Ecosystems – why they matter and how to succeed in them
Most of us are familiar with the idea of ecosystems surrounding hugely successful firms like Google, Amazon, Facebook, Apple and Microsoft. But what do we really mean when we talk about ecosystems? And beyond that, how do ecosystems generate business value? In today’s economy of speed, business ecosystems play a central role in building competitive advantage, so it is important to understand how ecosystems succeed and how they reward players.
Qentinel recently gathered a group of experts to discuss how business leaders can build advantage in their ecosystems. All agreed on one essential point: that ecosystems must deliver value to customers as well as other players in the system. Eight other primary insights emerged from the discussions.
- Understand what you mean when you speak of ecosystems. What are the similarities and differences between naturally-occurring ecosystems and business ecosystems? From an economist’s perspective, an ecosystem is a concept borrowed from biology, and is only partially applicable to business or society. The word is used to describe very different things, but a good rule of thumb is to remember that an ecosystem is always dynamic – changeable and often organic. Subcontractor networks and other contractual partnerships are more static. Building an ecosystem means developing cooperation.
- Be the ecosystem you want! Grow your ecosystem and help all its members to flourish! We already mentioned search giant Google, one of the best-known ecosystem hubs today. It says it is driven by end users and their interests. Google’s ambition is to democratize the internet. Its ecosystem offers small players technologies that were previously at the disposal of only a few. In the future, competitiveness will depend on us all – for speed and adaptability, Google believes.
- Cooperate! Competitors can build a shared ecosystem and succeed. Meet the One Sea Ecosystem, which is being used by the Finnish maritime industry to develop unmanned vessels. The project is a concrete example of competitors collaborating to innovate in establishing an ecosystem, developing practical operations and future goals. The project offers an important opportunity to bring to the marker technologies and practices that would otherwise be too slow and risky to develop independently.
- Seize the opportunities offered by change! Disruption in your sector will generate new ecosystems. Join in and help the ecosystems succeed. For example, the traditional banking sector is also moving toward ecosystems. Existing payment directives and data protection legislation are changing in Europe. Banks still have a monopoly on data, but in the customer customers will be able to allow licensed bodies to use their data. Banks are now working with partners to develop traditional banking interfaces to provide better services for customers.
- Protect the viability of your ecosystem partners! Improve the conditions for business success for all players in the entire ecosystem, not just yourself. Seemingly crazy ideas have succeeded and concepts that seemed impossible 50 years ago are now part of everyday life. Moreover, statistics show that many companies built on ecosystems have strengthened over time.
- Succeed in changing ecosystem mindset and culture by changing everyday habits! Start changing your “egosystems” by making small changes in your everyday life with the help of nanohabits™ thinking. Changing everyday habits is an efficient approach to living in change.
- Increase trust! Make your ecosystems as transparent as possible for all members. Participants considered the case of Orion Pharma to understand how to create transparency in an ecosystem and build trust.
- Increase customer value! Measure, analyze and improve customer experience in digital channels. Essentially, it is worth digitalizing everything that can be digitized while maintaining a focus on customer value.