Managing Ecosystems – a delicate balance between controlling and unleashing power
September 9, 2024
Thomas Westerholm
Explore the complexities of business ecosystem management, focusing on how to balance control with innovation. Learn practical strategies to overcome common challenges.
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The concept of an ecosystem in the business world has been around for 20-30 years, introduced to describe the complex networks in which companies and related actors work together toward a shared purpose or goal. Over time, this concept has gained momentum, driven by the rapid advancements in digital technology and the rise of globalization. Today, the term ecosystem is widely accepted and used across various industries, but despite its popularity, there’s still uncertainty about how these intricate systems operate and how they should be managed. In my experience, not everyone fully grasps the complexities or appreciates the nuances of managing such ecosystems. Let’s take a deeper dive into this fascinating topic.

 

When we talk about ecosystems in the business world, we often refer to either business ecosystems or innovation ecosystems, depending on the nature and goal of the collaboration. While other terms may exist, the core idea remains the same: to create a flexible, symbiotic environment where participants can collaborate and contribute to each other’s growth and innovation. This interconnectedness allows companies and institutions to leverage each other’s strengths, combining efforts to achieve something far greater than they could alone.

 

To make this collaboration effective, there needs to be some level of structure and governance. The complexity of managing an ecosystem often requires careful coordination, which is why we frequently use the term orchestration to describe the process of bringing together multiple actors and tasks into a unified workflow. Orchestration is about aligning everyone’s efforts to drive innovation, while ensuring that every participant benefits from the value created by the ecosystem.

 

However, orchestrating such ecosystems is no easy task. These networks can involve hundreds—or even thousands—of different companies, public institutions, and other players, all varying in size, strategy, and readiness. Some participants may be startups eager to experiment and innovate, while others may be large corporations with established processes and long-term goals. The diversity of participants, combined with their different objectives, makes managing the ecosystem an inherently complex and challenging task.

 

Having personally worked within and alongside ecosystems for the past 15-20 years, I’ve gained valuable insights into the unique challenges that arise in managing these systems. One question that often comes up is: – How can you manage an ecosystem in a way that allows for innovation and creativity while still applying enough control to keep everything aligned and functioning? This balancing act is particularly difficult because many management practices used today are borrowed from traditional corporate structures, which aren’t always suited for the dynamic and fluid nature of ecosystems.

 

In my experience, when ecosystems struggle, it’s often due to management practices that aren’t fully adapted to the nature of the ecosystem environment. Here are some common issues I’ve observed:

 

  1. Lack of trust and openness between actors: In ecosystems, collaboration is key, but without trust, participants are less willing to share information or cooperate effectively.

   

  1. Unclear goals and uncertain outcomes: When the overall objectives of the ecosystem are not clearly defined, it can lead to confusion and misalignment among participants.

 

  1. Lack of clarity and understanding of benefits and purpose: Without a clear understanding of what the ecosystem offers and how it benefits each participant, some players may hesitate to fully engage.

 

  1. Fear of risks associated with sharing knowledge and resources: Participants may be afraid to share valuable intellectual property or resources, fearing that they will lose their competitive edge or face risks from misuse.

 

  1. Legal barriers to smooth collaboration: Complex legal agreements and differing regulatory requirements across regions can slow down or even prevent collaboration within an ecosystem.

 

  1. Intellectual Property Rights (IPR) and ownership claims: Disputes over intellectual property or ownership can cause friction between participants, especially when co-innovation is involved.

 

  1. Unclear roles and responsibilities in cross-company collaboration: Without a clear understanding of who is responsible for what, collaboration can become inefficient, leading to delays or conflicts.

 

  1. Unstructured innovation and development processes: In many ecosystems, innovation is a primary goal, but without structured processes, ideas may not be fully developed, or resources may not be allocated efficiently.

 

  1. Technical integration barriers and non-standardized procedures: Differences in technology platforms and lack of standardization can make it difficult for participants to collaborate seamlessly.

 

These are not just minor obstacles—they are often symptoms of inadequate management. On one hand, we face the classic challenge of finding a balance between control and creative freedom. On the other, we have to contend with the ecosystem’s complexity, the interdependencies between participants, and the constantly shifting environment in which the ecosystem operates.

 

Despite these challenges, I don’t believe the task of managing an ecosystem is impossible. In fact, I’ve observed several instances where ecosystems are managed successfully, even if there’s no single “perfect” approach. However, finding the right balance takes time, experimentation, and a willingness to adapt. 

 

Over the next few months, I plan to dive deeper into the topic of ecosystem management. I will explore it from different angles, including governance structures, innovation processes, and the role of technology. I hope to provide insights and share practical examples of what works, what doesn’t, and how businesses can overcome some of the common challenges I’ve outlined. I invite you to join me on this journey, and I look forward to exploring this important topic with you. See you in a couple of weeks!

 

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