The idea of a business ecosystem is not new. Throughout history, partnerships and systems have formed to take advantage of efficiencies and solve problems bigger than any one organization.
But today’s problems have grown greater in scale as we face the challenges of climate emergencies, immigration crises, necessary healthcare and societal reform, and much more. These global challenges, along with enhanced technologies, shifting customer preferences, and an unprecedented pace of change, are demanding and facilitating more collaboration between organizations than many ever thought possible.
Ecosystems, whether they are formed through partnerships, M&A, or coopetition, are a new reality for companies across industries. They can help organizations serve a greater mission, access additional subject matter expertise, improve speed to market, and satisfy customers.
But relationships across ecosystems can be complex. Earlier this month, Thinkers50, the Business Ecosystem Alliance, and Haier delivered Ecosystems@Work, a dialogue featuring strategy leaders Patricia Miron (Integrated Strategy and Operations General Manager of the American small, medium, and corporate segments of Microsoft) and Sukanya Soderland (Chief Strategy Officer of Blue Cross Blue Shield of Massachusetts and winner of the recent Zero Distance Award).
These two CSO leaders shared five necessities for an ecosystem that delivers more value with less friction:
- Align incentives
- Build trust and empathy
- Redesign internal processes
- Practice good governance
- Empower teams on the ground
The competitive landscape has changed. Partnerships are shifting from a supplier hierarchical model to a community approach that benefits all members. According to Patricia, Microsoft partners used to be used as only a distribution channel, but in the past 5-6 years they have become a core part of the business. This starts at the CEO level with alignment on goals and vision, then moves to an alignment of incentives. Sukanya recommends an outcomes-based approach by shifting from a fee-per-service model to a fee-per-value system.
Consider the following questions:
- What is the desired outcome for everyone in the ecosystem?
- Are our incentives structured to encourage collaboration or competition? How can we shift that structure to prioritize delivering value across the ecosystem?
Build trust and empathy
Once incentives are aligned to a shared purpose, members of the ecosystem can trust each other. This is necessary for open access to data via cloud computing. Sukanya explains that digitized data in the healthcare industry has created greater need for trust. Increased trust and empathy can improve efficiencies and can even expand the ecosystem.
- What key issues have come up around access to data where trust may be an issue?
- If we were to practice trust, what other partnerships might we form?
Redesign internal processes
Microsoft’s web of partnerships allows it to serve customers on a global scale while offering highly technical local customization. This takes a transition. Your organization can no longer take a one-sided approach, but must imagine what the ecosystem needs to thrive. Sukanya recommends looking across the entire customer journey.
- What does the shared vision for our ecosystem look like?
- How does each organization’s role contribute to that vision?
Practice good governance
When designed correctly, an ecosystem can become an efficient, circular arrangement that serves its mission and empowers all members. Patricia suggests performing a quarterly review by asking members of the ecosystem:
- Is this relationship beneficial to you?
- Are you getting the margins out of this that make sense to you?
- What could we change?
Empower teams on the ground
Innovation and creativity most often come from ideas and problem-solving at the customer level. Patricia explains that the best ecosystems build in trust and authority for teams on the ground to bring the right mix of speed, orchestration, and subject matter expertise to customer-facing teams.
- How can we empower customer-facing employees, whether they are in our organization, a partner employee, or an ecosystem employee?
- What information do they need to make decisions with speed and agility? What information do they not need?
The right ecosystem can transform your industry. According to Sukanya, at Blue Cross Blue Shield of Massachusetts, they help healthcare members get access to the right care at the right place and time, in the right way, and at the right price. Follow these five requirements—aligned incentives, trust and empathy, evolved internal processes, good governance, and empowered teams—to create an ecosystem that works.
For more information, Thinkers50’s new e-book, The Power of Ecosystems, offers a deeper dive and best practices on how ecosystems across industries can benefit their respective members and bring organizations closer to their customers.