As we witness the rise of ecosystems, organization structure becomes a critical area of focus. How do we operate in an increasingly horizontal world versus the vertical structures of the past? Should organization structure mimic the ecosystems that they will ultimately operate in? Do organizations ultimately become platforms? A recent video gives us answers provided by an early pioneer: Haier.
Ecosystems Set To Redistribute $60 Trillion In Annual Revenue By 2025
In a post back in 2013, I focused on value ecosystems and how they would blur the lines between industries, making Industry constructs irrelevant in the future. At the time, I said the phenomenon would accelerate and companies would ultimately identify the relevant ecosystem(s) that enable their growth strategies. It was clear back then that ecosystems are complex, relationship-oriented, and represent future growth opportunities that are increasingly outside a company’s traditional business.Continue reading
Organizing For Future Readiness
Back in 2013, weak signals clearly pointed to a structural change that was desperately needed. In a Post from that year, I described the type of change I envisioned in a world that looked very different than the world where these structures were born. The pandemic, as it has on so many levels, made something lying beneath the surface very visible. What it should also illuminate for leaders is that the future is uncertain, approaching rapidly, and likely to contain regular extreme events. Those factors make future readiness crucial to viability. To be future-ready, and to operate in a world dominated by uncertainty and pace, structures must change. When I say structure, I mean a broad set of things to consider:Continue reading
Shifting Platform and Ecosystem Dynamics
As platform business models increasingly gain board-level attention, the ecosystem conversation intensifies. David Kish – a TCS colleague – recently worked with the broader team (Kevin Mulcahy, Rose Rodriguez, Bill Quinn, Bill Bosak) to author an article focused on shifting platform and ecosystem dynamics. I am sharing Dave’s article via this guest post.
Since the advent of the internet, the combinatorial effect of innovation in science and digital technologies has rapidly driven the world toward a platform economy where software, apps and APIs enable every human activity and radically change how people interact and create value. Companies like Google, Microsoft, Facebook, Amazon, Apple, Alibaba and Tencent, which represent seven of the top ten valued companies by market capitalization, are leading this transformation and have created an imperative for all companies: develop platform capabilities and adapt your strategy to survive and succeed in the platform economy.
Preparing for the Future – Part One
I had the pleasure of hosting two sessions recently at the TCS Innovation Forums in London and in New York City. The sessions, which explored the need to prepare for the future, involved thought leaders, futurists, and various leaders across multiple domains. They were structured with several five-minute descriptions of forward-looking themes, and once context was set, a discussion with the broader leadership group was moderated. The sessions focused on education and awareness, rooted in a strong belief that leaders must prepare for and shape our emerging future. Leaders of the early 20th century were experiencing the fascination of a great period of invention, while at the same time the horror of crisis. That crisis, in the form of World War One, the Great Depression, and World War Two, served as a catalyst that mobilized human action. Without it, the democratization of innovation and the most prosperous period in our human history likely never happens – at least not to the extent that it did.
It is my belief that similarities exist between the era of great invention and today. Future historians may look back and deem this emerging era to be the greatest in human history. However, as described in my post on Mapping the Path of Innovation, human action must again be mobilized if we are to shape a future of human flourishing versus suffering. What are the catalysts that mobilize human Action this time? I shared the results of a Poll I Conducted to provide a point of view. This critical need was first positioned in a post that summarized What I Expect in 2019.
To open the sessions, I shared three key themes from my expectation post: Acceleration, Possibilities, and Convergence. If we truly are entering another period of great invention, what action is required by leaders to ensure a positive path forward? This post will summarize the key themes from the TCS London Session, positioning the importance of answering that question. I will follow this with a summary of the New York session.
As the world continues its march towards platform-supported ecosystems, organizational readiness becomes a critical area of focus. Four facets of an organization contribute or detract from success in an ecosystem world:
- The mental models that drive an organization
- The lens in which an organization views value creation and capture
- The orientation of an organization – which in most cases is shareholder value
- The organization’s culture
The growth engine that ecosystems represent will serve as a forcing function, pushing Organizations to Mature across these key facets. For example, I firmly believe that over time, a transition occurs from shareholder value to stakeholder value. This transition places purpose at the center, with shared value at its core (Click on the Visual to expand).
The New Growth Playbook
Colleague and fellow Futurist Simon Torrance has developed a new online course titled: The New Growth Playbook. It provides new research and course content focused on business model transformation for the digital economy. You can access this new online course for senior executives Here.
It’s based on new in-depth analysis of the business model performance of over 500 leading companies, and provides an holistic approach for moving the valuation needle, particularly for incumbent organisations.
