Don’t let the wrong thinking get in the way of a budding ecosystem

Just how does a company create a successful ecosystem via modern digital platforms?

While there are technical answers and strategic planning answers to this question, this blog will deal with the basic must have’s in your strategic thinking. How you think strategically is critical since that same thinking becomes embedded in your offering, processes, and operational activity.

First, you need to know the golden rule of digital platforms and their ecosystems:

Ecosystems grow through increasing amounts of meaningful interactions.

Meaningful interactions are defined by the ecosystem – and you have to adjust. If you don’t adjust, someone else will create the ecosystem desired and everyone on your platform will migrate elsewhere.

How do you know when you are limiting the ecosystem’s growth?

First, the ecosystem doesn’t grow. Companies and people you want in your ecosystem have no patience with those who don’t play collaboratively so that everyone can win.

Second, some in your ecosystem will tell you the mistakes you are making. Make sure you listen because they are relating a bigger, deeper truth. Listen even though it is uncomfortable. Your platform and your product/service offerings will be better for it.

Usually, companies apply old ways of thinking to new tools and techniques. That is not a working strategy. Let’s look at some of the old ways of thinking so that you can adjust your strategic thinking to avoid shutting down your platform before it even gets going.

Old way of thinking #1:

I can and will control every aspect of what is allowed transaction-wise.

This is an old way of thinking and comes from a command and control mindset that is now leaving much of corporate America. This doesn’t mean everyone who retires thinks in old fashioned ways. However, there is a stereotype for a reason. More people than ever are college educated and want to use that education in innovative ways for you – without adapting to your point of view. More globalization allows interactions with more people from around the world and each brings unique insights you need. Social media and new technologies have allowed people to collaborate in more meaningful ways than ever before and they want to continue to collaborate without being told what tasks they are allowed to do (especially when they don’t work for you). And more than ever before, people want to put meaningful input into a system they believe in and, they want to see the input taken seriously and integrated.

No, you don’t have to accept everything, but you do need to be open. If your company dictates tight and narrow ways platform transactions can occur and doesn’t open up for creative application brought by your extended partners, then you’ve limited growth for everyone. Remember, ecosystems are partnerships. All partners need to see and experience growth. Partners provide you with new data and information that you can use for your business. Partners also need to see the growth enhancement for their business as well. If you don’t allow this, then the digital platform is just an electronic,

transactional procurement entity or a forum for discussion but little profit. Either way, it has a limited future.

Old way of thinking #2:

I can and will control every aspect of what is allowed product/service offering-wise.

Hey, they want to use my platform and are basing their growth off my tools, so I have the right to dictate narrowly how I am going to allow people to interface with my products/services. That was tried before by Apple – didn’t work too well. Apple adapted and look at its success.

Not too long ago and even still today, lawyers create contracts stating all innovation during the time of the contract, whether applicable to the project/service work or not, is owned by the hiring company. This type of thinking stifles innovation, stifles the ability for others to help you grow by integrating your product/service into their offering, and ends up pushing people to look for more collaborative work spaces with greater future potential.

What if Uber had told the people who drive for it that it was absolutely against the rules for drivers to put a sign up in their windshields stating that the driver will take Pokemon Go players to their next destination? Crushing the real time innovation would have also crushed revenue growth for both drivers and Uber. People are smart, creative, and innovative. If it is not illegal, against cultural norms in the area, and doesn’t negatively affect safety or your product/service, let the growth and innovation happen and learn from it. Integrate and support the creativity and innovation.

Old way of thinking #3:

I can and will compete with my ecosystem.

This is a great reason for your ecosystem to abandon you, or never sign on in the first place.

You must support and enable your ecosystem. You must continue to build new capabilities for your ecosystem. The minute you begin competing against it; you lose.

Your job is to provide a platform that enables interactions. You can’t chase shiny objects that appear in your ecosystem because they look good and you think you can do the same thing. What happens when you chase those shiny objects? You lose credibility as the system supporter and enabler. Cynicism moves front and center. Trust is lost. You’ll see this on your revenue statement because chasing shiny objects means you’ve lost focus – and it takes focus to grow revenue. You might get a short term revenue bump, but it always comes at the cost of longer term and bigger revenue losses. Why? Because first, you probably don’t have the expertise to really take advantage of the opportunity. Second, and even more important, the people who pay to play on your platform, whether by bringing in revenue up front through access fees or later as a percentage of what is sold, will not tolerate a platform that competes with them.

This requires a new set of questions for upper management. The questions change from “How can we compete in this new shiny space?” to “How can we enable our ecosystem collaborators to compete more effectively/in new ways in the marketplace so

that they continue to generate increasing revenue for us?” The first question is a win-lose scenario. The second is a win-win scenario. You want the win-win.

Platforms require new management thinking styles. Make sure yours supports and enhances your budding ecosystem. Only then will the cost of technology and tool development pay off.

What are you doing to enable and support your ecosystem?

Key words and concepts: digital platforms, collaboration, strategic thinking, growth, ecosystem Cynthia Kalina-Kaminsky with Process & Strategy consults with and provides training for organizations eager to increase their competitive value by helping enable growth, align performance, make and move product (even when the product is a serving of electrons). She has been invited to teach SCOR (Supply Chain Operations Reference model) in Baton Rouge this October. SCOR is the framework Fortune 500 companies use to increase their agility.