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More and more of the innovation opportunities and challenges in management today, from sustainability through to leveraging the potential of AI, require a range of capabilities and knowledge that no company has in-house today. As Frank Walter Steinmeier, President of Germany put it during the Covid pandemic: “No single entity covers the medical, economic, and political elements required to produce a vaccine for all.” Likewise, no single company has all the knowledge in-house to make buildings sustainable, enable the whole spectrum of industry to economically shift to renewable energy, move from vehicles to mobility solutions, or to integrate AI effectively into the lifeblood of organisations, to name just a few of today’s opportunities for both profit growth and societal benefit.
Ecosystems of partners
The key to managing for new levels of value creation and innovation, therefore, will be for organisation to build and lead vibrant and diverse ecosystem of partners. Innovative responses will require access to the capabilities and knowledge of an ecosystem of partners, drawing on know-how and capacity in a wide variety of related industries.
I was struck that as far back as the 1960s Drucker highlighted the importance of knowledge. Today diverse know-how and capabilities need to be brought together in shared value creation. Working together the aim is to jointly discover innovative new solutions and then implement them. To do this, leaders will find that while they can no longer reply on command and control, but they can nudge, incentivise, and lead ecosystem partners to help them achieve their joint goals. It also means working more closely with customers. That doesn’t necessarily mean today’s largest customers. They must be customers with a need that existing market offerings can’t satisfy. They must be willing to invest time and resources to co-develop innovative solutions.
A new dominant logic
These shifts are part of the critical shift from a dominant logic that views success as depending on individual firms acting alone to innovation and value creation as driven by collaborative ecosystems working toward shared aspirations and collective success. Creating the conditions for the rights flows of knowledge, not through the bottleneck of a single company, but across a network of partners who interact with each other will be a key task in what Richard Straub of the Drucker Global Forum has called “The Next Knowledge Work”.
Who should be ecosystem partners
At our panel “Value Creation in Knowledge Ecosystems” during the Forum we concluded that this networked ecosystem needs to involve institutions, non-profit organisations and individual activists and entrepreneurs, not just the “usual suspects” of established suppliers, customers, and familiar alliance partners. It must also be a global network. The new knowledge economy won’t be effective unless it has global reach. Despite the growing political rhetoric about rolling back globalisation, mobilising the diversity of knowledge from around the world will be essential for step-change innovation.
About the author:
Peter Williamson is Professor of International Management at the University of Cambridge, Judge Business School and Fellow of Jesus College. He is also Chairman of the digital process automation cloud services company Bizagi Group Inc.