As a leader one of the constant worries is losing the momentum of growth and thereby relevance in the market. This could be due to the organization's strategy not adapting to a myriad of factors related both to the external environment as well as internal capabilities 1. In the digital age, one such threat is posed by competitors who have built or are building an ecosystem of aligned partners to disrupt the current business models and value equations.
The need for having an ecosystem strategy is becoming more & more critical as the industry boundaries are getting blurred and being redrawn. Designing and building value creating ecosystems therefore ensures continuous growth by providing a superior value proposition to customers.
A well-conceived ecosystem offers several advantages over your stand-alone efforts. To name a few:
More and more your competition will not be with traditional competitors but with those that have built an impressive customer value proposition thru an ecosystem of partners. Your strategy needs to adopt an ecosystem approach with primarily three prominent areas to deep dive. The first is to evaluate how the current business model can be/will be disrupted, either by you or another player. The aspects to study for an ecosystem approach need to consider the following:
The second area revolves around building the strategy and how you are going to operationalize it. Having uncovered the possible paths of ecosystem disruption that can threaten your market position, you must accordingly prepare a strategy to either defend or lead an offensive. Maintaining status quo is not a viable option. Ecosystems with co-innovations can change the nature of your offer & value proposition. Their effectiveness drives the speed of disruption to the dominant current model as well as subsequent adoption by customers.
The third area involves building relationships with companies different from yourselves to create a shared objective and win-win. Managing the ecosystem requires a specific set of leadership skills. The partners to work with are in fact not your suppliers but players with whom you can create an integrated whole offer to meet customer needs. Value creation for customers can increase substantially by partnering these 'complementors'. However, one needs to be clear about how the alignment and synergies can be increased on a continuous basis working with the chosen partners.
The key questions for strategic review are therefore:
1. Refer our earlier
insight “Do you really have a Strategy?” for more details
2. Refer our earlier insight “Digital Transformation – A Growth Imperative” for more details