The investment landscape is changing at pace, and the traditional ways of working are breaking down. Generating value in today’s private markets requires companies to continuously reimagine their approach to competition, business models and organisational excellence.
In this introduction to our research ‘Winning in the Ecosystem Economy’, we look at how investors, managers and advisers can secure competitive advantage in the marketplace by identifying, developing and embracing an ecosystem framework - and why scrutinising and, indeed, understanding the ‘why, what and how’ of ecosystems, is instrumental to success.
Client / Customer first
Tech and automotive industries have long reaped the benefits of mastering the ecosystem economy, they have achieved this by adopting an entrepreneurial, outside-in perspective and a hyper growth model from all members.
When Steve Jobs and Apple created the iPhone, a digital platform of products on one device, Apple gave their customers something extraordinary. They had the entrepreneurial mindset to pivot away from a firm-only model to an ecosystem of shared value, growth and substance. Businesses who focus on making their product offering more relevant and compelling can do the same.
Orchestrator or Participant: what role should you play?
Understanding your role in the ecosystem framework and applying the appropriate governance model is pivotal to success. Like any effective company or team, choosing your role wisely can be the quickest route to value creation. Getting this wrong, however, can prove a timely and costly mistake.
Daily I speak with incredibly bright investors and business owners, some of whom play the role of ‘orchestrator’ - businesses which bring together the other participants, create new products and services, lead by example and have the resources to do so. Those resources could, for instance, include data strategies or technology services.
Others, meanwhile, will take on the role of the participant – these are businesses which join an ecosystem created by someone else and therefore must agree and adhere to the framework and governance already in play.
Understanding both these roles, working together in collaboration and getting it right can be of enormous benefit to all involved.
Solving business complexities for long-term success
Even the orchestrators who understand their role don’t always have the time required or the headspace to lead the ecosystem, leaving participant companies to go it alone. On the flip side, more times than not we see participant businesses trying to orchestrate and they end up building silos or disconnected black holes. The success of each individual firm is intertwined with the success of the wider ecosystem. Go it alone and it will be a costly mistake.
For today’s private market companies ready to embrace the opportunities offered by an ecosystem model, set aside budget, own this transformation, be brave and don’t shy away. Companies who fail to adapt and prioritise this integrated economy as a top strategic objective risk missing out on enormous opportunities and being left behind.
In the next 10-20 years the ecosystem economy could drive $70-80 trillion of revenue. Surely, it’s worth conquering.