design to deliver a radically different end-product.
A new innovation architecture is required.
We are witnessing a very radical change as we work through ecosystem designs. The solutions are driven by technology, increasingly disrupting and breaking down the past traditional boundaries and market positions of many incumbent organizations. They are ‘forced’ to open-up and exchange if they want to push any radical solution design.
In the past, positions were mostly those built to defend internal intellectual property and then to ramp up so as to achieve and maintain economic scale. There is a new economic logic to build out on shared IP as this offers an even greater scale through technology design, it involves greater complexity, yet its value proposition is to strive towards offering greater customer experience and satisfaction. The solutions are valued far higher, in social and economic value. We need to recognize this is a new business model design with the arrival of engagement platforms that connect all the ecosystem of partners in its design, to look for a highly collaborative design, based on a shared vision, so as to gain this scale and value on the returns these investments require.
A new economic logic that get closer to the connected customer expectations and daily needs for innovative solutions to solve, in ways far better than those that are being presently being offered. They engage and connect in dynamic time. Connecting technology, digital and human understanding is bringing radically different solutions. A different innovative design has become paramount to these new offerings so they can be capitalized upon, releasing this increased value creation understanding, of opportunities and solving needs.
Market Dynamics are also changing
The market dynamics are also changing; we are seeing greater disruption and blurring of traditional boundaries, where competition is coming from different directions than in the past. There is a growing reality is that innovation systems, structures, and processes are badly lagging, in design and approach, to react and respond to this new dynamic and global order. A dynamic where the start-up can undermine the established incumbent, mostly large organizations that are less nimble and agile, in radically different and dramatic ways. We are in the age of short time frames, from the pilot, testing to scaling those solutions, moving them from local to global through the power of technology applications. Large organizations need to adapt to this or die at ever-increasing speed and agility.
Certainly, we have seen innovation thinking advancing but most of its processes, systems, and structures have been designed for a different time, the old era of stable markets, predictable solutions and having a clear sense of your competition. It has been a linear world. All that has changed dramatically. We have all been trying (very hard) to stay relevant in an ever-increasing uncertain, highly adaptive world, applying solutions left over from a past era and this is not working anymore. Something has had to suffer, and I believe this is our innovation outcomes, that are not shifting the growth needle as we keep our innovation systems and thinking trapped in the 20th-century mindset. Mostly the solutions on offer have been largely incremental improvements, that have not galvanized our imaginations.
Yet the world is changing. When you look at some of the collaborative platforms we have recently seen, for example, the smartphone, on how it radically altered the way we now communicate and live. We have seen the growing influence of having a ‘digital twin’ in our manufacturing environment to raise awareness, explore scenario’s and anticipate potential problems. We are beginning to appreciate the value of smart cities, autonomous vehicles, and entrepreneurial start-up spaces, where the application of ecosystem collaboration has realized real changes to how we undergo business and living. The effect of industry 4.0 becomes a connected ecosystem of machines and humans working to deliver a different era of collaboration. These are all requiring ecosystem thinking and design.
We need to bring innovation and its process up to date.
There is so much going on around innovation we need to equally think of updating our design of how we go about innovation. With cognitive computing, artificial intelligence, cloud-based solutions, purposefully designed apps and specific tools and frameworks, we do need to begin to stretch our imaginations further and flex our technology and app solutions more towards providing a better, more connected innovation process. I want to see a new innovation era happen. There is so much promise in the cloud that would help innovation to be adaptive, flexible and designed specific to the challenge being faced.
Everything has suddenly become more dynamic and this has enabled the pace of innovation to speed up for exploiting breaking opportunities. Technology has enabled a business to scale up quickly, partly due to risk-sharing in technology exploitation and partly in these exploratory forms of partnerships. Collaborative insights have enabled businesses to explore spaces that were previously unable to be unlocked, without this greater collaboration and diversity in (solution) competencies. The business landscape has opened up, providing the potential to explore very different value opportunities but these are ‘connected opportunities’ where collaboration and co-creation are central to new solution offerings.
Knowing your design is always going to be unique, you can’t simply copy.
Each organization involved will need to develop their own innovative business model to meet the specific needs of the opportunity identified. Each ecosystem will more than likely have different partner enterprises. If organizations themselves have not got into this “ecosystem thinking” yet they are in great danger of seeing rapid reductions of their position in the marketplace. Emerging markets are ecosystems, they are more specific, built on real consumer need and will have unique features built into the local or global needs.
It is identifying the critical capabilities and being adept and agile enough in learning from these, to embed them into the changing culture. There is a critical need to be technology savvy, digitally adroit, highly analytical and fast to make the connections, to explore and exploit the ‘breaking’ opportunities. We are having to adjust our learning to have increased levels of higher human-centered approaches, through exploiting design thinking, to learn and adapt.
Each of us has a part to play in how we redesign our thinking around innovation.
We need to radically alter our thinking and redesign innovation if we accept that ecosystems and platforms will form a far greater shaping role for our innovation outcomes
Ecosystem thinking can have a very transforming effect. It opens us up to a highly fluid, changing world of possibilities full of interactions, sharing, and exchange. It can help allow you to match and possibly get ahead of all the volatility swirling around us. We can develop strategies built on emerging knowledge and innovations, that can grow out from a collaborating community.
The traditional confines of market boundaries are clearly breaking down and reforming around these ecosystems and platforms that connect partners and consumers in dramatically different. It is these Value-added ways, and that ‘intent’ is driving a radically different environment to manage within, one of building knowledge ecosystems, innovation ecosystems and business ecosystems that connect up and form the interconnected parts of the required ecosystem design.
I believe ecosystems are the new organism of the business world to catalyze innovation. We need to consciously design these in new ways.
**This article was first published by the Future Shapers earlier this year.