Value Designing

Ecosystems are really important, are we correctly applying them in Business?

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I have been reading the Ecosystem Restoration Playbook – a practical guide to healing the planet, developed for World Environment Day 2021 to kick off the United Nations Decade on Ecosystem Restoration (2021-2030)

I do like the explanation of Ecosystems, lifted from the restoration playbook (see below). There is some real contradiction to how business applies the ecosystem thinking, and this post attempts to look at the differences and implications of treating ecosystems differently. This use of “ecosystems” is degrading as much as we are in our Natural Systems, mostly in the eventual resource depletion and our insatiable consumption.

By taking this business thinking of Ecosystems into continually pushing for greater consumer consumption is a growing problem. We are at a time when we need to place a break on this, and take a different position of replenishing or restoring what we have, and reuse it. With our drive for continued growth consumption and exploitation, we are compounding our planet’s problems.

I wanted to explore some differences within Natural Ecosystems and how Business uses Ecosystems to search for growth, scale, and dominance. We are in need to change our consumption habits and business growth models.

This is not a definitive list. It is more to stop and reflect where we are heading on applying ecosystem thinking, perhaps addressing its accepted context or adapting it to fit its new one being push in the business world.

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Reshaping the core of your business through a focus on Sustainability

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If the decision is made to become more focused on “being sustainable”, drastic shifts in direction will undoubtedly occur.

The shift from that fear of being disrupted due to the digital transformation is being replaced by the need to build a sustainable company built on increasing insight and connected understanding, seeking and exploring, experimenting and confirming a new value equation.

A huge mental mindset needs to make leaps of faith and adjustments to this new order of focus.

That set of decisions will require a dedicated, focused, systematic need to assess the portfolio and the operating conditions. This goes way beyond the present “where to play and how to win”; this becomes as much for the long game as managing the short term.

The four focus points for Sustainability

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Orchestrating the New Ecosystem Business Design.

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There is a growing body of work about “orchestration” and its need in the business world. As we form a greater association with ecosystems as the business design, the orchestrator becomes central to its performance and success.

Orchestration has become synonymous with managing or dealing with (specifically) external partners. The need is to learn to cooperate to produce something different and original, usually in a platform and ecosystem arrangement.

I am continually reading about scale, modular structures, governance, the advantage of asset-light business models where the possibilities of speed and breadth of open innovation need to “kick in.” Orchestration can take on a lot, but we need to define the role a little more, in my opinion.

I often wonder if all this orchestration through ecosystem design does achieve that radical breakthrough or have become just another solution or coordinating mechanism and a convenient “tag” to attach to it to consider?

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Ecosystems offer us infinite possibilities

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The new environment providing by adopting ecosystem thinking offers us infinite possibilities. It opens us all up to new knowledge, collaboration and sources of new value and innovative impact.

We have new frontiers and unexploited opportunities everywhere when we push through today’s constraints. We have more connected hardware to open up our physical and digital realms, and thirdly we have access all the time to more real-world data than ever before—the birth of the digital and physical ecosystems that enable innovation like never before.

We have some awesome power available to us; can’t we unlock the potential to change where we seem to be heading?

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Getting Comfortable with Your Digital Twin- Origins, Purpose and Definitions

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Image from Siemens AG on their digital twin thinking, of a perpetual loop, constantly informing and improving.

I want to give a more dedicated focus on the digital twin that is becoming more dominating in our world. So I will explore these increasingly over different posts. This is the first to give a short history and explanation of digital twins before we look deeper into the role the digital twin is taking in industrial predictive applications and visualization and how this is evolving into being comprehensive in its design, allowing twins to be built on processes, products and production to relate, anticipate and simulate actual activities or physical needs.

So, where are we on understanding the value of having a digital twin? No, not yet one for ourselves but given time we will, we already have a digital twin of a heart.

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The New Virtual Enterprises Building Blocks

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© Copyright IBM Corporation 2021

I have to say I loved reading this from the IBM Institute for Business Value. It provides a greater fit with much of what I was struggling to articulate in a recent post “Missing the building blocks of ecosystem design in the Energy Roadmap by IEA“; I can relate to what the IBM report conveys as the future way to organize and undertake business or to bring together all the parts of the Energy System roadmap suggested in the recent IEA report.

The report “The Virtual Enterprise – The Cognitive Enterprise in a virtual world.” gives a new view to managing in both virtual worlds and enterprises. I do recommend reading it.

