An Agenda for Business Ecosystem Leadership – Part 4 of 4

The last instalment of our series on Business Ecosystem Leadership challenges looks at the complex topic of Ecosystem Governance, the new context of Ecosystem Talent Management, and the necessity of an Ecosystem Learning Architecture.

The topics are part of twelve key issues we identified through 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 these 12 challenges in our opening LinkedIn 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.

As always, comments and remarks on each of the challenges are very welcome.

10    Ecosystem Governance

exerting influence without formal power, and adapting internal governance processes to accommodate for ecosystem dynamics.

When it comes to leading within the logic of ecosystems, companies face two concurrent and interdependent governance tasks: the governance of their own organization, and the governance of the ecosystem. Both come with their distinctive challenges.

Internal governance is usually designed for linear, transactional business processes that conflict with the agility requirements of active networked ecosystem management. To succeed in an ecosystem context, the typically central and vertical control must give way to an empowered periphery of micro-organizations that are allowed to situationally adopt various operating models as needed. The centrifugal forces released by peripheral semi-autonomy must be countered by a strong framework of values, strategic orientation, and purpose.

Organizations that lack internal structures, mechanisms, and policies that govern their ecosystem involvement become victims of ecosystem dynamics. Their engagement – if any – will be uncoordinated; it will lack a shared strategic rationale, leading to opportunity costs and structural disadvantages related to their overall position within the system. As the results of our survey show, companies who have established a dedicated unit that focuses on business ecosystem management outperform the rest in each and every capability dimension we investigated.

Governance of and within ecosystems is a very different challenge as ecosystems typically lack the formal legal structure that provides a constitutional framework that traditional organizations possess. Without such a “constitution”, however, the members of the system tend to engage in an ever-changing and often unpredictable dynamic, which is determined by blind market forces and the relative power of each player. In ecosystems with an undisputed orchestrator, contributors may (have to) reluctantly accept a certain degree of external governance; governing ecosystem relationships that are determined by co-creation among equals requires negotiation based on a mutual understanding of value contribution. Depending on the nature and the number of partners and deal types, the resulting contractual architecture can become overwhelming[1].

11    Ecosystem Talent Management

identifying, attracting, and capitalizing on mission-critical talent outside the boundaries / the control of an organization.

The interdependent character of ecosystems changes the traditional approach to talent management, as talent outside the boundaries of an organization gains mission-critical importance. The overwhelming majority of talent management systems in today’s corporations is only able to deal with people that are inside the organization, within the “control” of an employment contract. They are not suited to deal with the multiple value creation relationships that may happen in a dynamic business ecosystem.

The traditional talent questions remain, but the context is dramatically different, and many do not have an established professional tool kit to address them properly:

• How to identify and engage great and “strong” talent within partners of the ecosystem – talent that has also the ability to serve as a change agent in its own organization?
• How to attract and retain the best talent – if it can’t be “hired”?
• How to shape and develop talent for positions and tasks in the ecosystem I do not control?
• How to measure and incentivize performance – if performance is dependent on inter-organizational collaboration, and solely internal metrics cannot be applied?

The Hollywood ecosystem with its existential dependence on the interplay of hard-to-control talent provides a fascinating magnifying glass on talent management challenges of this kind. It is no coincidence that the big talent agencies and lawyers are the most powerful players in a system dominated by power play. They know who is who, who works well with whom, and they are able to “package” and negotiate multi-stakeholder deals. An in-depth analysis of the largely informal systems and mechanisms of this industry space could provide valuable perspectives in that context.

12    Ecosystem Learning Architecture

including the relevant members/partners of the ecosystem in an ongoing journey of joint innovation and transformation via an inter-organizational learning architecture

Organizations get continuously challenged by the diversity of operating models and different relationship types that constitute a business ecosystem. The collaborative value creation process of an ecosystem produces an ongoing innovation dynamic, which challenges leaders and their organizations to continuously evolve rather than settle into internal routines. The good news is that the friction happening at the boundaries of the various players is a great source for collaborative learning that is critical for realizing the potential of an ecosystem.

Similar to what we noted in our remarks on governance, a learning culture in the context of ecosystems must address both sides of the coin: The shifting dynamics and ongoing innovation within an ecosystem requires agility from people and organizations – which is nothing else than the ability and readiness to continuously learn, on an individual and organizational level.

Most importantly, ecosystem learning means to extend the learning universe beyond one’s own organization and include the relevant members/partners in an ongoing journey of joint transformation. A well designed inter-organizational learning architecture can be incredibly powerful – and other than “hard” governance, such frameworks are typically based on “soft power,” making them great opportunities to exert influence that benefits all.

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[1] The prominent role of Hollywood lawyers and agents, and the insane amount of legal paperwork that is required to align key stakeholders of a motion picture is a great example for addressing ecosystem governance issues.

This article concludes our LinkedIn series about Organizing for Business Ecosystem Leadership, which 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, which also includes data from a global survey about ecosystem leadership capabilities among 200 executives, 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 research@futureorg.org.

Thanks for reading! We look forward to your comments and contributions to the conversation.

Roland Deiser

Previous articles of this series:

0 | Organizing for Business Ecosystem Leadership (Introduction and Overview)

1 | An Agenda for Business Ecosystem Leadership | Part 1 of 4

2 | An Agenda for Business Ecosystem Leadership | Part 2 of 4

3 | An Agenda for Business Ecosystem Leadership | Part 3 of 4

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