A conversation with Roland Deiser, Executive Chairman at Center for the Future of Organization, Drucker School of Management.
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Key Points
An ecosystem is more or less the extended enterprise that is interconnected on every kind of level and not necessarily in a linear way.
Digital transformation has brought new technologies to us (social technologies, cloud, etc.) and, and other elements that allow people to share data and to connect
Organizations have to see how they can connect more than in the past
If you like it or not, you are part of an ecosystem. Maybe you don't know it, but you are.
Structurally it means that you're moving from a world where you have a more linear approach to organization where things follow a certain cycle, a method like system development life cycle to agile development which involves a lot of feedback and interconnection. Even if you don't participate in sprints or scrums you still need a senior leadership that understands the importance of agile mindset.
The ecosystem approach is dual – an empowered periphery (smaller self-organized, micro organizations and teams that are really agile) and work with stakeholders outside the organization
Competition is not then either or, or a zero-sum game in an ecosystem environment. Competition really happens not so much between individual players but between ecosystems (e.g. iOS and Android).
Traditional industry boundaries become very fuzzy. Every industry has become a technology industry in a way. Is Tesla for instance, competing in the automotive space or is it competing in the connected software, smart city space?
It changes strategy. A traditional competitor could be an ally in your ecosystem–creating a market and then tackling it together. It’s important to make everybody happy players in that system so they can collaborate.
The old thinking was about maximizing shareholder value for my own organization by squeezing my suppliers, by trying to extract as much as I can from my customers. Now you must focus on value creation rather than cost cutting or pure efficiency.The more you give into the system, the more you will also take out of the system and get a leadership position in the system.
It does not mean that the concept of the single organization is dying, it is becoming a dual challenge. You need to have a sound strategy for your own organization to contribute to a sound ecosystem strategy. The same challenge applies to governance: governance in an organisation in codified, but in an ecosystem governance is something that emerges through multiple contractual arrangements that are fluid. The operating system of an ecosystem might be very different than your own operating system
Leaders have to think about creating a truly purposeful, strong strategic identity in their own organization and optimize the operating model for collaboration.
It changes the dynamics and position or industry leaders. The last hundred years, major players in the car industry shaped a lot of cars and technology, but maybe the hardware is just a smaller element now in a larger ecosystem of mobility, in smart cities; intelligent traffic systems are more important than just the hardware. If you have been an industry leader in a very specific field and in the ecosystem, your role becomes just a contributor and you're not the orchestrator. This is very hard for the established players who are used to dominate
Airbus initiated Skywise, a predictive maintenance system for air plane engines—a great example where everybody really benefits from it; Airbus gets more customer attraction, but also a lot of information about the performance of their planes and that informs again their R&D. They collect the data of the engine performances from all their customers and even from Boeing customers, and that allows Airbus to save costs and improve the maintenance of engines, which makes the airlines obviously quite happy.
You might have multiple ecosystems in which you participate. Amazon web services is a member of thousands of ecosystems.
The talent becomes an ecosystem challenge - management must let go of the notion that only the talent they control is the talent they have to take care of; they also have to take care of talent that sits outside. Maybe alumni that left the company but might be an interesting partner or a customer. McKinsey, this does this in a great way; GE did it in Jack Welch’s time when they produced so many leaders that they couldn't really place them all in their own organizations. They became CEOs in the ecosystem. They had trust were much better in collaboration with GE than those who did not have that history with the company
We haven't fully embraced a concept of humanity when everybody can be connected to everybody. The physical distance or location counts a little less and you can be in your own bubble with people around the world. Your allegiance to a certain entity can fluctuate or be much more complex than it used to be.
Roland Deiser https://www.linkedin.com/in/rolanddeiser/
Center for the Future of Organization, Drucker School of Management (https://futureorg.org/)