Adaptive Business Ecosystems. Image from the Alliance for Business Innovation.
If you live in a regulated monopoly, feel free to skip this post and go play golf. For the rest of you, here’s something important that you probably need to hear again:
Today’s successes are not individual successes. They’re collective successes.
Today’s businesses are not single entities. They’re part of complex ecosystems.
The methods you learned in business school are probably not helping you (unless you had some really hip professors).
What does this mean?
First: If you’re someone who gets more energy from doing it all yourself than from working through others, you probably shouldn’t be leading people. People used to talk about the shift from managing yourself and managing others. Today, we’ve gone beyond that. Leaders now need to think about and influence their business ecosystem. That means your job is about convening, connecting, encouraging, and enabling. It’s rarely about doing something by yourself.
Second: Strategy development and implementation will never follow a linear path again. That’s because companies today are so deeply interconnected to their suppliers, partners, customers, and even competitors that actions taken by one ripple across an entire conglomeration of entities. And that means that, when your company launches its shiny, new strategy, some other company is launching its shiny, new strategy and, often, they’ll influence each other.
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You’re in a leadership position. You’re in a business ecosystem. All you’ve got are traditional tools. What can you do?
Get Educated about Business Ecosystems
Start by filling in those B-school gaps. Check out Predators and Prey: A New Ecology of Competition, by James F. Moore. Moore coined the term “business ecosystems” and provides a short introduction to ecosystem development in this article.
Another excellent resource is the Harvard Business Review article Strategy as Ecology by Marco Iansiti and Roy Levien. They flesh out Moore’s concept by identifying critical roles in business ecosystems: keystones, niche players, commodity providers, and recyclers.
Finally, try Blue Ocean Strategy by W. Chan Kim & Renée Mauborgne. This is it: the book that lays out how to create and develop new business ecosystems. Kim and Mauborgne’s tools are straight-forward, practical, and easily accessible to managers. Many of these tools are available for free on their website.
If you want the quick course, try these recent blog posts:
- What are Business Ecosystems?
- Curing Business Ecosystems Blindness
- Lessons from the Octopus: Business Ecosystems, Adaptability, and Change Leadership
Assess Your Business Ecosystem
Get a sense of the business ecosystem in which you operate. Who’s in it? How do they interact? What’s your goal? What entities affect your goal? Check out this Ecosystem Mapping Tool that will help you take a first pass of describing your business ecosystem.
If you’re ready for a deeper dive, work with a Value Network Analysis consultant to create a robust picture of your business ecosystem. This technique, created by Verna Allee, is the best tool I’ve found for mapping and understanding business ecosystems.
Management by Objectives doesn’t work in this world. You need new tools and you need to understand how business ecosystems operate. Here are a few good starter tools:
- Vulnerability Matrix – Use to identify risks in your business ecosystem.
- Strategy Canvas – Use to compare the features of your company’s offerings to competitors’ offerings and find new ways to differentiate. There are other great tools here, also based on Blue Ocean Strategy, that can be used to help navigate ecosystems.
- Health Diagnostic – Use to diagnose how well your organization is positioned to succeed in its business ecosystem.