The next step toward success
It is all about achieving a basic understanding of what business ecosystems are and how they work. Learn more about the chapter - Understand.
We recently announced the forthcoming publication of our new book about the ecosystem economy.
Our book – Ecosystemize Your Business – will be published in May 2022.
To master the next stage of the digital transformation in the ecosystem era, companies need to adapt their business models, collaboration mechanisms, and operational procedures to transform themselves into successful ecosystem players.
What does it even mean to ecosystemize your business?
The word “ecosystemize” is an obvious portmanteau that combines two concepts: “ecosystem” and “systemize.” It refers to a range of key tasks for business leaders and other practitioners to successfully navigate in the emerging ecosystem era. This new era is now upon us and it will change the way of doing business for years to come.
We structured the book across a holistic process with four distinct stages:
Understand, Strategize, Design and Transform. In this brief article, we provide some insights into chapter one.
The first chapter (called “Stage 1: Understand”) is all about achieving a basic understanding of what business ecosystems are and how they work. The chapter addresses why ecosystems matter and why it’s so important for business leaders to begin adapting to the ecosystem era today.
The chapter cites seven reasons:
- 7 out of 10 of the most valuable companies are ecosystems. They are a role model and enemy image at the same time (Apple, Google).
- Ecosystems shift profit pools away from traditional businesses. Industry boundaries dissolve since ecosystems focus on integrating customer interfaces across human needs that transcend industry sectors.
- Ecosystems can respond faster and more flexibly to today's major changes. This means ecosystems have the inherent capability to facilitate diversity in solutions which is required to overcome the big challenges of today (e.g., the environmental crisis, climate change, pandemic health crises, etc.).
- Ecosystems operate highly cost efficiently.
- Ecosystems are faster and better in gaining data, insights and solutions than competing companies. Eventually, everything will become digital, transparent and connected.
- Ecosystems create dominant value propositions. In today’s fast-paced world, convenience and simplicity are top-of-mind for consumers and business decision makers alike.
- Ecosystems follow a winner-takes-it-all logic. First movers grow exorbitantly and leave late movers not in a red ocean (difficult to compete in) but in a black ocean (impossible to compete in).
In this chapter you will also learn to understand and simplify ecosystem complexity with human-centric thinking by a visual method to gain advantages of ecosystems. You will understand the dominant business logic of ecosystems, you will be a pacesetter instead of an also ran, a leader not a follower. In this market-leading role, you will be able to inspire and excite all levels of your organization from senior executives to managers and frontline workers.
“Stage 1 – Understand” deals with questions like:
- What is a business ecosystem?
- What is the difference between ecosystem and platform?
- Why are ecosystems the dominant business logic today and for years to come?
- What role can I play to create and capture value in the context of ecosystems?
The methodology and tools that are introduced in the first chapter focus on creating an E2H (Ecosystem-to-Human) mindset.
This involves two factors that are crucial to what makes ecosystems powerful in creating and delivering dominant value propositions:
- An operating model that is based on a collective identity instead of a single one; and
- A focus on human instead of functional needs.
Chapter One also explores what we refer to as the Ecosystem Strategy Map (including 10 Life Areas and 3 Roles):
Ecosystems ultimately fulfill human needs across all areas of life. Ecosystem services and products can be organized in ten Life Areas around the final customer in the center. They represent our lives holistically.
- Mobility: It is a human need to get from point A to B on land, on water and through the air.
- Health: It is a human need to stay physically and mentally fit. Access to proper sanitation and health care are fundamental human needs.
- Recreation: It is also a human need to restore energy and overall wellbeing through leisure time, relaxing, sleep and recreational activities.
- Work: It is a human need to earn money through work and, in the process, to create value for others.
- Consumption: Eating, drinking, clothing, personal care, and everyday errands are basic human needs.
- Spirituality: The search for meaning, enlightenment, transcendence, belief, and faith also constitutes a fundamental human need.
- Socialize: Humans long for love, sexual intimacy, belonging to family, friends and society.
- Education: Humans want to acquire knowledge and skills. They seek truth and want to understand the world.
- Entertainment: Another human need is to have a good time and enjoyment through entertainment.
- Living: The last human need – from an Ecosystem-to-Human (E2H) perspective – is to live in a safe, fair, stable, and comfortable environment.
With the release of our book in the coming weeks, we will introduce you to all there is to know about Business Ecosystems by explaining all aspects around the topic in the very first chapter, "Stage 1: Understanding", and giving you the right tools and methods to use.
In this series of articles, we will delve more deeply into the other chapters of our forthcoming book. In our next post – an overview of chapter two – you will learn more about ecosystem strategy and positioning.