How to Orchestrate a Successful Innovation Ecosystem
Over the next two years, your organisation is likely to fall into one of two main categories:
- The organisation that orchestrates an innovation ecosystem.
- An organisation that participates in an innovation ecosystem.
Innovation ecosystems (also known as business ecosystems) link stakeholders, resources and activities in order to co-develop new and impactful solutions, offerings, or mutual value that could not be achieved by one party alone. Most ecosystems of today will utilise digital platforms to help form and drive the stakeholder relationships, so we can include digital ecosystems for the purposes of this article.
Organisations that choose to orchestrate ecosystems will reap the benefits of being at the heart of an industry-shifting solution, or of being at the core of a cross-industry customer value chain. However, these organisations also take on the complexities of harmonizing all the stakeholders towards the successful achievement of a common vision.
Based on my experience, here are some golden rules to follow that will minimize any risks of taking on the orchestrator role:
Ensure you have the right talent leading the ecosystem
Leading an ecosystem is like conducting a symphony for a musical orchestra. A conductor leads different people, playing different instruments, who must all make the rights sounds at the right times to produce a harmonious musical piece. Similarly, those leading an ecosystem must ensure all the right puzzle pieces from a variety of different organisations are all in play at the right points in time — while all working towards the same overarching vision.
This means that you need very strong leaders who will drive the achievement of the big picture, while moving many complex puzzle pieces into their places — and all this while things unfold in unexpected ways in real time.
You will need talent with the rare ability to ‘connect-the-dots’ between multiple organisational and individual stakeholders, their relationships, the value they can bring and capture, the systems being developed, the solutions or offerings being produced and the lay of the land of the industry or industries in which the ecosystem is being built.
A clue to spotting these types of leaders is that they are always drawing strategic diagrams that help them find and cement these links. They will be the first to use whiteboards during meetings to communicate the links they are making in their minds.
It is important to note that ‘connecting-and-driving-the-ecosystem-dots’ is a very different skillset to project management or supply chain management. Many recruiters mistake project managers / supply chain managers, business developers and network builders for those with the ability to enable full-scale ecosystems.
Enable smoother integration across customer value chain components
A traditional customer value chain would see a customer buying (a couch, for example) from a leading retailer. The retailer would ensure the customer can pay for the couch online, include discounts and value-adds, would have it delivered safely to their door and follow up with a customer satisfaction call. An ecosystem customer value chain could see the same customer using a single- entry point to buy the same couch, then book a holiday, order their fast-food as well as do their banking.
A successful ecosystem will explore customer groupings versus finding target market customers for a product.
The use of better language descriptors that fully encompass ecosystem customer groups is now becoming increasingly important.
In the above example, a customer grouping could be ‘convenience shoppers’ or ‘discount shoppers’ versus a retail customer or a travel customer.
Customer groups can also be formed by integrating customer segments such as age and stage of life. For example, with new skillsets being required for a new world, a university student and an executive can both be offered the same learning programs. This customer grouping could be called ‘future orientated learners’ instead of segmenting the customers into ‘university students’ and ‘executive learners.’
Break down as many silos as possible
Orchestrating an ecosystem requires the dismantling of silos. Most organisations still have too many silos in play given the rapidly increasing need for ecosystem thinking and behaviour.
Start with your internal silos — how can you get departments and units to work together with the ecosystem that your organisation is orchestrating as their common project?
Then look at your product or solution offerings as well as your partner product or solution offerings — where are the links and how can these offerings be brought together in the ecosystem? This will help break down external silos.
Explore existing system overlap (both internal and partner systems) and find ways to synthesise these systems into ecosystem platforms that enable customer groupings, the formation of multi-stakeholder end-user communities or cross-industry reach.
Lastly, look at prevailing industry or societal goals such as managing the spread of the pandemic in the hospitality industry, or sustainable development goals for humanity. Find common purpose in attaining these goals and use the common purpose as way to attract the right role-players to your ecosystem.
Become the organisation at the centre of the technology that drives an ecosystem
The organisations at the hub of the software, the technology, the data capabilities and enabling API’s to link to partner technology will be the ones who succeed at orchestrating ecosystems.
This applies to digital ecosystems as well as innovation, business or social innovation ecosystems, as it is almost impossible to not engage with technology in one form or another in any ecosystem strategy.
This does not mean that your organisation must develop new technology from scratch. You can bring existing technologies together and be the driving force behind this exercise.
Two technology components are required here: one that enables the ecosystem role-players to collaborate, co-create, co-innovate and communicate freely across silos and one that brings the ecosystem offering or solution to life. The best ecosystem orchestrators will find ways to combine both technology components into one smooth system.
While more of us are co-working across borders online, it is important to not neglect the need for face-to-face interactions and physical spaces when orchestrating an ecosystem. At the end of it all, human connection and authentic relationships will be the key ingredient of a successfully orchestrated ecosystem.
Validate the entire ecosystem and not just the solutions that result from the ecosystem
Many of us have been exposed to methods that enable us to get to a minimum viable version of an offering including lean startup, design thinking, design sprints and jobs-to-be-done methodologies.
The rise of ecosystems requires a broader kind of validation ensuring that the right combination of boundary-spanning stakeholders (together with the right structures) can produce, iterate and modify successful, impactful product offerings and solutions that uplift society.
Organisations that take on the orchestration role will need to be well versed in proving a minimum viable version of the entire ecosystem before going big, in order to reduce risk and avoid unnecessary expenditure.
Organisations that boldly instigate and drive ecosystems that deliver multi-faceted, multi-impact offerings and solutions are likely to become our next success stories.
New types of talent, new skillsets, new ways to integrate customer segments and bold technology integrations will keep emerging between now and 2025 as more organisations either orchestrate or participate in innovation ecosystems.
The only question that remains is which role is your organisation going to play?