Ecosystems are not new to business. During the Middle Ages there were large fairs where merchants and trades would come together in coordinated commerce. This also occurred in Prato, Italy in the 14th century with the textile industry where an “ecosystem” of various trades from the textile industry would collaborate — all orchestrated by powerful wool merchants where “trading hubs” were established and were enabled through production coordination, QA/QC, and even financing. Other earlier examples would be the 100 year old Li & Fung trading company from Hong Kong or the VISA card platform. All were successful ecosystems, but without a “digital backbone.”

Today with our VUCA world and combined with digitized 4th IR, there has been a clear and compelling shift from an organization-centric to “ecosystem-centric”— a web of interdependent enterprises and relationships which create business value. This is clearly a significant change from traditional markets and a movement toward interacting and interdependent relationships, and a complex and interconnected digitized system.

It is the synergy of ecosystems which is so compelling, and only possible because of significantly increased connectivity and the tremendous advancements in cyber physical systems: AI, IoT, genome sequencing, autonomous vehicles, block chain, 3D printing — all continue to unlock new business models, products, and new customers and relationships.

With the ecosystem age businesses are seeing a “new reality” —particularly for incumbent enterprises. Only 3% of incumbents have adopted an offensive platform strategy. Historically businesses have tackled issues on their own, but in this newer, digitized world the best alternative/approach has given way to companies shaping a new competitive landscape — building their own collaborative network, joining existing ones and leveraging these ecosystems to maximize value and achieve competitive advantage.

Drucker Forum 2019

This article is one in the “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems” taking place on November 21 & 22, 2019 in Vienna, Austria.
#GPDF19 #ecosystems

This new Digitized Era (4IR) has prompted many organizations to re-tool their teams and to make collaboration and partnering central to their skill set development and competitive advantage. There is more complexity to this newer business model: geographic diversity of participants, cross-industry focus, shorter and more focused deal structures, and mutually and continuous value creation. And with “digital-age partnerships” collaboration happens across geographic, language and cultural barriers. Analysis shows that 90% of ecosystems involve participants from more than five countries and 77% of ecosystems involve developed and emerging market participants. It is not surprising that today’s competitors may become tomorrow’s partners — “frenemies.”

As for customers, 81% of consumers are demanding improved response time, 76% expect organizations to understand individual needs, and 68% anticipate that the ecosystem will provide for “harmonized consumer experiences.” And when executives are surveyed, 64% believe the new business models will profoundly impact their businesses.

It is expected that ecosystems will account for more than $60 trillion in revenue by 2025 or more than 30% of the global corporate revenue. Many companies have clearly experienced the value and competitive advantage having already reengineered their business models to insert a digital backbone.

About the Author:

Mark Béliczky is a consultant to The Carlyle Group and is Chartered Manager and a Fellow at the Strategic Management Forum, and a member of the American Academy of Management and the Peter Drucker Society Europe. He holds a faculty position at Georgetown University, and lectures at other universities in the US and Europe

This article is one in the Drucker Forum “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems”, taking place on November 21-22, 2019 in Vienna, Austria #GPDF19 #ecosystems

The challenge for business leaders in today’s slower/slowing growth period is to find ways to reverse the trend and to shift and propel their organization into growth mode. The growth engine can be stimulated and energized, not with real capital, but with a greater LEADERSHIP focus on human capital. This can be achieved by: (1) looking internally, assessing and formally embracing an “engaging” and a more inclusive workforce as well as social/community engagement — embracing and practicing “doing good while doing well,” and (2) recognizing and responding to the VUCA World.

Inclusiveness and Diversity: Improving Corporate Performance, Drive Growth, and Enhance Employee Engagement

For years compelling research has verified and validated what has been known for some time — that diversity and inclusiveness achieves more positive and sustainable results: “effective decision making, innovation, and economic growth by promoting deeper information processing and complex thinking“. Further, as more and more leaders understand and embrace the “contributing-belonging” cycle (“the more people feel they belong, the more they will contribute”), the easier their path will be to real and sustainable growth and well-being.

A significant milestone to formally address inclusion and diversity occurred earlier in 2017 when 150 CEOs  from leading global companies across the US signed a commitment and pledged to “take action to cultivate a workplace where diverse perspectives and experiences are welcomed and respected, where employees feel encouraged to discuss diversity and inclusion…” This movement, and now an organization known as CEO Action for Diversity & Inclusion, will be sponsoring a summit this fall where they will assess: “initial progress, understand fundamental gaps, and determine the next phase of this work.” It is likely that CEOs and from other areas of the world will see this as a call to action.

Leading in Today’s VUCA World — On Becoming a SuperAccelerator Company

A major challenge for business leaders today is effectively navigating in the VUCA World and the need to alter one’s management worldview/practice and to change from the historic “probable outcomes” approach to “what is possible”.

Learning to migrate from “The Probable” to “The Possible” will require formal commitment and action to leadership re-tooling. Some astute business leaders have already figured this out and have recognized that in order to effectively navigate in this new environment they will have to address this head-on with their senior leadership teams and to then integrate and SHIFT their company culture. Leaders today are still likely in those early stages of “VUCA Survive” and with the right focus and engagement they can migrate to “VUCA Thrive”.

There is a path and an approach and some very interesting work done over the past two years at Heidrick & Struggles as they have identified methods and factors that drive to accelerated growth in the VUCA world. Based on extensive research, Heidrick & Struggles identified four key, unique attributes/tests of company performance that are key to driving accelerated and sustainable growth: Mobilize, Execute, and Transform with Agility.

First tests started in 2016 which identified those “superaccelerator” companies by applying their model to the top 500 companies in the world. Twenty-three companies were identified in 2016 and twenty-five have been identified in 2017.  It is important to note that “the companies come from a range of industries—healthcare/life sciences, consumer, financial services, real estate, professional services, and communications, as well as technology.” Clearly, the answer is not always high-flying tech companies which many believe are the only ones to have a monopoly on innovation and agility. Granted, Heidrick’s model and test is limited, but serves as a great starting point for business leaders as they plan and execute their VUCA growth plans. There are likely some key lessons learned from these companies as they reach “VUCA Thrive”. No doubt that there are other “VUCA Conquering” success models, with the key leadership action to acknowledge and take action with a sense of urgency. And by the way, there are no indications that the VUCA World is moving off its present course.

There has also been some great work done by Dr. Hitendra Wadhwa at Columbia University on high-impact decision-making in the VUCA World where he identified six critical practices  to help leaders arrive at “VUCA Thrive”:  (1) be reflective and iterative, (2) nurture conflict and make it constructive, (3) integrate, collaborate and be a team player, (4) encourage diversity and collaboration, (5) intelligence distributed across the team/organization, and (6) maximize results and learning. Ample evidence exists today that the VUCA World can be tamed (real and sustainable growth) through emboldened and enlightened leadership.

Early adopters have already demonstrated that inclusive prosperity and real and sustainable growth can both occur in a VUCA world. The key is continued dialogue, sharing and learning to leverage real human capital.

About the author:

Mark Beliczky is a Consultant & Adviser to The Carlyle Group in Washington, DC, New York City. The Carlyle Group is a leading global private equity firm with $170BN in assets under management.

Mark has a faculty appointment at Georgetown University, and past management lecturer at Vienna University, The Ohio State University, and former Board Co-Chair for Heidelberg Universityʼs School of Business.