The innovating power of ecosystems and platforms

Ecosystem 1Our whole understanding of innovation is changing; there are numerous shifts occurring.

We are moving towards a new management of innovation where ‘greater’ collaboration is fueling new business models built on platforms, formed around ecosystems of communities with vested interest, contributing and extracting value.

Today and in the future, the value is created outside the individual company and not within. It is a far more working as a constellation, drawing from an evolving network effect seeking out combined solutions from this design.

In this third post of an extended series on my thoughts on “moving towards a new way of managing innovation” that explores the potential for changing the management of innovation, this  looks at the significant value of platforms and ecosystems.

We need to find a new way of doing things differently around innovation and its management.

This is based on a relationship-based, networked designed concept built for collective activities. Relationships where shared value leads to a value creation that no one single organization can provide. This requires open collaboration and an environment seeking mutual promise from individual input, contribution and extraction, delivering an integrated set of services and solutions being constructed on the platform from a sharing of knowledge, for delivering into evolving value propositions, all benefiting from, both collectively and individually

I am proposing in this series a view that innovation management needs to radically adjust and will be based on the thinking around the shift from products to solutions, from transactions to growing far more value-adding ongoing relationships, from a supplier of product services into highly valued network partnerships, exploring innovation across all options, instead of delivering on discrete elements; this requires managing the whole ecosystem of the innovation design differently through technology where platforms dominate.

Moving towards an even greater openness

We are evaluating and changing our existing focus from being closed up and having an exclusive internal orientation to innovation solutions, into ones that are having a far more open stance, more collaborative, open to external ideas and thinking. We are searching for more collaborative innovation combining external partners into more ‘collective thinking’.

These dialogues within the ecosystem, influence and shape each other, they alter the terrain, they compete and collaborate, they share and create resources, they co-evolve and adapt to new understanding, becoming increasing dynamic and interconnected, due to the recognition of mutually building value is greater than individual solutions.

The greater the collaboration improves chances of creating even greater value, finding solutions that are unique, radical in design that customers rate and seek out to resolve their needs. The value of being involved in a dynamic platform offers the provision of constantly building and increasing the value of the services and content found on that platform, it continues to evolve and improve. It proliferates, is dynamic and constantly evolving where everyone contributes, everyone benefits in a shared ‘commons’ but within a unique entity offering sustaining competitive advantage, solving complex problems but providing individual needs and returns.

Shifting towards many to many (m2m)

This shift to collaborating on a many to many platform is offering us extra acceleration that is needed to improve our innovation performances in radical designs that can significantly change existing market spaces from concept to market delivery. The phase of “open innovation” connecting one party with another (one to one) is well-established. We are presently entering the phase of ‘many to many’ and the use of platforms to manage this is still in ’emerging practice’.

Collaborative innovation is also leading us to higher chances of achieving greater impact and success, as nearly all novel ideas lay outside the organization’s domain of understanding. As we increasingly include the customer and their needs within our understanding, these multiple collaborations and dialogues are building this better internal understanding.

There also seems that many organizations are presently searching for their new business models’ of innovation delivery or architecture. I’d say we are presently in a state of flux on adjusting to all of what this might mean, in customer and market offerings, as well as internally adapting our structures to the new forms required in these business model changes.

Loops are replacing the linear

Equally, we are constantly moving from managing in linear innovation processes and making these more adaptive, constantly looping back when new information or data is being discovered, increasing this knowledge and insight in highly dynamic, constantly evolving and informing ways.

We need to adjust and learn the value of platforms, about the power of ecosystems and be significantly open about partnerships and shared intellectual property to tackle far more complex innovation challenges.

If we set about to properly designed business platforms these create and capture new economic value and scale the potential for learning across entire ecosystems of resources and participants that can give new meaning to innovation solutions that tap into our needs and can be scaled and adapted constantly.

Adjusting to many different forms of external relationships

We are forming external relationships in many different ways as this increased diversity does matter to each organization for building different competitive positions in their innovation offerings.

We are creating the potential to deliver innovative products and services through new business models that would not have been enabled by only having the one organization attempting it. Collaborations are significantly adding value into the innovation equation.

Also we are seeing complexity rising considerably. The search for finding greater value is shifting even further, increasingly forming around innovation ecosystems, loose federations of vested interest, forming and dispersing when the job is complete.

So is ecosystem thinking part of your innovation make up? Let me offer some thoughts.

So why are business ecosystems emerging as a real competitive force?

As we begin to open up our thinking the concept of ecosystems will increasingly having a powerful effect on our future growth perspectives, as different partners will all contribute to this often ‘emergent’ thinking to increase the total sum of the value.

Our innovation exploration will become far more evolutionary and requires a completely different way to think and manage these ‘relationship contract’s’ that are forming around a given concept of platform engagements. As we tap into all the expertise up and down the value chain we will become far more aware and will need to explore all the depth in thinking, contributing and making available through extending our connections in deeper and broader ways. Knowing how to adjust, accommodate and shift our thinking requires us to become more agile, finding new ways of connecting and working.

