Manage an ecosystem or it will manage you

Traditional management focuses on an atomised view of the relationships in a business. Relationships with employees, customers, suppliers, competitors, partners and the community are treated as mutually exclusive, individual & discrete transactions. We put all our relationships into a simple hierarchical structure.  

This convenient fiction is a classic example of organisational stupidity. Linear hierarchical choices are easier for us to use through than complex networks of relationships. Networks get messy quickly. We chose these simplistic view to make organisations easier to manage.  

In this simple model, relationships beyond the bounds of the organisation and its interactions are rarely considered, except under the categories of risks. In our disruptive networked world, every organisation exists in an ecosystem of complex networked relationships. We all need to adjust to making decisions in that ecosystem. If we keep managing to fictions, the ecosystem will take our influence and decision rights away.

So where’s the networked ecosystem?

No organisation is an island.  If you have one employee and one customer you have already begun to build a complex network in their relationships.  

We are increasingly experiencing the dynamic of a networked ecosystem as a result of following principles:

  • All the agents are connected: customers, suppliers, employees and the community are all much more able to connect, share information and collaborate. Importantly, they will connect share and collaborate whether your organisation exists or not.
  • Any agent can play multiple roles: An employee can easily be a customer, a supplier, an influential member of the community and even potentially a competitor simultaneously. The same could be said for any other agent in your ecosystem. Traditional linear thinking struggles to manage this. Just look how many organisations attempt to stifle their employees’ ability to connect with each other or play a role as customer or community advocates.
  • The pace of innovation brings down barriers: Traditional barriers like control of information, power or resources that kept agents isolated are coming down with the accelerating pace of innovation. It is far easier to shift between roles than ever before or to get access to information or connections that you need. If your organisation depends on barriers for its success, there is a great chance someone is working now to circumvent them.  
  • The tools of disruption help us see the system:  increases in networking technologies, data analytical tools and communication technologies increasingly help all participants see and manage the system

A social and natural ecosystem too

When we start to look beyond our traditional linear categories of relationships we can see a wider ecosystem around our organisations. This broader view of relationships helps us see the ecosystem in a fuller light:

  • We can see that our connections and our organisations contribute to social goals
  • We start to see the positive and negative environmental & social impacts of our organisation and its relationships
  • We see new ways to contribute
  • We can look to the relationships that occur beyond our traditional thinking and wonder what contribution our organisation can make or how we might leverage these relationships to add new value

Start Leveraging the ecosystem

With a new more complex view of the ecosystem around your business start asking new questions:

  • How does the wider view refine your organisation’s purpose?
  • What should you do more, better or differently?
  • How do you go faster if you leverage others?
  • What changes in the wider system benefit or harm you? What can you do with other players to have more of the good or less of the harm?
  • How do customers, suppliers, employees and others help you grow your business?
  • Where are the sources of value, the conversations, connections and opportunities in the system that you have been missing?

If you don’t ask these questions, somebody in the ecosystem else will.  There’s a good chance you won’t like their answers.

We are all dead

“If the rate of change on the outside exceeds the rate of change on the inside, the end is near.” – Jack Welch

We are all dead.

The rate of change external to each of our organisations is now so great that no organisation can ensure it is changing faster than the external system. Global interconnectedness, the rapid speed of ideas in a digital economy & new means of working and collaborating means that change will only continue to accelerate.

So if we are all dead what do we do? Change the game.

Jack Welch’s quote assumed that the organisation needed to generate enough change internally to beat the system. If you are a massive diversified conglomerate like GE, then that is a real challenge

Don’t beat the system. Become the system instead. Organisations need to design their structure, boundaries and processes to integrate with opportunities going on around them in that external change. Instead of hunkering down to fight off the change, organisations need to rethink their defenses. The best defense may just be a welcome:

Have an outward facing culture: If your organisation is looking inwards for your ideas and opportunities, you are dead. If your organisation, only worries about its competitors, then don’t worry they are dead too. Open your organisation up to look globally (that really means globally including Asia, Middle East, Latin America and Africa)
– Focus on opportunities to create an ecosystem: Allowing the system to shape your products, services and customers will accelerate your change. This can be achieved in many ways such as partnership agreements, an API or a customer collaboration community. Once you start to see and think about the system in which you operate, new opportunities to change and innovate will present themselves.
– Create agile & open edges in their organisation with the freedom to interact with external changes: hackathons, experiments, partnership agreements and a handful of strategic investments can generate a lot of exposure to change externally that will help the organisation adapt. Make sure your permission and performance processes actually give your people the opportunity to interact. They need to be able to move at the speed of the system and that means trust.
– Speed the sharing of information and execution in your organisation: Copy the system where you can. Use enterprise social. Use agile. Use design. Use minimum viable products. Hack, experiment and test away.
– Kill yourself first: What business model do you most fear losing? What product are you too dependent on? What customer can’t you lose? Tackle these challenges now. Engineer a way to change them or innovate like crazy in these spaces before others realise your vulnerability.