To quote Mark Foster, Senior Vice President, IBM Services:

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Missing the building blocks of ecosystem design in the Energy Roadmap by IEA

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https://theconversation.com/humanitys-sustainability-is-no-excuse-for-abandoning-planet-earth-80699

I have been reading a groundbreaking report,  the world’s first comprehensive study on how to achieve a“Net-Zero by 2050: a roadmap for the global energy system“(referred to as NZE here in this link). It is produced by the International Energy Agency (IEA)

Why is this so important? Well, it is about the most dramatic change in our Energy Systems globally and emphasised that this decade is pivotal to reaching the targeted goal of net-zero by mid-century. Each decade will bring dramatic change to all of our lives. Our planet is under significant threat of global warming that will impact how we can live and perhaps survive.

This 2050 target is in line with the 2015 Paris Agreement, the foundations of global consensus to limit the rise in global temperature to 1.5c. This requires nothing short of a total transformation of the energy systems, a complex “beast” that provides us with the basic energy sources we need to survive, live, build and grow.

The report sets out a cost-effective and economically productive pathway, resulting in a clean, dynamic and resilient energy economy dominated by renewables like solar and wind instead of fossil fuels. The report also examines key uncertainties, such as the roles of bioenergy, carbon capture and behavioural changes in reaching net zero.

The Energy System is a complex Ecosystem.

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Sustainable Value Creation

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Sustainability has become a hot topic in the corporate board rooms across the globe in the past year. The World Economic Forum held a virtual forum for business leaders to determine a set of Stakeholder Capitalism Metrics – universal, comparable disclosures that focused on people, planet, prosperity and governance on which companies can report, regardless of industry or region. This was held in January 2020 with a direct result of a consultant paper “Toward Common Metrics and Consistent Reporting of Sustainable Value Creation being produced and discussed going forward.

This consultative work continued with a White paper in September 2021, “Measuring Stakeholder Capitalism Towards Common Metrics and Consistent Reporting of Sustainable Value Creation. 

Recently, this had a following on with a beneficial further white paper in March 2021 called “A Leapfrog Moment for China in ESG Reporting“, which provides all involved or interested in Sustainability to refer to. I will be coming back to this particular report at another time. What caught my attention was singling out China and how many of their leading organizations are undertaking sustainability into their corporate goals, plans and operations.

Within these three documents, you gain a handy set of insights to build a sustainable pathway.

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Looking beyond ESG

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I have been undertaking some investigative work on sustainability. It is fascinating to read, evaluate and recognize how each business is tackling its response to this. Sustainability has become increasingly important when facing a climate crisis and a rapidly changing world where nature is significantly under threat. It is we, the human race, that has prompted the crisis but have the power to change this into a more equitable world.

You get the growing sense that various stakeholders around our businesses are placing pressure on organizations to respond far more to managing sustainability, especially the large, more global ones. The growing concerns will form around Governance, Strategy, Risk Management and Metrics and Targets for distinct disclosures relating to their business.

Business tends to fall back on the broad ESG themes

Business tends to ask the question, “How do we offer sustainability pathways to drive business value? Now that is a very targeted positioning, and you naturally ask the follow-up questions. Questions to naturally frame this are “how do we reduce costs and risks?  “to strengthen the trust with stakeholders” and “find the new growth opportunities”.  These perhaps give a sustainability pathway internally but do these really tackle the bigger external issues such as climate challenges, environmental degradation or social inequality. Is that the role of the business or Governments and institutions set up to balance and defend, like the UN or the WEF.

Business often gets caught in its own world searching for customer impact, making sure it is empowering its people, applying technology appropriately and having a growth mindset. These are very business goal-driven and, if applied well, do deliver a more sustainable world but is this enough in today’s world? I think this is too narrow, we need to really step outside and view how our purpose builds into the external issues, that we all face, recognizing a significant crisis is ahead.

Much as I can relate to the ESG approach, I am not confident it is pushing hard enough as a framework.

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Accelerating Innovation comes from Ecosystem thinking

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Just a reflective moment I am sharing here on the place of Ecosystem thinking.  We need to recognize the changes we need to undertake, even in a world of infinite possibilities. We chose to explore new ways of working; new solutions to difficult challenges need a new approach to accelerating innovation through ecosystem thinking.

In my view:

“Today and in the future, to take where we are in our technology and digital understanding and feed it greater human ingenuity, we give it intelligence, real new intelligence not just the artificial stuff. When we combine the collected knowledge found in a network of collaborators, we can dramatically advance the solutions sought by unlocking previously intractable problems.”

The new environment offers us infinite possibilities

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