I have recently been reworking my views on Business Ecosystems in their thinking and design. They are recognizing a fundamental shift in how we approach problem-solving and value creation. We need to continue to urge businesses to move away from often isolated, linear models towards this thinking and design, forming around being interconnected, based on dynamic systems.
It is moving towards a collaborative, interconnected design that makes for a radically different mindset where complex relationships, where value co-creation and balancing both short-term and long-term become central for sustainability and protecting a viable future.
We do need to recognize Business is on a Burning Platform: Why Traditional Approaches Are Failing
Why? Well, we are caught in a very hyper-connected, rapidly evolving global landscape, evolving, adapting and adjusting far quicker to events and shifts in consumer attitudes and needs. The traditional business models were built on maximizing efficiency built on economies of scaling and finding individual distinctive competitive positions, defended and protected. This approach is under fundamental attack, becoming obsolete at an unprecedented rate for many reasons.
Consider these critical insights:
Disruption is the New Normal, being threatened by agile and disruptive technology evolution
Macro-impacts seen
- Average company lifespan on the S&P 500 has shrunk from 61 years in 1958 to just 18 years today
- 52% of Fortune 500 companies have disappeared since 2000
- Technological and market shifts are occurring with exponential, not linear, speed
Micro-impacts constantly emerging
- The market is full of early adapters, constantly experimenting and embracing different business models based on agility, technology, AI, access to early funding, and encouragement to experiment.
- There is a constant shift towards new and emerging competitors focused on disrupting existing and established markets by seeing fresh opportunities unexplored or not recognized by the incumbents
- Established organizations face significant internal resistance to wanting to change, so organizations can’t mobilize internal resources, often built on rigid structures and management is reluctant to change on the risk of reducing short-term returns, impacting their own vested interests.
- Market and product rigidity is becoming the straight-jackets and transformation is a notion that strikes fear, stifling creation, competition response and failing to embrace changes seen.
- Loss of control, unlearning and re-learning, recognizing capabilities are based on outdated skill sets caught in organizational silo’s that hinder cross-collaborations and information sharing
The imperative of Ecosystem Thinking & Design: A Competitive Survival Strategy leading to more
Ecosystem thinking is more than a “simple” strategy change, it is a new philosophical approach to understanding and designing a complex system that places this priority on interconnectedness, collaborations, sharing in knowledge and discovered new value and embracing adaptive potential by experimenting, exploring and challenging existing norms with a new perspective of domain management that embraces different business collaboration design, the powerful embrace of technology, considering social impact and environmental sustainability in open ecosystem innovation designs.
The need is to grasp critical insights and reflect on how these change our thinking:
1. Seeking Adaptive Resilience
Traditional strategic planning is like navigating with an outdated map and structure, it is rigid in its process, lacking the dynamics it needs for today’s business world. Ecosystem Thinking provides a dynamic compass that unlocks sources of emerging value by opening up to rethinking how we operate:
- Anticipates emerging patterns
- Creates flexible response mechanisms
- Transforms organizational rigidity into strategic agility
2. Value Creation Beyond Existing Boundaries
- Moves from closed, competitive models to collaborative value networks
- Enables rapid innovation through distributed intelligence
- Creates multiple pathways for growth and adaptation
- Thinking about the integrated business ecosystem
Concrete Business Implications
Set ambitious Financial Performance Goals
- Companies practicing ecosystem strategies can aim for and demonstrate:
- 20-30% faster revenue growth
- Improved risk management by sharing and focusing on the bigger picture of expanding thinking beyond a single item into a complex, value-driven set of offerings.
- Enhanced innovation capabilities through exchanging knowledge, intelligence and diverse experiences
- Greater market responsiveness by exploring, experimenting at faster pace and greater data-rich understanding.
Strategic Advantages that need to be achieved each and every time as outcome metrics
- Reduced innovation cycle times through dynamic ecosystem thinking
- Lower barriers to entry in new markets through imaginative collaborations
- More robust and flexible organizational design that adapts and aligns to collaborative specifics
- Ability to leverage external expertise and resources on a constant, free-flow of exchange and sharing.
Real-World Transformation Examples
Recognizing Ecosystem Revolutions take time, have complexity, new learning and growing mastery. long-term commitment and recognizing evolutionary paths are all around and need to be grasp quickly and with clarity of their future value.
Apple went from a one computer company, into iPod and I Tunes into their inflection point of I Phones to orchestrate developers, accessory, content creators, service providers as technology pushed boundaries of possibilities and opportunity.
