Ecosystem Leadership

Updated: Jan 3, 2019

Ecosystems will change the way how leaders communicate.

Apple, Google, Microsoft, Facebook, Amazon… the world’s most valuable brands are platform companies [1]. They orchestrate huge ecosystems around the globe, letting traditional business landscapes disappear. While platform technologies are transforming business models and related products, there is an enormous transformative power impacting the management cultures of organizations. The next big breakthrough might be a leadership disruption. If we want to participate in the new way of organizing economic activities, communication will be the key.

Communication is the key to ecosystem leadership | Ambidextrie | Dr. Julia Duwe

According to Harvard professor Marco Iansiti, business ecosystems are defined by "loosely interconnected participants that depend on one another for their effectiveness and survival" [2]. They cultivate symbiotic, complementary relationships. Within a platform ecosystem, a keystone player offers a platform and shapes the rules of the system. He „keeps value within the ecosystem by making participation in the ecosystem attractive“ [3].

"Ecosystems are distinct forms of organizing economic activities" (M. G. Jacobides)

London Business School professor Michael G. Jacobides proposes that „ecosystems are distinct forms of organizing economic activities that are linked by specific types for complementarities“ [4]. In his research article "Towards a theory of ecosystems", Jacobides offers a direct link between organizational activity and these new economic relationships called ecosystems.


VUCA everywhere

While we experience an economic world with markets shaped by platforms, companies rarely adapt their established organizational structures to the mechanisms of ecosystems. Driven by the pressure of the core business, firms care too little for the urgent need to change the internal rules of the organizational game – even though a new approach would be crucial to navigate in the highly volatile, uncertain, complex, ambiguous (VUCA) platform economy.

Leadership: Top-down transmission of information vs. facilitating network collaboration

Towards a collaborative culture

Listening to Geoffrey Parker, research fellow at MIT’s Initiative for the Digital Economy, being successful with a digital platform, depends to a large extent on the ability to collaborate in ecosystems [5]. According to this mechanism, leaders in an ecosystem environment would create the highest possible value for their company, when they shape the overall system and support collaboration beyond their direct sphere of action. Their task would be to get the right participants involved in the value creation of the ecosystem. However, according to the results of a recent study by Accenture on innovation ecosystems,„the operating models and cultures of many companies make them unfit for effective participation in a digital ecosystem“ [6]. There is a „non-collaborative culture".

If we want to develop a collaborative culture and the capacity to be profitable in ecosystem structures, this starts with the insight: as an individual player I will not be successful anymore. I need to share and collaborate.


Whereas leaders for decades have had control over a defined group of people, they now let go and start shaping a dynamic system of communicative interactions instead. Leadership will be about orchestrating company-wide teams, customers and different partners outside of the company. In this context, the concept of the omniscient leader does not fit in this world anymore. But more importantly, the manager who knows everything, can hardly be found.


Building dynamic capabilities for networks and ecosystems

Getting prepared for the „VUCA“ world, means that companies build dynamic capabilities in the field of complex networks and ecosystems. For example, in agile organizations new roles and structures are being created that dissolve the strict interdependency of functional and disciplinary leadership. New leadership roles are introduced that enable leaders to flexibly connect different teams in network systems. In adaptive organizational structures, leders are increasingly concerned with strengthening the role of the team and enabling communities to organize and regulate themselves.


In these cooperative organizational structures, communication turns out to be the key. At the core of the leader’s (daily) business is [7]:

  1. connecting the right people,

  2. facilitating communication and collaboration among the different players and

  3. orchestrating the communicative interactions

against the background of the company's platform strategy.


Starting with small changes

Getting started today, means to ask oneself: Do I give answers or do I ask the team? Do I decide top-down behind closed doors or do I create space for cross-functional collaboration? Do I prevent communication across hierarchies or do I create an open-door culture? Do I control or do I trust? Small changes in our daily communication - less top-down transmission of information, more facilitation of network collaboration - will already lead to a change in the system.


The change to a leadership culture that supports the growth of ecosystems is based upon a common understanding of communication among all participants: From letting go "command & control" to facilitating communication across interdisciplinary, cross-functional and networked teams.



Read the German version of this article at Springer Professional: https://www.springerprofessional.de/leadership/unternehmenskultur/fuehrung-im-oekosystem/15940648



REFERENCES


[1] https://www.forbes.com/powerful-brands/list/


[2] Iansiti, Marco; Levien, Roy (2004): Strategy as Ecology. In: Harvard Business Review, March 2004. http://info.psu.edu.sa/psu/fnm/asalleh/IansitiLivienStrategyAsEcology.pdf


[3] Reeves, M.; Haanaes, K.; Sinha, J. (2015): Your Strategy Needs a Strategy: How to Choose and Execute the Right Approach. Boston: Harvard Business Review Press.

[4] Jacobides, Michael G.; Cennamo, Carmelo; Gawer, Annabelle (2018): Towards a Theory of Ecosystems. In: Strategic Management Journal Volume 39, Issue 8.


[5] Parker, Geoffrey; van Alstyne, Marshall W.; Choudary, Sangeet Paul (2016): Platform Revolution: How Networked Markets are Transforming the Economy--and How to Make Them Work for You. Norton & Company.


[6] Accenture (2017): Building a Digital Ecosystem. Collaborate for Growth.


[7] Duwe Julia (2018): Beidhändige Führung. Wie Sie als Führungskraft in großen Organisationen Innovationssprünge ermöglichen. Wiesbaden: Springer Gabler.