A single industry focus is in decline

Opportunities exist everywhere. We need to look well beyond our own industry to evaluate different perspectives, seek out the potential of different concepts that can be adapted to our own industry. Many companies are exploring the value of becoming involved in a business ecosystem that crosses a variety of industries to build new communities that have the capacity to transform existing environments.

A new battle ground of organizing ecosystems and providing platforms

As an example, let’s take the “battle of mobile devices” has now become a war of building the better ecosystem. It is not one single product it is chasing increasing share of minds, preferences, changing habits and tastes and to achieve this ‘paradigm’ shift the search is on for forming the ecosystem that can deliver this ‘transformation’. This is coming through apps, technology, different value propositions built into a platform of offerings that combine through your mobile device.

Another example is the Autodesk facilities at Pier 9, in San Francisco that includes a cutting edge digital fabrication lab, a woodworking shop, a metalworking shop, a 3D printing lab, laser cutting and printing capabilities, an electronics workshop, a commercial test kitchen, and an industrial sewing center as well as smaller specialty project areas, all highly linked into technology and services.

This is allowing for start-ups, small and medium-sized organizations are given even more chances to bring their concepts to life and finding the opportunity to compete with larger organizations through this approach. The combination is helping you to create real functional end-use parts with additive manufacturing, production processes and software applications all in a one shop environment.

In the car industry, consolidation is forcing a collaborative rethink. Sharing core platforms is driving commonality and global flexibility. There is this industry push for more universal regimes to drive down costs, guarantee quality and standardize the production and supply chains. This approach is cutting across suppliers, extending collaboration between traditional rivals on this need to contain costs and variance and extend global reach. It has enabled a significant shift on redefining competitive positions closer to customer needs by focusing on distinctive propositions, less on car assembly (since industry reliability has universally risen by applying industry ‘best’ practice for much within the manufacturing and production of cars).

Also one outstanding example is Saleforce.com as a platform manager, today positioned as the customer success platform, where they offer a trusted enterprise cloud app platform for building and managing all your customer relationships. Today Salesforce is powering innovation in sales, service, marketing, community, analytics, apps, and more.

Stepping out is stepping up

Today there is growing realization that thinking ecosystems can allow us to have a new framing of possibilities and offer us different mind-sets that tap into different and diverse relationships, partnerships, alliances and collaborations. This was unthinkable until recently, without the enablers to make these connections through technology and more open platforms where you can come together and collaborate.

Also the positioning of platform thinking is another. To quote, I believe from Marshall Van Alstyne, a professor at Boston University “products have features; platforms have communities“. Today we are realizing that the growth and value lies within communities, we see Uber owning no cars, Airbnb bring ‘idle’ real estate into places to stay, and Facebook creates no significant content itself, it just provides the space (platform) for others to build and extend their communities as part of their social strategy or simply a place to go and keep in touch and aware. In all three of those examples, platform users represent the origin point of the product or service.

What the companies we are valuing the most? Take a look all are based largely on technology with platforms where the ecosystem thrives through the exchange, interactions and collaborations they provide. Google, Apple, Amazon, Alibaba along with GE, Intel, Cisco, Microsoft, IBM, Samsung, Oracle.

We are equally searching for ways to democratize our business model’s today, one way is through crowdsourcing that can represent the future true value of the platform investment by others joining, creating and providing additional new value.

As we embrace “all things digital” and connect between ever-increasing communities, we will tap into and rely far more on a wide partnership of contributions. We are significantly recognizing the limitations of our past products and services, this way of innovating is on the way out, and platforms are the ‘in’.

In summary

The increasing value of participating in ecosystems allows for large and small organizations to create, scale and serve markets in ways unthought of previously. The ability to interact and co-create in increasingly sophisticated and novel ways on platforms opens up new opportunities.

These ecosystems form a bond of shared interest, of recognition and purpose which quickly becomes established as the new ‘commons’ in sharing and contributing and the platform management organizes and shapes the value for all involved to ‘extract’ their share of the innovation solution.

The future of successful innovation management is managing in the cloud, on platforms and through ecosystems. These are radically altering the way we need to manage our innovation designs.

*******

Publishing note:  Part of this blog post was originally written on behalf of Hype and with their permission I have republished this as part of an extended view on my own site to bring this into this series.

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4 thoughts on “The innovating power of ecosystems and platforms

  1. Great post, Paul. This thinking opens up our view on innovation moving beyond R&D and inventions. Here some builds on it:

    FROM: Product TO: Platform RESULT: Increase reach

    FROM: Features TO: Communities RESULT: Bring in diversity + emotions

    FROM: Tools/Options for Solutions (Hardware) TO: Complete Solutions (Insights + Services + Products + Customization) RESULT: Increase performance and create value (money and for society)

    Let’s keep pushing the envolope on this! Joachim

    Like

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