Organizations – like any social entity – are always in reciprocal relationships with the actors in their respective environments. As such, they are part of an informal ecosystem that they help to shape, whether they are aware of it or not. Without a strategic and organizational business-ecosystems-perspective, companies tend to think of themselves as the center of the universe, which does not allow them to see the bigger interconnected picture. They focus only on the rationality of their own (sub)system, usually through bilateral transactions structured in linear value chains. And thus neglect the opportunities that arise from active management of the interdependencies between the actors that make up a business ecosystem.
Dr. Roland Deiser of the Drucker School of Management and Executive Chairman of the Center for the Future of Organization explains in his study Organizing for Business Ecosystem Leadership that to succeed in the complex world of networked value creation, leaders need a new kind of strategic-organizational thinking based on a decentered perspective. They need to ensure that their organizations develop and maintain mechanisms that enable them, first, to actively perceive the larger context in which they operate and, second, to respond appropriately to the ever-changing dynamics of the system. This requires operating models that formalize these dynamics for the benefit of the entire ecosystem. To achieve this, such models must be structured as collaborative, horizontal networks. In this context, the elements cooperating in terms of value creation must be carefully selected and equipped with institutionalized interorganizational support mechanisms (such as rules, strategies, incentives) in order to make work steps manageable, transparent and capable of development for all actors involved.
Business Ecosystems are becoming increasingly important
In the last two or three years, the concept of business ecosystems has gained considerable importance. Books and articles on the subject are proliferating, and the world’s most important management conference – the Global Drucker Forum – has chosen it as the theme of its 2019 edition.
The enthusiasm is not surprising. Leading and managing the complex networks that make up an organization’s business ecosystem has become a critical core competency in the context of the dynamics of digital transformation that are upending industries and redefining the way businesses operate in the 21st century. Effective engagement in business ecosystems requires a different kind of strategic and organizational acumen based on a dynamic systems view that transcends not only traditional linear thinking but also the egocentric perspective of most companies.
To gain insights into how large companies are dealing with this challenge, Dr. Roland Deiser conducted a global survey of executives in his study that focused on the strategic and organizational skills required to successfully operate in ecosystem networks.
The most important results of the study
153 fully completed responses were submitted. 82% are in top or senior management, 76% are from companies with more than 1000 employees, 22% have a “high”, 23% a “low” digital maturity level (self-assessment).
Overall Capability Assessment:
Business Ecosystem Management (BEM) skills are mediocre – only about 1/3 of respondents give themselves good or very good marks in this area.
There is little structural response to the challenge – only 16% have a dedicated unit dealing with BEM.
- Inhibiting factors: Existing mindsets and cognitive maps are the top factors preventing organizations from being more successful in BEM – 72% identify a lack of understanding of network dynamics as “very important” and “important”; 69% are introverted/self-centered; also 69% are unable to think beyond traditional business methods.
A culture of learning and change tops the list – more than 96% consider this a “very important” or “important” capability, followed by flexible resource allocation (92%), the ability to orchestrate multiple operating/business models (90%), and clear strategic governance (88%).
Less than 10% of companies report being “very strong” in the required capability areas. Those reporting strength are companies with high levels of digital maturity.
81% of respondents believe that addressing BEM in leadership programs and retreats will have a “very strong” or “strong” impact on BEM maturity. Other top choices include: Highlighting cases and success stories based on the company’s business ecosystem strategy (77%); talking to key influencers about the importance of the issue (75%); and institutionalizing collaborative processes with external stakeholders (75%).
What companies are really doing:
not much is being done to systematically address the challenges. The most common actions are organizing cross-organizational communities (22% do this “regularly”), talking with key influencers (18%), and highlighting success stories (17%).
Support from L&D/OD:
Significant support from L&D and OD to build capabilities occurs in only 5% of respondents, with 35% offering no support at all. OD – “Organization Development” – is about ensuring that the organization carries out a range of activities that help it work more efficiently. L&D – “Learning and Development” – is about developing people’s skills in the workplace so they can be effective in their work.
Half of the companies surveyed (51%) report specific ongoing initiatives in this area, covering a wide range of measures.
80% of all respondents would like to participate in a dialog platform that enables ongoing, in-depth dialog and shared learning on these topics.
What does Business Ecosystem mean for us?
As the digital industrial revolution continues at a dizzying pace, it is increasingly recommended that solution providers take an ecosystem approach. Currently, companies often overlook the opportunity for innovative ecosystem partnerships or even intentionally avoid them because they don’t want to lose control or feel too intimidated by the complexity. However, the potential benefits of participating in and shaping ecosystems are tangible and undeniable. They are key to unlocking growth: accelerating time to market, delivering insights, and creating business value.
Magility as a driver of business ecosystems
Magility is also getting in on the action in the world of business ecosystems. Dr. Roland Deiser from the Drucker Institute in Los Angeles shines here as our cooperation partner. Starting in 2022, ‘Business Ecosystem Management Consulting’ will be one of magility’s new consulting products, alongside ‘b2b Sales Consulting’ and ‘Technology Consulting’ – with a focus on sustainability, electronification, IOT and cyber security.