Today's organizations are deeply embedded in complex ecosystems. Understanding your company's space in its ecosystem can help you anticipate market challenges and help your company thrive during change. This article, originally published by CIO.com, explains what an ecosystem is and why curing ecosystem blindness is essential for leaders today.
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1. Planning Your Business Strategy in the Corporate
Ecosystem
Maya Townsend, Partnering Resources, CIO
What happens when you discover that your biggest client is the innovation and loyalty that come from engaging people
cannibalizing your product? This happened to one along the value chain.
international technology company. It threw the leadership
into an intense conversation about strategy. They emerged The flip side, of course, is that organizations engaging in
from the discussion with new resolve: to plan for the future deep collaboration tie their fates to the success of the
based not just on the company, but on the ecosystem in ecosystem, not just their own success. For example, if
which it operates. Microsoft were to go under, there would be a lot of
companies in trouble: systems integrators, value-added
The concept of the corporate ecosystem has appeared in resellers, software trainers, and so on.
technology journals for years. Simply put, it's the idea that
today's companies are embedded in multiple, complex
Mapping Your Ecosystem
relationships that make them interdependent on each other
for success. But it's only recently that corporate leaders are
realizing that an ecosystem is more than a concept. The If your company's fate is intimately tied to that of other
ecosystem has intense implications for how companies organizations, some of which are your competitors, you're
plan for the future, and they ignore those implications at going to think differently about their success. To bring this
their own risk. thinking into your next planning effort in a productive way,
start with a simple vulnerability assessment.
The Complex New World of the Ecosystem
The purpose of the vulnerability assessment is to identify
the companies, industries, organizations, and issues upon
Traditionally, executives worried about competition from which your organization depends in order to be successful.
rival firms. It was a straightforward world: the firm controlled Brainstorm the events that could disrupt your
its resources, advantage derived from a company's assets organization's operations, impede its ability to deliver or
and organizations made money based on their ability to undermine its profitability.
deliver value within their supply chains.
Let's walk through the process with the hypothetical
Today's organizations look very different. Rather than EdgeTek Corporation. EdgeTek produces ancillary
stand-alone players battling for market share, companies hardware, most important, the cords that connect MP3
form networks and alliances and collectively deliver value to players to car stereo systems. EdgeTek's ecosystem-the
their customers. Consider these recent aggregations: organizations with which it has interdependent
relationships-includes its assembly plants in China, car
• Novell joined forces with IBM on an ambitious open- manufacturers, MP3 manufacturers and even local
source project while collaborating with IBM rival universities that provide a source for new talent.
Microsoft to boost Windows-Linux interoperability.
• Salesforce opened its Force.com developer site, Here's the initial list of potentially disruptive events for
building interdependencies with organizations as EdgeTek:
varied as CRMfusion, with six employees, and
Electronic Arts, which earned $3.1 billion in 2007.
• An increase in defects at the Chinese assembly plant
• Keane provides application outsourcing services to forces recalls or increases production costs
Miller Brewing Company, creating a dual-sourced IT
workforce with staff from both Keane and Miller.
• Shipping disruptions delay delivery to distributors
• MP3 players lose popularity and market share,
reducing demand for company's cash cow
By creating deep alliances, each of these organizations
• Changes to MP3 technology force product
realizes value beyond that which it could deliver
reengineering
independently. In fact, Siebel Systems' founder, Tom Siebel,
attributed his company's explosive growth between 1997 • Direct partnerships between MP3 player
and 2000 to its web of relationships. A web of consultants, manufacturers and carmakers diminish the need for
technologists, system implementers, and suppliers EdgeTek's products
collaborate with Siebel to bring their products to market. • Unionization of Chinese workers causes work
Not only does Siebel incur lower staff costs, it also gains stoppages and production shortfalls