The importance of ecosystem thinking

Updated: Jun 11, 2019

Too many notes, Mozart was once told. Too many ideas, we might say today. The culture of innovation is awash with idea generation and its sidekick, fail-fast fail cheap innovation. Worse, we need a culture of transformation not just innovation. Accenture recently reported that 81% of executives they interviewed see platforms as central to their strategy over the next three years. In my view the platform is a commodity and what you really need is ecosystem thinking.

The new game in town is, of course, the development of process model innovation. People tend to ignore the importance of ecosystem thinking. They do so because platforms appear to be the new process model. They look like new ways of getting things done, new ways of organizing.

They seem to represent fundamentally different models for organising business. That’s a myth. The platform is just a collection of technical capabilities. The real change is the capacity for ecosystem thinking.

Platforms do not succeed because of the technical stack within the platform. Having strong technical capability is a given rather than a differentiator. They succeed because good platforms organise business very well. But today’s best businesses are porous or unbounded. They do not enclose all economic activity within their walls like they used to.

Their primary differentiator is their ability to attract and organise the activities of third parties. Folks out there! In other words, they are masters of ecosystems.

Good platform owners know how to motivate other entrepreneurs to engage with the platform and its products and services. The best make it imperative that third parties engage with them - Apple, for example, is currently the dominant player in health metrics. They’ve come a long way since they built computers!

So yes, the future is really about platform transformation not just innovation. But the critical element is the ecosystem rather than the platform. Platforms are commodities now.

Ecosystems are the new management skill. Understanding what constitutes an ecosystem; how to communicate with the ecosystem; how to motivate, earn loyalty, promote opportunity. All this has to happen with people you do not employ, cannot instruct or order around; people who are outside your hierarchy.

To grasp ecosystems it’s important to lay a couple of platform myths to rest.

Right now there is first mover advantage in platforms. It is assumed that this advantage is definitive. Al success accrues to the leader. This is hogwash. Every company needs to be a platform, or rather every company needs to grow an ecosystem and organise its external environment.

The second myth is that platforms have network effects. They don’t. We are all on a network now. We are all connected. Ecosystems grew up because of connectivity.

So you need to ask:

Who would naturally belong to my ecosystem?

What new customer needs are evolving?

Can I identify these through new customer micro-segmentations?

What new products can I initiate for new customer segments?

What ecosystem activity is already taking place around these segmentations that I can organise?

What opportunity have I got access to that I can offer to an ecosystem?

How should I communicate, influence or control?

These kinds of questions will lead you to your new organisational design.


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