The days of the self-sufficient and self-sustaining business are long gone. Business owners must recognize the need to join forces with other businesses in order to flourish.
Here is simple assumption for you to get your head around: Businesses will always seek to establish new types of partner relationships that clearly define mutual gain for the parties involved. Fairly straight-forward, right?
Of course it is! And, it’s because of this hypothesis that businesses of all sorts and sizes are forging new commercial arrangements with one another. As a result, immense networks of interdependent parties have emerged. In turn, each one of these forms unique ecosystems from which all of the member businesses benefit.
With the continual advancement of technology making inter-business bonding easier, you can be sure that the evolution of these New Economy Ecosystems will continue. That said, as a business owner you’ll need to see how and where you can fit. Here’s why:
Rationale for Ecosystem-Building
The game has changed. The days of the self-sufficient and self-sustaining businesses are long gone. The global marketplace requires businesses to establish highly integrated and cooperative relationships with one another. It rewards speed and flexibility.
Consequently, new inter-company relationships continue to be established in order to help firms respond to changes in their respective markets.
Businesses cannot afford to be an exception. Ecosystems seek to forge new types of relationships with their members that provide economies of scale and greater reach than can be achieved by any single entity on its own. Indeed, joining and contributing to larger ecosystems is essential to survival – especially for smaller businesses.
However, there are several implications that must be considered, including:
1. New strategies will need to be created that can leverage the opportunities that ecosystem participation offers.
2. Similarly, innovation will be a key driver for flourishing within one’s ecosystem. Thus, new ways of thinking and doing will need to be considered and implemented as opportunities to introduce new products and services emerge faster than ever before.
3. As a result, speed counts! Therefore, steps will need to be continually taken within every business to become more agile in order to keep up with the demands of ecosystem partners and their customers.
4. Businesses will have to work with a larger industry community, including competitors, in order to establish new kinds of business arrangements that work within the ecosystem. Exposure of one’s competitive strategies and protection of associated trade secrets will continue to be huge considerations when seeking advantages from ecosystem membership.
5. Existing contracts and agreements may need to be embellished and new rules created, in order to better support the re-definition of attendant business relationships.
6. Lower-level business managers must be on the “look-out” and be prepared to explore new ways of defining their firm’s relationships with the providers that they work with – continuing to be keenly aware of new opportunities to leverage existing partner relationships in novel ways to drive advantage.
7. Front-line staff will need to be trained in contract administration in order to better manage the business relationships that they are responsible for maintaining on behalf of their companies
There is no doubt that, as the new economy continues to evolve, it is imperative for business leaders, regardless of size, to actively seek-out opportunities to participate in broadening their reach and capabilities through participation in business ecosystems. They must recognize the need to join forces in a larger community of players to remain vital and prosperous in the years ahead.
To close, this article only touches the tip of the iceberg regarding business ecosystems. So, please feel free to continue to drive the discussion by offering your ideas and comments below or reach-out directly to me. It’s an important topic that deserves more attention.