The Collapse of Traditional Structures: An Ecosystem Evolution


In my previous post on the Transformation of Interaction, I mentioned the emergence of ecosystems and their likely impact on how we experience life. Together, the evolution of interaction and ecosystems plays a significant role in how we view experiences going forward. I referred to this in 2013 as the movement towards Next Generation Experiences. In the coming months, I will share a point of view that captures a finite set of future ecosystems. To position that discussion, it is helpful to look at how this evolution may ensue.

ecosystem-maturity-model

The road to future ecosystems is paved by stakeholder action in the coming decades. These ecosystems support life experiences and have no regard for industry boundaries. Over time, established peer-to-peer relationships lead to value creation and capture for all ecosystem participants. Along the way, value design gets complicated, as multi-stakeholder ecosystems introduce complexity. It is value design that I believe challenges traditional thinking, both in how we view relationships and how we create and share value. As traditional thinking gives way, the resulting ecosystems have the potential to move towards the collaborative commons described by Jeremy Rifkin. We are therefore likely to see increased value design activity supported by emerging ecosystem models in the short term, with the competitive battleground shifting to ecosystem versus ecosystem. Market activity is always a clear sign of momentum, and the recent progress of autonomous vehicles in a nascent Mobility Ecosystem would indicate traction.

As this phenomenon accelerates, companies must identify the relevant ecosystem(s) that enable their viability and growth strategies. These ecosystems are complex and relationship-oriented, representing future growth opportunities that are increasingly outside a company’s traditional business. A company’s relationship portfolio expands as differentiation strategies focus on core strengths and the creation of new value propositions that involve multiple stakeholders. The threat of rapid commoditization drives a company towards excellence in both seamlessly swapping stakeholders in and out based on need and performance, and sustaining innovation both inside the organization and within a broader ecosystem. In the future, platforms will deliver an ease of engagement never before seen in traditional business-to-business (B2B) collaboration, providing a way to manage this growing ecosystem complexity.

An ecosystem maturity model we’ve developed (above) captures this progression through five stages of ecosystem maturity. A PDF Version of the visual is available here.

Level 1: Partner Cooperation

This is the current world of supply chains, value chains, and traditional partnerships. The focus at this early stage of maturity is industry-specific and firm-centric. There is a growing realization that collaboration excellence is the key to future growth, but cultural challenges are an obstacle. The characteristics at this stage are:

  • Partnership focus
  • Vertical industry focus
  • Traditional value and supply chains
  • Profit oriented
  • Scarcity based
  • Platform-aware

Level 2: Task Collaboration

A small step towards ecosystems and platform business models emerge, with a focus on accomplishing a specific task. An example would be an App or Chabot that coordinates the task of ordering a pizza. The ecosystem to accomplish the task must be coordinated, introducing some level of ecosystem thinking and interoperability. The characteristics at this stage are:

  • Task-oriented connection and collaboration
  • Narrow focus/usage of ecosystem model
  • Opportunistic, initiative focused
  • Loose alliance
  • Industry blurring
  • Interoperability challenges
  • Platform-oriented

Level 3: Business Model Collaboration

At this stage, the platform and ecosystem focus broadens beyond simple tasks and begins to scale with greater interoperability and a reduction in marginal costs. With this progression, the resulting platform is positioned to attack other sectors. Examples include Uber and AirBnB. Early signs of market fragmentation appear, as redundant platforms that enable life experiences emerge in every segment of the economy. The characteristics at this stage are:

  • Co-evolving network: aggregators and modular producers
  • Firm-centric, for-profit orientation
  • Broad focus/usage of ecosystem model
  • Co-created value propositions
  • Spirit of “co-opetition”
  • Industry erosion and market fragmentation
  • Horizontal value creation
  • Ability to rapidly scale
  • Duality
  • Reduction in marginal costs
  • Platform-enabled

Level 4: Ecosystem Model Integration

At this stage, platform owners have moved towards enabling value creation versus creating the end value themselves. The firm-centric business model orientation of the past gives way to an ecosystem and value design orientation. Value creation, delivery, and capture are shared activities among economic agents, with established peer-to-peer relationships allowing value to accrue to all ecosystem participants. The characteristics at this stage are:

  • Ecosystem Thinking and Behavior
  • Industry Sunsetting
  • Orchestration of economic agents
  • Early stage market consolidation
  • Shift to value design: co-created value pillars of creation, delivery, and capture
  • Open innovation
  • Accelerated learning
  • Next generation capabilities and structural changes
  • Approaching near zero marginal costs
  • Platform centric

Level 5: Value Integration

At the highest level of maturity, we have moved from our current industry constructs to a finite set of ecosystems (more on this to come). The resulting ecosystems ride on top of a new General Purpose Technology Platform (GPTP) that enables decentralized and autonomous organizations with a strong purpose-orientation. At this stage, our current economic model is challenged, exhibiting the following characteristics:

  • Decentralized, autonomous, cooperative networks
  • Final stage market consolidation
  • Finite set of ecosystems, industry demise
  • Complex value webs
  • Purpose oriented: societal benefits and life experiences
  • Abundance based
  • Economic paradigm shifts
  • Continual innovation
  • Hyper-productivity
  • Near zero marginal costs realized
  • Platform ubiquitous – general purpose technology platform (GPTP)

I firmly believe the ecosystem model and the growth opportunities it affords will dominate the next several decades. Given the significance of the model, I will provide a point of view on emerging ecosystems in the coming months. In the meantime, some additional thoughts on ecosystems can be found in these previous posts.

Ecosystem Models and Value Design

Ecosystem Thinking

Ecosystems and Transformation

The Social Ecosystem

 

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