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In an effort to structure the largely uncharted arena of business ecosystem leadership challenges we identified twelve key issues executives need to be aware of.
They represent, in no particular order, the essence of the numerous inputs we received from expert conversations, a mini think-tank, and the results of a global survey we conducted in 2019 at the Center for the Future of Organization at the Drucker School of Management (CFFO).
We summarized the 12 issues in a previous article in which we also suggest a working definition of the meanwhile ambiguous buzzword “ecosystem”. The descriptions of the individual issues are deliberately short; they are only meant to map the agenda and stimulate conversation.
To make the make the articles a reasonable length and to allow for more differentiated feedback and comments on the individual items, we present them in four instalments. This one looks at Ecosystem Design, Ecosystem Quality, and Ecosystem Effectiveness.
4 Ecosystem Design
Selecting key partners and creating explicit policies and mechanisms to optimize the performance of the ecosystem
As our definition implies, organizations have always been parts of business ecosystems, whether they are aware of it or not. Over the last decade, digital technology has become a powerful catalyst for business models that are based on network and platform economics. Leveraging these opportunities, ecosystems can now be much more easily designed by players who have the influence and ability to aggregate and orchestrate the necessary stakeholders.
Case in point: Understanding the significance of predictive maintenance for their business, airplane manufacturer Airbus created Skywise, an open data platform to prevent maintenance issues, achieve better fuel efficiency, and optimize customers’ time spent on these issues . Organizations that are relevant in this space, contribute their various distinctive capabilities via a carefully designed collaborative infrastructure.
Airbus used clearly defined criteria to select their key partners and developed explicit policies and collaboration mechanisms, such as community platforms and customer feedback systems, to optimize the performance of the ecosystem.
Skywise is an excellent case of a major industry player being able to initiate, design, and orchestrate an ecosystem from scratch. Apart from enabling technology, there are many factors that help Airbus to play that role, among them the oligopolistic structure of the industry, a great existing relationship network, and the empowerment of a dedicated internal unit (Growth and Innovation) to develop and implement the project.
Smart inter-organizational design that is based on a deep understanding of the dynamic interplay of contributing capabilities, and which provides a formalized framework to support the overall system in terms of value creation and capture, is an important differentiator when it comes to the ability to leverage an ecosystem’s potential.
Conducting a comparative analysis of the genesis as well as the resulting organizational architecture and dynamic of cases like Skywise could provide significant contributions to practice and theory alike.
5 Ecosystem Quality
Assuring the quality of participating partners, related to criteria such as brand equity, market presence, and strategic fit, technological capabilities, agility, and more
A key element that contributes to the quality of a business ecosystem – which eventually determines its competitive success – is the quality of participating partners. Brand equity, market presence, sound finances, and strategic fit within the overall mosaic of required roles, backed-up by respective technological capabilities are important criteria when it comes to selecting partners or being selected by others. But these qualities, which are also considered in traditional M&A transactions, are only one part of the equation.
Equally – maybe even more – important is a partner’s agility, as it is the key for successful inter-organizational collaboration. Especially when it comes to teaming up with large organizations, the above criteria may all be there, but they may be hampered by a toxic culture and stifling bureaucracy.
Scouting the right people within such organizations and assuring that these people are also the ones who engage in the everyday interaction within the ecosystem is a major challenge and often a case of serendipity.
Daniel Deparis, who is in charge of the Urban Mobility Team at Daimler, experiences this challenge first hand when it comes to selecting partners for the ecosystem that evolves around mobility solutions for large cities:
“People say that when you want to invest in a start-up, have a look at the team. I think this golden rule applies also for other partners. It’s just more complex to find the right people in a big company. Because if you want to work with a big tech company that has 200,000 people, how can you find out who will be able and willing to collaborate with you on the topic and go the extra mile?”
Building and leading within a successful ecosystem requires not only strategic and organizational acumen, but also cultural due diligence.
6 Ecosystem Effectiveness
creating an ecosystem architecture that assures speed, transparency, and flexibility in cross-organizational collaboration.
Speed, transparency, and flexibility are important elements of capabilities that are required for cross-organizational collaboration. If one player in an ecosystem is hampered by bureaucratic processes that slow down its decisions and execution speed, the entire network suffers. Those who can decide and execute fast are not only more active drivers of the overall system dynamics; they are also more attractive partners for orchestrators and other contributors.
Unfortunately, the complexity of decision-making and the time consumed by related micropolitics grow exponentially with the size of an organization. Multiple decision layers, vertical silos that do not talk to each other, powerful internal stakeholder interests, and an abundance of policies and rules that try to cope with the resulting dynamics are putting severe brakes on decision and execution speed.
The only way for large companies to mitigate this structural disadvantage and foster speed, transparency, and flexibility is to let go of tight central control and empower the peripheral units that engage with the ecosystem partners on a daily basis. Trust becomes a critical success factor in this context.
 https://skywise.airbus.com/. The case was presented by Fabrice Villaumé, Head of Growth and Innovation at Airbus, at the mini-think tank we conducted in London.
This article is part of a LinkedIn series about Organizing for Business Ecosystem Leadership. It is based on a recent research project conducted by the Center for the Future of Organization at the Drucker School of Management at Claremont Graduate University (CFFO).
If you would like to get immediate access to the entire study, you may download an electronic copy of the report here or get it as a physical booklet or Kindle version here.
To deepen our understanding of the subject, CFFO plans to launch a global dialogue and action platform on topics related to business ecosystem leadership. If you are interested to receive an invitation to the platform, contact [email protected].
Thanks for reading! We look forward to your comments and contributions to the conversation.
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