Ecosystems are under-deployed or even misunderstood in business. Ecosystems are certainly growing in our jargon to describe something we think we want to achieve, but we fail to recognize many of its functioning aspects or needs to realize it. It is being offered simply as a buzzword.
The business ecosystem is an important business model you can deploy if you are having higher levels of complexity and growing uncertainty, and let’s be honest who doesn’t today? It can also be a way to reach out and have engagement and traction (Facebook, Airbnb, Uber, etc.)
When you are in the pursuit of having the best highly coordinated and geared to optimize performance such as a global supply chain, it is the complexity and integration that needs governance and the utmost attention to the detail and the flows. These are brilliant to “shave” costs, time and are working in predictable market conditions.
Yet as we are witnessing presently, with the Corona Virus contagion, they can quickly unravel and become a real 24-hour nightmare to resolve. Suddenly all the carefully orchestrated parts, highly connected and in a complete reliant supply chain, totally dependent on each other. The optimization of the model gets shot to hell.
Ecosystems are more initially loosely designed; they have governance structures and where the orchestration needs to be more open. It has rules and requires a flexible, evolving design. Still, it is the value that lies in exploring and then exploiting the opportunities of the connectors and the richness of the data that needs interpretation. Often you are looking for the unpredictable, a new idea, for example, or making connections between different parts of the network to explore a new concept that needs the diversity of these opinions. Then finally, it is the ability to interact in the real world of exchanges that you see a “raw idea or insight” so you can quickly translate that and share this across your ecosystem or network.
Ecosystems need to be sustaining, and that is where data and insights come in, they feed into opportunities and push out the frontiers that need exploring
Why do I title this “Let’s create and rejuvenate with Ecosystems?”
Any ecosystem has to be carefully nurtured; it needs balancing, a shared value, otherwise, or it will eventually die. Why I like ‘ecosystem thinking’ in the business world is its very nature, it can shift us from linear thinking into more holistic. A hybrid that mixes and interacts to get the best out of a system. It needs a richness of diversity to come together, that ‘combining effect.’
Why ecosystems have come of age in the business world.
To explore and exploit ‘the new,’ we have the opportunity to combine technology and leverage relationships to extract ‘greater’ meaning. Building a network of contacts, we are scaling and developing a more productive potential of something new. We can, through data and exchanges, link up the real world and relate the physical and data worlds. Actually, we are building a digital-physical twin as we understand what is going on, explore how we can change it, and then compare this back in the digital world, that mapping back for all participants to work upon and extend it out. We are creating value in combining technology and relationships in any ecosystem design.
The ability to delve into or broaden out our thinking gives us these opportunities to extend what we have or create something new. In any ecosystem evolution, ‘something’ or ‘someone will exploit a gap, a niche, and utilize this. It takes time if it cannot build on its capabilities in that space, it needs to build up its environment around it. We often limit our capabilities and capacity because we do not ‘stray’ from the knowns into the unknowns. Ecosystems that encourage that pushing frontiers to lead us often to finding that unexplored point. The combined realms of digital and physical meeting points allow us to do this in faster ways than ever before. We can reach wherever we want to go.
The rejuvenating of the existing
So much of what we know today needs rejuvenating, it is tired, outdated, or just solely not up to the job. Let’s take the energy system across the whole world; it needs rejuvenating and the creation of new things. I write a lot on the energy transition as it is one of those prime places where ecosystems will take hold to provide a different (hosting) environment that we need to overcome multiple problems and break down complex issues through new innovative ways.
So I think Ecosystems are not a new phenomenon, we all exist in “nested” ones but within the business world we are in danger of not understanding its important differences; they can expand what we individually know into a connected world of understanding, then all the new opportunities that have yet to be discovered or leveraged can emerge and become part of the evolutionary process.
I liked one comment made by BCG recently. It was in their describing ecosystems as the digital-physical intersection and, as such, this offers such fertile ground. It is the understanding of how to design the ecosystem and then orchestrate or manage one, within a business or social environment, that gives it a different set of dynamics to realize new business opportunities.
We need to seek out the dynamic effects
The “dynamic effect always catches me” as something that offers more significant potential. So much of what we do operates in static environments, those repeating systems that seem exciting as we’ chip away’ at shaving extra minutes off a process extracts more from time, but they rely on being linear, they can’t cope with exponential growth or sudden change or disruption. We so often get caught up in designing for certainty, and eventually, the forces of inertia take over.
We need to push harder on the “forces of change,” and it is technologies, networks, and creating dynamic environments that can bring this about. If we only model what we know, we will increasingly get caught out. The ‘flow’ needs to feed the ‘stock.’
What allows us to ensure that new flows keep building the stock are some unique aspects that technology has delivered. We can achieve a more seamless and expansive environment that can scale continually through connecting our digital and physical worlds. We can explore and satisfy the curious, and we can provide more insights and satisfaction to a broader world.
Tackling more of the unknowns surrounding our business
We certainly are in a time where the unprecedented or unpredicted is happening far more often. We need to have in place different structures to react and work within these periods of uncertainties better than we have been doing in the past. Ecosystems of established relationships allow this, as they respond to changing environments faster. Take the sharing of gene data to tackle the coronavirus, for example, where laboratories around the world are sharing their work to find a solution to a global problem.
We are learning to accumulate and analyze more than ever before, and we need to spread what this means, to improve on the existing. Finally, we are in the world of recognizing when we add to a well-designed system; we are entering the land of potential zero marginal cost in shared understanding; the more we have a higher series of activity, the more our ecosystems are attractive, the more we can potentially learn. We can all gain from this “positive network effect.”
The effects of ecosystems and engaging networks
That “network effect” if well designed and managed gives us this opportunity to create and rejuvenate within ecosystems purposefully designed, and that is why I get excited about this area of design.
We do need to appreciate what we have, but so much of our world today needs rejuvenation firstly, and we need to combine all that is ‘out there’ to explore and exploit what is possible in what we have.
To do that, we need these ecosystem designs to flourish, but let’s not apply them to the wrong need of repeating and extracting. To create something new, we need to design the ecosystem purposefully but always with some specific levels of intent or suggested value proposition, and then be ready to see where this goes as ecosystems are an evolutionary process of discovery.
****The work of BCG in Ecosystems has been a source of inspiration here.