Ecosystems to grow your revenues and capabilities

Ecosystems to grow your revenues and capabilities is an intelligent option for many professional services firms.

Ecosystems, within a context of business development, are communities of common interest, partnerships, groups of experts which come together to provide services to their clients.  The growth strategy through ecosystem development involves business partnerships outside one’s own firm and often outside one’s traditional channels to market.

Growth is almost always one of the main goals for private companies.  Growth can be measured by top-line revenue, bottom-line profit and/or capabilities development.  The best organizations are already leveraging ecosystems to grow their revenues and capabilities.

How can ecosystems create additional growth and what can we expect in the coming decade?

Selecting the right business partners, and then engineering joint service offerings in new, original configurations can lead to immediate and sustainable revenue growth.  Ecosystem development is still in its infancy.  There is a proliferation of  unusual bedfellows on the horizon, simultaneously competing and cooperating with each other as the end client becomes more savvy and demanding, forcing even reluctant partners to provide combined services for their benefit.

For professional services firms, ecosystem development involves coordinated marketing plans, joint account reviews, newly bundled and reconfigured solutions which can only be provided by each company contributing to sales and delivery of correlated service offerings to the market.

Revenue growth by designing and implementing new ecosystems is a fairly straight forward value proposition.  To gain access to new markets and new accounts with creative collaborative solutions makes sense but remains surprisingly elusive to many professional services firms.

Here are some of the most common arguments against ecosystem development:

  • we tried to partner (many times) but it did not (does not) seem to work
  • why partner on deals and then be required to share revenues/profits
  • our cultures and business practices are just too differentall_globe_rgb
  • we are bigger, better / smaller, more specialized / unique, too successful on our own to necessitate an ecosystem of business partners (too complicated)
  • we do not have the time and money to invest in ecosystem development (too long to implement)

There are many other reasons one can put forth not to develop a partnering strategy to growth.  It is of course harder and more complex to design and build ecosystems than to maintain the traditional client-supplier partnership model.  It does require considerable acumen and effort to work tightly together with external colleagues in an ecosystem framework, but it also provides a much larger platform for revenue and capabilities growth.

There are really only three ways to grow a professional services business:

  • Build – organic growth, open new offices, hire more people, expand into new markets with your own products, services and methods
  • Buy – acquire small firms, integrate their people and (hopefully) their clients
  • Partner – go-to-market in a strategic alliance framework, develop your ecosystem

Partnering solutions are less capital intensive and involve less risk than the other two growth strategies.  Ecosystems are the most cost effective way to grow new revenues and develop new capabilities.  Why then are most companies not carrying out explicitly more ecosystem development?

The short answer is:  they are, especially the larger global firms.  But the skills required to partner are not the same ones required to sell and deliver services in-house.  And the added complexity of multiple partners selling and delivering projects together make the task of ecosystem development might seem too daunting for small to mid-tier firms to undertake.

Member firm organizations are moderately woven ecosystems, situated somewhere between a strict franchise model (shared brand, marketing materials, very tight contractual agreements…), and a loose affiliation of professional services companies (belonging to a professional trade group, for example).

Member firm frameworks are providing an approach to ecosystem development which enable small to mid-tier firms to grow their revenues and capabilities without major investments or changes to their current brand or management practices.

In the future, ecosystems will be the underlying framework for the new ways of working.  Clusters of groups will develop alliances within their own industries and across multiple verticals as well.  Even individual contributors will be their own limited liability company and every company will have its own ecosystem.

Already, in the professional services world, we are witnessing the overlap between project-based consulting and assignment-based staffing.  There are many respectable and excellent firms where the full-time employees are few and the contract labor are many, where the customer service excellence resides more in the individual service provider (and his team) than within the consulting company itself.

In addition to expanded revenue opportunities, capabilities development is a highly underestimated benefit of ecosystem development.  Most business services firms – especially the mid-tier and smaller ones – are operating within a specific geographic region(s), within a limited set of industries and are selling and delivering a limited scope of services.

Ecosystem development, if carried out in the proper way, enables world-wide coverage, full service across all industries and a platform for sustainable growth.

Ecosystems to grow capabilities (and by extension revenues) makes very good business sense.  Access to expanded geographic coverage, enlarged industry expertise and a broadening of one’s service portfolio are realistic goals without engaging major capital or sharing equity.

Service professionals who can provide ecosystem development and make it work through independent governance and world-class facilitation, will be in hot demand as we move forward with the millennial generation as the dominating demographic group in the workforce.






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