Thriving in the Business Ecosystem

Thriving In The Business Ecosystem

Linkilaw Business News

In the natural world, an ecosystem consists of a combination of living and non-living elements of a certain environment. Ecosystems typically breakdown the boundaries of composition and include plants, rocks, soils, animals, atmospheres, water masses coming together to allow the ecosystem to thrive.

This idea of ‘coming together’ has been a key idea in the business world recently – we call it collaboration. As we will see, collaboration is one of the key underlying themes of the Business Ecosystem.

Defining a Business Ecosystem

The Business Ecosystem can be defined as follows:

“An economic community supported by a foundation of interacting organizations and individuals – the organisms of the business world”

Just as plants, animals, water and atmosphere are organisms in the Natural Ecosystem, customers,  for whom the economic community produces valuable goods and services, are also organisms in a Business Ecosystem.

What is the value of a Business Ecosystem?

Many companies are creating or joining these business ecosystems in order to maintain their positions but also to maximise their growth potential.

The value lies in how you can leverage technology in different ways, achieve excellence in research, and compete against other larger companies that sit outside your ecosystem.

How can you achieve that value?

Valuable and effective operating in a business ecosystem will include a set of ecosystem goals or expectations.

Some key ones to think about:

  • Facilitate collaboration

The idea here is that businesses need to be open to collaboration with other companies through partnerships. Collaboration that harnesses the strengths of companies will provide companies with economic advantage. Put simply, suppose a company that specializes  in research collaborates with another that is focussed on export and distribution, collaboration can provide both with economic advantage.

Also, internally, by building in a collaborative and adaptable culture from within will help to embrace ecosystems. By using productivity and communication tools such as Slack and video conferencing platforms, companies can promote this collaborative culture.

  • Harness innovation

Business ecosystems thrive when there is a healthy environment for innovation. The open source community, which champions software innovation through networks of education, collaboration and shared infrastructure is a great way ecosystems can harness innovation.

Being a part of a business ecosystem means you have access to resources like this, as well as other innovators and problem solvers.

  • Effectively use technology and develop knowledge networks

In business ecosystems, looking at how you can leverage your tech or your digital infrastructure to engage with a powerful platform helps to scale participation and collaboration. Perhaps the most significant and wide reaching example of a platform that does this is the App Store.

These platforms provide a powerful technical and organisational drive to a community.

Communities that are built around these platforms make resources and information more accessible to each of the participants: platforms become “powerful catalysts for rich business ecosystems.”

Adaptive Management 

The collaborative nature of ecosystems is unnatural to the rigid and competitive mentality of many large companies, especially at management level.

But in adapting to this shifting landscape and acquiring new set of managerial skills, particularly the skills of relationship and partnership building, c-levels can engage in what McKinsey call “coopetition”: when competitors collaborate.

Take the Tolino e-reader for example. Simply, this was created from an alliance of german bookstore competitors. As a result, the ecosystem based “coopetition” gave Tolino a 40% market share of e-readers alongside Amazon’s Kindle.

The ultimate value of being part of a thriving coopetive, collaborative and cooperative ecosystem, is potentially huge and this snippet from McKinsey articulates it perfectly: “Who will profit from tomorrow’s self-driving cars real-time multichannel financial transactions, equipment for smart homes and workplaces, and health and fitness platforms? The answer is groups of businesses working together in ecosystems”

However, before jumping into a collaboration, we recommend you to have a strong legal foundation and get legal advice for ensuring a successful long-term relationship. Book a call with our legal team and we’ll help you with any legal queries you have.