Broad business networks
Independent networked organizations
Temporary networks of innovation
Global networks of partners…
… Whatever you prefer to call them, innovation ecosystems are a core element in the growth of any organization. The reason is simple: having a diverse “entourage” of past, present, and future open innovation partners with whom to share risks and ideologies as well as reduce new product or service development costs represents the perfect context for value networks to emerge and for entrepreneurship to flourish. Companies and consortia to the likes of Salesforce (client relationship management systems), IMEC (Nano electronics), Korean Air (air travel) or P.R.O.F. (healthcare) are prime examples of how ecosystems can and should be used to create value no single organization can create on its own.
But what are these arrangements exactly and how can they be leveraged better?
One definition I like to use is the following:
“a loosely interconnected network of companies and other entities that coevolve capabilities around a shared set of technologies, knowledge, or skills, and work cooperatively and competitively to develop new products and services”
(reading tip: Professors Satish Nambisan and Robert A. Baron have written extensively on the topic)
These loosely coupled networks are characterized by the absence of a formal authority, strong dependencies among members (remember the “formation flight” metaphor?), a common set of goals and objectives, and a shared set of (complementary) knowledge and skills used to develop unique customer value propositions. Put simply, innovation ecosystems combine individual elements such as leadership, culture, capital markets, and open-minded customers constantly in new and complex ways.
While leveraging the power of an innovation ecosystem is both a science and an art, here are three tips on how to do it better.
1. Know your partners early on
Before you can fully profit from the emergence of an ecosystem, it’s essential to know who exactly is part of it, what relationships exist between partners and what skills and know-how those partners bring to the table. In other words, interdependencies must be made explicit. That is why initiatives like Lancaster University’s “mapping design innovation ecosystems” project or Ron Adner’s famous “value blueprint” are important resources to start from. Alternatively, you can construct your own way of depicting the arrangement of the elements that are required to reach the common objective or deliver the value proposition.
In addition to mapping the ecosystem and knowing your existing partners, selection of future partners is also important. Robert Lynch’s Strategic Alliance best Process Workbook published by the Association of Strategic Alliance Professionals back in 2001 provides a handy (and frankly, timeless) three-dimensional checklist for partner selection that combines strategic, operational and chemistry fit criteria.
2. Channel creative tensions in the right direction
Innovation ecosystems involve a wide array of actors that interact both positively and negatively as pairs and as groups. Therefore, channeling creative tensions in the right direction is another way of leveraging the power of the ecosystem better. Jan van Hecke, founder of the Patient Room of the Future (P.R.O.F.) healthcare think tank in Belgium, for example, creates constant dialogue between his 300+ partners – among them Philips Lighting, Vitra, ISS, IMEC, Deloitte, B-Post, and Akzo Nobel as well as various other manufacturers, architects, user groups, schools and universities - with the help of brainwave sessions (= a type of brainstorming technique).
Helping partners understand the common vision as well as see the ecosystem as “pure innovation” rather than a “business” is not always easy but once this tension is managed and individual expectations understood and met, new concepts come forward. In P.R.O.F.’s case, proficiency in managing interactions has translated into resilience in the face of external challenges as well as several cutting-edge concepts such as the Patient Recovery Room of the Future – a new model for day hospitalization.
3. Orchestrate (only) as necessary
A final way to leverage an innovation ecosystem better is by exercising so-called leadership in absentia. Counter-intuitive as this may seem, purposefully removing oneself from the orchestrator role can have many advantages, including empowering other ecosystem partners (i.e. possibility for others to lead), allowing the ecosystem to evolve into unexpected directions (see how Korean Air’s ecosystem is continuously making additions – including organic farms and start-up accelerators), and letting members find each – the latter being an indication of the maturity.
Exercising control only as necessary is not an easy task, however; trust, emotional intelligence, a full understanding of ecosystem’s dynamics and purpose, as well as continuous tweaking of the underlying structures to make sure they serve the needs of the partners all need to come together in one coherent strategy.
Interested in learning more about the topic?
Here are some titles to start from.
Shaughnessy, H. (2011) Evolution of the innovation landscape
Thomas, L. D., & Autio, E. (2013). The fifth facet: The ecosystem as an organizational field.
Leten, B., Vanhaverbeke, W., Roijakkers, N., Clerix, A., & Van Helleputte, J. (2013). IP Models to Orchestrate Innovation Ecosystems.
Nambisan, S., & Baron, R. A. (2013). Entrepreneurship in Innovation Ecosystems: Entrepreneurs' Self‐Regulatory Processes and Their Implications for New Venture Success.