Ecosystem Strategies Require Cultural Change and Business Model Adaption
By: Uwe Weinreich
Tags: Collaboration, Business Model, Strategy, Business Ecosystem, Trust

Image: pxhere.com (CC0)

In his article, Greg Satell outlines the need for companies to evolve from linear value creation to a strategy of economic ecosystems. I absolutely agree with his thesis and I see a long and arduous road ahead. Ecosystems will become more and more relevant. That is right, I suppose. But to collaborate as an ecosystem. But collaborating as an ecosystem requires different skills and a different culture than the previous way of doing business. In some cases it is even diametrically opposed to previous habits. The excellent training of managers becomes a real obstacle. It is much more difficult to unlearn something than to acquire new skills. And that is exactly the point here.

The trust-success shift

For some years, I had been researching as a psychologist on how trust can be established and maintained in economic relationships. In short: it is not easy and it does not correspond to the basic structure of our current economic system.

Over decades, managers are trained to create success through dominance over partners. Trust is only given when needed. People who lived their lives for years under this perspective will encounter problems when they should associate success with trust rather than domination. The continuing desire to dominate the value chain on the one hand, and the need to cooperate as an ecosystem on the other, thus pose an enormous challenge to the management of trust that should not be underestimated. Each partner of an ecosystem will (have to) pay attention to in how far other partners will eventually start to dominate the chain of service delivery, as it becomes economically more advantageous for them. That is not the most fruitful basis for a trustful relationship. To stabilize it, a mutually accepted system of checks and balances will become inevitable.

Some years ago, I led a strategy development process for a national business association. It was surprising that it was much easier for CEOs to adopt step by step a collaborative mindset than for middle managers involved. I learned that their agreed objectives and the internal reward systems were contradictory and made it extremely unlikely for them to adapt without major conflicts. Any company that wants to succeed in an economic ecosystem must find ways to reward rather than punish collaborative management behavior. Internal structures, skills, habits, and reward systems need to be reconsidered to associate success with trust and collaboration.

Shared value as a “boundaryless” business model

A new, collaboration-friendly mindset alone is not enough. It might support collaborative value creation, but success for companies and managers will also in the future be measured by value capture. “How much do we earn”, is still the question. Many cooperations and associations manage that crucial point by limiting cooperation to pre-competitive aspects like R&D. I believe that during the next years we will see more and more ecosystems arise that develop and establish models of shared value capture.

In 2011, Porter showed that shared value is a viable and beneficial strategy. His focus was on how companies can have a positive impact on society. From a broader perspective, the idea of shared value can also be applied to partners in an ecosystem. That would require mutual value capture strategies that transcend company boundaries.

To be honest, I haven’t seen any robust economic ecosystem that has already developed a fully satisfying model. If there is any, I’d love to learn about it. If not, I would be eager to contribute to developing it.