Amazon started as a online bookstore, into a “everything” bookstore, moving into the Amazon Marketplace and the development of AWS offering new business models of logistic networks, fulfillment, media, pharmaceutical, grocery and healthcare
Salesforce started as a niche provider of CRM (in 1999) into a highly integrated business ecosystem providing specialized domain and customer-driven services, often through a targeted acquisition to build vast orchestrated connected networks
Microsoft offered the operating system management and productivity software that became “our” windows software. Through acquiring and learning how to adapt today into open,collaborative platforms into a vast technology platform provider for individual and enterprise providers.
There are many more examples, well established or emerging that have seized Ecosystem thinking and designing as core to how they undertake their business evolution. Did they see these opportunities when they first started, absolutely not but they were crystal clear in the value of interconnected and the need for dynamics to be core.
I believe the core factors for Ecosystem Orchestration in these cases lies in:
- Interconnected Platform Development on a constant evolution
- Generating value through meaningful dynamic interconnections
- Designing adaptive, regenerative systems
- Recognizing interdependence becomes our primary operating system
- Recognizing the value of API’s and Open Development Tools through Marketplaces
- Building the “Network Effect” for understanding, connecting and extracting value
- Having Governance and Standards that build trust, common protocols and sharing mechanisms
- The care and selection of Strategic Partnerships and bold investments recognizing the value potential
- Constant transforming cultures and developing new cognitive capabilities
- The importance of iterative learning and sharing collective wisdom
Implementing Ecosystem Thinking & Emerging Design: A Phased Approach– “the call to arms“
The need for a blueprint* that involves on a constant “looping effect”. In summary only:
Phase 1: Strategic Reconnaissance
- Conduct comprehensive ecosystem mapping
- Identify key interdependencies and potential collaboration points
- Assess current organizational flexibility
Phase 2: Cultural Transformation
- Develop cross-functional collaboration skills
- Create platforms for knowledge sharing
- Incentivize ecosystem-oriented thinking
- Keep evolving, refreshing and changing multiple parts that stimulate and catalyses the whole
Phase 3: Adaptive Infrastructure
- Develop flexible technological architectures that adapt, adjust and build out constantly
- Create mechanisms for rapid experimentation, break it, learn and move on, reiterate or kill.
- Build external and internal collaboration platforms that has synergies, interdependencies and exponential value potential that “yield” nee values from being interconnected.
- Systemic Interdependencies that form a coherent ecosystem development and link strategic vision to operational reality that extracts the quality between the elements for offering the “source” of their value and resilience.
Risk Mitigation– shifting from today’s mindset into the connected ecosystem one
Traditional Approach Risks trap us and actually expose us
- Increasing organizational inertia
- Vulnerability to sudden market shifts
- Diminishing innovation capacity
- Talent attraction challenges, losses and providing the new competitors
Ecosystem Thinking Risk Management
- Distributed risk through collaborative networks
- Continuous learning and adaptation
- Enhanced organizational intelligence
- Attracting top talent through dynamic work models and working on distributed responsibility
Investment Perspective needs a major adjustment to managing costs, returns and sustaining value.
Short-Term Costs
- Organizational redesign
- Structural and ongoing operating costs (opening guide)
- Training and cultural development
- New technological infrastructure
- Learning to collaborate openly and differently
Long-Term Returns
- Sustained competitive advantage
- Reduced vulnerability to disruption
- Increased innovation velocity
- Superior talent attraction and retention
Leadership Imperative
Ecosystem Thinking is not a choice—it’s a strategic necessity. The question is not whether to adopt this approach, but how quickly and effectively you can transform your organization. We need to move from that “stability paradox”, constant over-optimization obsessions, from transactional in nature to transformation in impact- recognizing the emergence of purpose-driven domain thinking.
We need to re imagine purpose and systematic thinking into the world of complexity and collaborations, it goes beyond the strategic pivot but recognizes the powerful combination of re-imagining human collective potential and emerging technology capabilities
The future belongs to adaptive, interconnected organizations that can learn, evolve, and create value faster than their existing or emerging competitors.
Many of those competitors will be forced or want to collaborate as the “economic pie” gets so much bigger as we transcend traditional boundaries for purposefully creating different interconnect value. One based on dynamic, generative value networks designed that multiply collective potential, seeing purpose-driven domain thinking and design opportunities in highly interconnected ways.
I leave you with this one thought “Stability is fundamentally unstable in dynamic environments“
Change is upon us. Do not ignore it, or think it will simply go away as a present fad, you can become quickly irrelevant yourself in this different world of pace in learning and adapting.
- An extensive blueprint is being worked upon and will be released soon.