Special offer for my network: 20% discount if you book using this link. There’s also a free sample video case study here: How Amazon creates new growth flywheels. The course is getting some great feedback already, so pass the details along to others. Some early feedback is highlighted below:
- “Brilliant analysis.” Senior Partner, Global Management Consultancy
- “I recommend this course to all leaders.” Digital Director, Global Bank
- “Simon is at the forefront of digital trends.” Group Chief Strategy Officer, Global Telco
- “Simon is one of a very small number of senior consultants who truly understands platform-based business models and how traditional enterprises can successfully incorporate them” Senior Director, European Media Company
- “Simon is a thought leader extraordinaire!” Director of Leadership, Global Training Company
- “Simon adds a lot of value” CEO, Global Packaging Company
More at: http://www.newgrowthplaybook.com
Ecosystem Models are Key to Future Strategies
Our structures and institutions are increasingly challenged by rapid innovation in science and technology. As Klaus Schwab stated in his book Shaping the Fourth Industrial Revolution, we face the task of understanding and governing 21st-century technologies with a 20th-century mindset and 19th-century institutions. One such institution is our vertically-oriented industry structure. We are in the early stages of An Ecosystem Evolution, where the boundaries between industries are completely blurred. The creation and capture of value is increasingly horizontal in nature, ultimately giving Rise to a Finite Set of Ecosystems.
As this shift occurs, our strategies are iterative in nature and guided by a constantly evolving view of emerging ecosystems. At the heart of this work lies Ecosystem Models. These models provide a range of possibilities inherent in emerging ecosystems, and identify three critical facets:
The Strategic Foundation
In my last post, I explored the evolution of business in the industrial age. This Fourth Iteration of Business establishes resilience on a foundation of automation and intelligence. Resilience may be more important than the productivity gains that are sure to be realized as we progress towards Business 4.0, providing the capacity to recover quickly as the pace of shifts accelerates. This visual represents a strategic foundation for Business 4.0.
The Fourth Iteration of Business in the Industrial Age
The evolution of business in the industrial age has mirrored the progression of three industrial revolutions; moving us from its first iteration to our current form. The emerging Fourth Industrial revolution ushers in another shift, culminating in something that likely looks much different than its predecessors. A brief look at this journey shows us the linkage:
Iteration One: The first industrial revolution introduced mechanization and had significant impacts on business and the labor force. Business in this period was transformed, as the steam engine enabled us to replace human and animal-based muscle with machines.
Iteration Two: Several forces converged during the second revolution to elevate our standard of living. The post-war period that followed was defined by a high level of consumption that drove business in the mass production era. Henry Ford famously said: “Any customer can have a car painted any color that he wants so long as it is black.”
Iteration Three: The third industrial revolution revolved around information technology, electronics, and communications, ushering in a period of computerization and automation. Businesses were once again transformed through significant gains in productivity and a shift away from Henry Ford era standard products to more customization.
At the Heart of Digital Transformation
To transform is to change in form, appearance, structure, condition, nature, or character. It is an overly used word that can be made to fit several narratives. Yet, given its definition, the dynamics of what is sure to be a volatile and complex future should compel us all to transform. I believe however, that the narrative must change. This is not a technology discussion, and it is not a digital discussion (although digital is the reason we are here). Rather, it is discussion of likely structural shifts that alter our beliefs and intuitions. These shifts will fundamentally change the way we think about organizations.
A Dialog with The Center of Digital Intelligence
I had the pleasure of doing a video interview with Kevin Benedict today, where we discussed a number of topics, including the recent book Machine, Platform, Crowd: Harnessing Our Digital Future. Kevin is from the The Center of Digital Intelligence. Our wide ranging discussion can be viewed here.
Machines, Platforms, and Crowds
Andrew McAfee and Erik Brynjolfsson – Authors of The Second Machine Age – wrote a new book which they launched in the middle of this year. Machine, Platform, Crowd: Harnessing Our Digital Future builds upon their first book, exploring three big trends that are reshaping the business world:
- The rapidly increasing and expanding capabilities of machines
- The large and influential young companies (Platforms) that bear little resemblance to the established incumbents in their industries, yet are deeply disrupting them
- The emergence of the crowd: the large amount of human knowledge, expertise, and enthusiasm distributed all over the world and now available
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.
“I am blown away by how palpable the feeling of exponential change has become. I’m also certain that 99.999% of humanity doesn’t understand or appreciate the ramifications of what is coming”
On Wednesday January 4th, I participated in a Game Changers radio program focused on predictions for 2017. The program, hosted by Bonnie D. Graham, included 15 other guests in an hour long show made up of four segments. A rebroadcast can be found here.