Ecosystem thinking: paving the path to sustainable innovation
In today's rapidly evolving world, a constant stream of groundbreaking technologies appears to reshape our lives. Regrettably, only a fraction of these innovations truly impacts our daily experiences. To reverse this, a shift in mindset is needed: away from linear thinking and towards a more holistic ecosystem perspective.
Business leaders frequently encounter articles highlighting advances in computing, promising innovative solutions, and more. This pursuit of innovation and market disruption within companies has often given rise to the establishment of innovation labs, employing methodologies like design sprints, co-creation sessions, or brainstorming sessions adorned with post-its. Regrettably, only a fraction of these innovations go beyond the walls of these brainstorming sessions, and those that do often have minimal impact on our daily experiences.
The limitations of linear thinking in an interconnected world
Let me clarify; many of these ideas are genuinely promising, conceived by dedicated professionals who deeply understand their respective fields. However, the challenge often lies in their translation, as they tend to manifest as a "one problem, one solution" scenario. Organizations identify a problem or opportunity and typically proceed to translate it in a straight line into a dedicated solution. This solution could take the form of a separate feature for an existing solution, a completely new mobile application in the App Store, or a fresh value proposition necessitating a new channel. Often, businesses fail to consider the broader picture and the existing ecosystem of solutions already in place, as well as the impact this new innovation will have on them.
Monolithic systems vs. Fragmented landscapes
This linear thinking typically results in two distinct directions. Either you create a monolithic system where everything is interconnected, or you end up with a fragmented landscape of standalone applications. In large enterprises, it often becomes a combination of both, with a few monolithic systems being surrounded by independent applications.
This phenomenon might remind you of something very Flemish, the so-called "Vlaamse Koterijen" or the tendency to add backhouses, sheds, porches, and other rooms to the main building, resulting in illogical floor plans with backdoor bathrooms that need to be traversed to access the garden.
Regardless of whether the outcome is monolithic or scattered, your customers often struggle to find their way in these systems. Complex information structures or a bewildering array of apps offered by the organization lead to frustration and, for some, a digital divide they'll never cross. Within an organization, it results in an unclear operational backbone where minor changes or updates in the monolithic systems can cause unforeseen issues. In the fragmented landscape, substantial effort is required to gather, transfer, or align information across the various applications. In either case, inefficiency prevails.
A new mindset: ecosystem thinking
A shift in mindset is needed, away from merely adding features and towards a more holistic ecosystem perspective. You must continually consider what impact a new idea, innovation, or feature will have on your existing ecosystem, starting from the overarching strategy down to the operational backbone of shared components, design systems, and processes. You must ask questions such as whether this new idea is aimed at an existing customer segment or a new one, whether it affects your overall proposition, and whether it should extend an existing touchpoint or exist independently. You must explore opportunities for mutualization in design, technology, and processes. This mindset should be embraced by all stakeholders within the organization, with a shared goal of enhancing your ecosystem to positively impact your customers' experiences.
That's precisely why, at Craftzing, we enhance our approach to digital strategy by incorporating two distinctive layers. An ecosystem strategy layer where we meticulously delineate the placement of a new feature, proposition, or idea within the larger ecosystem. Our mutualization strategy, in turn, explicitly establishes the core principles of how and at what level you do things transversally.
In a business context, adopting such a layered approach offers a multitude of advantages:
Enhanced clarity and focus: Our approach underscores the vital importance of clearly defining the position of new features or concepts within the broader ecosystem. This clarity helps you stay focused on your strategic goals.
Strategic alignment: By deliberately incorporating these additional layers into your digital strategy, your organization can ensure that it is perfectly aligned with its overarching goals.
Optimized resource allocation: Employing a "mutualization strategy" optimizes resource allocation by directing them where they are needed the most, hereby improving overall efficiency.
Cross-functional collaboration: This approach fosters a transversal method to decision-making, encouraging collaboration across diverse teams and departments. Such collaboration can lead to more innovative and effective solutions.
Proactive risk mitigation: It aids in the early identification of potential risks and challenges, enabling proactive measures to mitigate these issues.
In summary, adopting an ecosystem-focused perspective can benefit your organization by promoting clarity, alignment, efficiency, and a holistic approach to strategy, ultimately enhancing decision-making and cultivating a competitive advantage.
Ready to learn more?
If you find yourself on the verge of launching a small-scale project or exploring disruptive ideas, always consider this question: "What should my ecosystem strategy entail?"
If you seek a partner in this endeavour, don't hesitate to reach out. I share a more detailed coverage on the topic in our management masterclass program 'Shaping Tomorrow'. In 3 days you'll learn the necessary insights to steer your company through successful digital transformation.
By Kenneth Roelandt
I am the Head of Strategy and a co-founder of Craftzing. In this rapidly evolving world, I strongly believe that the implementation of the right strategy, powered by innovative digital solutions, is a critical factor that sets businesses apart.