“Ecosystems 101”: Summit Session Demystifies How to Engage in Emerging Shared Model

Posted By Jon Lavietes, Saturday, September 12, 2020

Ecosystems are the topic du jour in alliance management today, a fact that was reflected in the agenda for this year’s ASAP Global Alliance Summit. The Summit track “The Power of the Ecosystem” explored a variety of elements of this evolving partnership model, including a presentation on how to use them to acquire new customers and another that focused on novel capabilities. Since not everyone is steeped in ecosystems basics, it was only appropriate to feature an overview of sorts on the subject—call it “Ecosystems 101,” if you will. That task was enthusiastically undertaken by Claudia Kuzma, CA-AM, managing director and global ecosystems program leader at Protiviti, and Nancy Ridge, president of Ridge Innovative, who delivered the on-demand presentation “Demystifying the Ecosystem—an Interactive Conversation.”

The presentation began with a video of Ridge standing on the rocky shore of the Pacific Ocean looking down at the variety of marine life in the tidepools around her.

“Subject to harsh environment, this ecosystem is highly competitive, and yet all of these creatures rely on each other to fulfill their purpose and thrive,” she explained, setting up an “ecological metaphor” to which she would return throughout the presentation.

The New Paradigm: Decentralized Platforms Replace Hub-and-Spoke Ecosystem Model

Of course, the “science” of alliance management is similarly accelerating the development of business ecosystems, which Kuzma illustrated with a figure from analyst firm IDC: partners that adopt ecosystem business models will grow 50 percent faster than those that eschew them. So how should executives begin wrapping their minds around the pursuit of an ecosystem play? It helps to understand that technology ecosystems themselves are undergoing a transformation of their own, from a model with a large player at the center—such as Apple and its vast network of developers, accessories, content, and end users—to a “shared model,” a “many-to-many” platform where no one company serves as a hub around which thousands of “spokes” revolve.

Ridge spoke of cloud ecosystems company Tidwit’s automated and distributed “learning and enablement” platform, in which participants join through APIs, data is kept separate and secure, and content is automatically updated and delivered intelligently to users at an optimal time. The Apple model “is very difficult to scale, and requires a lot of capital, both human and financial,” said Ridge. “This shared platform is the new paradigm.”

The pandemic is accelerating the growth of shared ecosystems. Ridge noted that the state of California connected with labs across state and local hospitals to provide drive-through COVID-19 testing. Kuzma cited the example of telemedicine, which has become indispensable in the context of self-quarantining; behind the scenes, many technological parts from different organizations are working together to enable patients to talk with a physician by simply registering and clicking a few links on a mobile device.

Total Solutions: Customer-Focused, Senior Leadership–Approved

A similar trend is taking place in the B2B world. According to Ridge, Salesforce acquired Tableau in order to enable clients to drive insights out of their data that would enable them to “expedite intelligent, connected customer experiences which, again, drove innovation and accelerated it for their users.”

Ridge continued to hammer the point home that customers are at the center of these ecosystem models—or should be—and that satisfying their needs is often made possible through coopetition.

“Today, total solutions are delivered as managed services. Now, behind the scenes, many of those companies that used to be competitors are working together, but what the customer sees is a complete solution that is brought to them as a seamless experience.”

As she spoke over a slide that listed the building blocks of ecosystems—reaching new customers, building new products and services, enabling more efficient

business operations, educating clients, accelerating innovation, and creating awareness of specific needs—Kuzma stressed the importance of balancing the objectives of the individual company and the group and obtaining executive sponsorship of this new model.

“That awareness and collaboration, and just showing the organization how the ecosystem contributes to the organization’s greater goals, is really important,” she said.

Building or entering an ecosystem is easier said than done, though. According to an Accenture survey of 1,200 executives, 40 percent felt their organizations didn’t have the capacity to build out the structure, deliver the value exchange, monitor their roles in the ecosystem, and manage relationships. The biggest barriers: cybersecurity, IP protection, and structuring ecosystem governance. In fact, these were the primary obstacles to telemedicine before COVID-19 created the urgency around the service, Ridge recalled.

Darwin in the Ecosystem: Learn on the Fly, Fail Fast, and Adapt Accordingly

The presenters were setting up the larger point that companies shouldn’t shy away from entering ecosystems because of the technical complexities. Rather, they should get comfortable with learning on the fly, failing fast, and adapting their ecosystem model over time.

“There’s going to be risks and failures along the way,” said Kuzma, who added later in the presentation, “It never feels good to fail, right? But we always learn something from it. When we embrace those learnings and we advance forward that’s when we begin to see those roots of innovation.”

“Adaptive programs are going to be so important. Folks are going to have to build programs that can adjust over time, but also dynamically,” said Ridge. “Not all species survive, but the ones who do have that adaptive, responsive mindset.”

How do you go about selecting ecosystem partners? First, identify the market opportunity—the customer need that has yet to be filled. From there, align with the dominant player in that space, “the core player [that] can really set the pace, driving innovation and pushing the rest of the participants to coevolve and stay relevant,” advised Ridge. From there, you can start to layer infrastructure providers and service delivery partners that will build out the end-user experience.

A Rising Tide Delivers Growth, If Not Comfort

Keep in mind that the more diverse the set of players in your ecosystem, the faster you will churn out novel solutions.

“The more diverse your perspective, the greater your innovation is going to be and the broader the market that you are likely to engage with. Unlike the old models where companies used to operate as competitors in their separate silos, today the new environment disregards that competition in favor of contribution and collaboration, meeting the needs of end user,” said Ridge. “A rising tide raises all boats.”

Kuzma then laid out a roadmap for assembling an ecosystem strategy ordered in the following steps:

• Awareness – How are your customers accessing your products and services?
• Landscape – Who are you working with today?
• Strategy – Based on your strategic drivers, whom should you partner with?
• Framework – Develop KPIs, policies, procedures, communication, and change management.
• Align – Are your partners in position to deliver on your goals and the customers’ needs?
• Source – Add talent and technology that aligns with business objectives.
• Innovate – Enhance the customer experience—what needs to change?
• Optimize – “The sky is the limit,” said Kuzma.

In making this journey, Ridge urged senior leaders to prioritize innovation and engage stakeholders in sales, marketing, finance, legal, and other parts of the business “to lay out that roadmap first internally under that leadership guidance to reach beyond the enterprise to the market at large.” She added that you may not have to recreate the wheel—an ecosystem might already exist that is right for your organization and accepting new members.

Ridge closed by echoing Kuzma’s endorsement of the “fail-fast” mentality.

“There’s no growth in the comfort zone and no comfort in the growth zone,” she said.

Find out how Protiviti’s 2020 ASAP Alliance Excellence Award–winning “i on Hunger” program exemplifies how ecosystems can not only deliver great customer experiences but also change the world, in the estimation of both presenters.

(For the full story of i on Hunger and the other ASAP Alliance Excellence Award winners, don’t miss “Paragons of Excellence” in the Q3 2020 Strategic Alliance Magazine, coming to inboxes and mailboxes soon. The Q3 edition will also have a “Focus on Ecosystems,” which will consist of three articles on this business model that is fostering digital transformation and evolving the alliance management discipline.)