July 17, 2023
How to strengthen the value of your Ecosystem
Ecosystems are a core business asset. They are also a key part of a successful strategy. Although they’ve always been important, today your Ecosystem is absolutely crucial, especially if you’re a small business or a start-up. Here’s how to drive Ecosystem value.
An Ecosystem is a dynamic and interconnected web of relationships that creates and captures value through semi-coordinated sharing of resources.
To put this in context, customer expectations are evolving at unprecedented pace. This makes business agility essential. Today, businesses need to be innovating, collaborating and co-creating more than ever. Having healthy business Ecosystems can help your business be agile and thrive – and their absence might see your business stagnate or even fail.
Forward-thinking businesses that leverage their Ecosystems effectively can gain a competitive edge, access new markets and remain constantly relevant by anticipating where a market is heading. Ecosystems not only provide a solid foundation for growth, they also enable businesses to detect changes early, adopt successful survival strategies and adapt to shifting circumstances. For many businesses, having strong Ecosystems was key to surviving the turmoil of the COVID pandemic.
We won’t lie: fostering healthy business Ecosystems takes work. The kind of work that can take time to pay off and might feel like an unwelcome distraction from daily operational reality. That’s one reason many businesses fail to harness the power of their Ecosystems when designing business strategy.
It’s time to drop the old-school mindset of competition over cooperation. Today, successful businesses are actively nurturing their Ecosystems to unlock new opportunities, enhance value propositions and gain a significant competitive advantage.
Three ways to build your Ecosystem advantage
Ecosystems don’t function in the transactional manner of a supplier-buyer relationship. Instead, Ecosystems foster an exchange of mutual value, often without cash changing hands. This might be the co-creation of a new product idea, a regulatory barrier to entry, an industry code of conduct or standards of interoperability. In a healthy Ecosystem, mutual benefit is created among members.
Keen to drive your own Ecosystem advantage? Here are three steps you can take now to maximise the value of this key business asset.
- Build trust with the best players in your industry.
Start by identifying the key players in your industry. These may include suppliers, customers, complementary businesses and industry influencers. Then, proactively engage with them to nurture meaningful relationships and collaboration opportunities.
One effective tactic is to use communication and knowledge-sharing platforms. These include industry events, conferences, webinars or even online forums. By sharing valuable insights, exchanging ideas and building rapport, you establish yourself as a trusted partner within the most traditional of all Ecosystems: your sector.
Earning trust in your industry Ecosystem will unlock potential collaboration and help build your brand. Yes, some of these potential partners may be competitors, so stay within the boundaries of competition law. Outside of those necessary guardrails, you may be pleasantly surprised by what emerges.
- Foster dialogue beyond your industry and sector.
A thriving business Ecosystem fosters co-creation and innovation in unexpected places. Look beyond traditional industry lines to diverse players and contributors.
For example, think about start-ups, government agencies, entrepreneurial businesses, companies in different sectors and emerging technologies. Look beyond the obvious.
Before you establish formal partnerships, joint ventures or innovation labs, you might start small with a single event. For example, encourage cross-pollination of ideas and facilitate open dialogue between diverse groups of organisations around a shared customer problem or common experience. Tap into the collective intelligence of your Ecosystem and explore how resources might be utilised differently. Once you develop trust, you can pool resources, knowledge and expertise to develop innovative solutions and seize new market opportunities together.
- Embrace Technology, Data and Platform models.
As you build your relationships with industry players and adjacent innovators, consider using technologies that facilitate better ecosystem collaboration and information sharing. This could be a shared data repository, a collaboration portal, or even a customer relationship management (CRM) system.
By using a technology platform to underpin your ecosystem, or joining a technology platform that has already developed an ecosystem already, you can access seamless interactions, optimize workflows, and extract valuable insights that drive competitive advantage.
When considering a platform-based business strategy, consider whether your business could be the core of that platform or would be better off as a complement to another business that can act as the core. You might want to first test some of these plays at lower risk through joint ventures, for example.
Even simple businesses benefit from ecosystem strategies.
All kinds of businesses, irrespective of how simple, complex, large or small, can benefit enormously from their ecosystems. Taking practical steps to enhance yours, you can transform your business value and growth potential. Your brand and reputation will benefit too.
For an Ecosystem to drive your business’ value you also need to build trust, brand and reputation. This takes time and effort.
There are many rich, active and functioning ecosystems out there already. Start by identifying and joining these and build your ecosystem investment plan from there.
Interested to learn more? Read our blog on Building Brand Equity. Did you miss our other article on Ecosystems? Read more about Ecosystem essentials.
