Ask any business today if it's adopted an ecosystem business model, and you'll likely get a range of responses—from "what is it?" to "sounds like a marketing fad" to "yes, we have one, but we could be getting more out of it."
Business ecosystems are made up of partners, customers, influencers, academics, NGOs, associations, and other interested parties that come together to collaborate and deliver best-in-class products and services, collectively advance their industries, and gain competitive advantage.
In some instances, this approach creates seemingly unlikely partnerships, often between perceived competitors, that turn out to be beneficial to both companies, their customers, and the industry at large.
Consider the Apple/IBM partnership. Historically viewed as competitors, both companies have developed their mobile and enterprise technologies to the point where a partnership was a natural and complementary extension of their businesses. IBM has a strong foothold in the enterprise computing market, whereas Apple has a ubiquitous presence in the consumer market. Together, IBM and Apple can pursue greater opportunities while getting a leg up on their competition.
At first glance, this partnership involves Apple and IBM. Behind the scenes, however, it also touches a variety of other organizations, such as software developers, consultants, and the core industries the mobile business apps are designed to reach, including retail, healthcare, banking, travel and transportation.
But what if your business isn't a household name? Or there's hesitation in the C-suite to let "outsiders" in?
First, ecosystems are not reserved solely for global, blue chip companies; smaller organizations have a distinct advantage in building and deriving value from their ecosystems, simply because they are more nimble. Second, although the hesitation to open up your business processes is certainly a valid concern, it limits your company's ability to evolve, grow, and seize more opportunities; instead, form an ecosystem with boundaries.
Here's how marketers can power a thriving, sustainable business ecosystem.
Creating the Foundation
Start with an assessment of your marketplace:
- Evaluate the marketplace and consider your 12-18-month business strategy. If your top focus is customer acquisition, who are the partners that could leapfrog the competitive customer experience landscape?
- Expand your organizational focus from brands to collective vision. Too often, we narrowly view the world through our products; that's often the case in CPG companies, but technology businesses can also become engineering-driven and lose sight of the larger picture. Ask yourself: What is the market need? Who can help me achieve my vision? In exchange, what can my business do for them?
- Know your customers and where they're headed, and use that knowledge to shape your ecosystem approach. In most cases, focusing on the larger customer problems from a holistic perspective defines the key partners involved in your ecosystem.
Building a Sustainable Ecosystem
Next, embrace a shift from traditional ways of reaching your audiences to adopting a broader, ecosystem mindset. Although every business will create its own unique ecosystem, the following are three fundamental elements of any business ecosystem.
1. Redefine your partnership program
Originally, partnerships evolved from a time and place where businesses with mutual interests and complementary offerings joined forces on behalf of their customers. Over time, for many businesses, partnerships became an extension of their sales pipeline, morphing into sales channels that largely rely on volume.
Though we don't want to abandon or downsize healthy channel partner programs, effective ecosystem development is based on more fully engaging a subset of those partners. They're identified by a variety of factors, such as complementary offerings, target audiences and customers, and strategic direction.
2. Expand your boundaries, expand your reach
To grow your ecosystem, think beyond your inner circle of customers and partners, and reach out to nontraditional organizations.
Healthcare is a great example of how unexpected partnerships create thriving ecosystems. Specifically, consider the evolution of the house call. That standard practice was abandoned once people had more effective ways to connect with their physician—better transportation, over-the-phone advice, and advancements in medicine. That ecosystem stretched to include a variety of other industries, all in the best interest of the patient/customer.
And the healthcare industry continues to evolve. Apps for monitoring health, academic research, the use of technology to proactively spot and address potential issues before they lead to emergency treatment, government regulations, and a growing a shift toward patient-centric care are just a few examples of how expansive a healthcare company's ecosystem can be.
3. Prioritize the continuous evolution of your ecosystem
As your business and ecosystem evolves, some partnerships will strengthen and expand, while others will take different forms and others will simply fade away. Accordingly, you must ensure that your ecosystem continuously evolves; that dedicated effort is best led by the marketing function but should involve key stakeholders throughout your company.
More companies are embracing the ecosystem business model. As they do, no other function is better suited to lead and execute the effort than the CMO. With a pulse on customer needs and insight on the business and industry at large, it's up to the marketing function to provide the necessary strategic direction, articulate the company's vision, and forge authentic, mutually beneficial alliances.
Soon, the ecosystem business model will no longer be a nice-to-have—but a business imperative.
Take the first step (it's free).
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