Ecosystems are an exciting extension of the traditional practice of strategic alliances.
At a recent global summit meeting organized by the Association of Strategic Alliance Professionals (ASAP), we shared and exchanged the most recent thinking concerning creative partnering solutions. Strategic alliances, situated on the continuum between organic growth and post-merger integration, have become increasing prevalent over the past two decades.
The emerging trend of multi-partner networks is an exciting development for the profession. The intertwining of relationship strategies in all areas of strategic alliance development has created newer and more complex forms of strategic alliances. Terms such as ecosystems, partner networks, member firm organizations, public-private partnerships, etc. have alliances professionals and consultants scrambling to stay ahead of the game. Here are some of the most compelling findings I observed during the event as it relates to strategic alliances and ecosystems:
- Value creation is increasingly difficult to achieve by oneself and not even the largest and best organizations can provide a complete turnkey solution
- Meaningful projects are larger, more complex, involving non-linear thinking, matrix organizations and collective decision-making processes
- Contractors and solution provides are blended together and the start-stop point at each step in the traditional value chain is becoming more blurry
- Partnering well together – organizationally, operationally and in simple good faith is a core competency which must be learned and developed
- Customer dictating multivendor requirements and co-opetition is forcing new cooperation strategies among traditional competitors
Strategic alliances and ecosystems are providing some of the most exciting developments in organizational design, sales and delivery systems, technical and operational configurations and score carding. The notion of return on collaboration (defined as potential value divided by management complexity) is becoming as common as the classical return on investment. New business cases are exploding on the scene integrating the complex factors of sustainability, greater good, image and corporate responsibility, etc. alongside the usual criteria of distributed profit, measurable productivity gains and equitable cost allocations.
An ecosystem, short for ecological system, is a community of organisms living together in the same environment. The connection of these living things to each other is called biodiversity. Ecosystems in nature can be very small like a puddle of water or vast like an ocean.
Clustering coefficients, in graph theory, help us to measure the degree to which nodes tend to cluster together. Global measurements give us the overall trend and local ones give us an indication of how deeply single nodes are embedded to each other. In social networks, nodes tend to create tightly knit groups characterized by a relatively high density of ties.
Social networks are the baby steps of things to come in the industrial world. Successful businesses in the decade ahead will be those that can evolve rapidly and effectively, integrating capital, partners, suppliers, customers and even competitors to create and sustain cooperative networks. Terms like ‘strategic alliances’ and ‘sustainable virtual organizations’ and ‘clustered ecosystems’ will all be commonplace in the vernacular of the next generation. Technology is the key enabler with the convergence of Information Technology (digital intelligence) and Operational Technology (machines and devices). Behaviors are lagging behind, as is often the case at inflection points like these.
Strategic alliances and ecosystems are needed as new business models are designed and implemented in complex areas such as smart cities, accountable care organizations, virtual diagnostics, continuous teaching/learning, new ways of working and self-organizing communities of interest. Crowd sourcing and debate channeling are already replacing the traditional ways to create and measure new products and services.
Managers and business leaders who are thinking along these lines are beginning to understand the underlying strategic logic of change, and anticipate the managerial challenges of nurturing these emerging ecosystems in an increasingly complex business environment. I am proud that the professionals in my field of alliance management are ahead of the curve in this global trend toward ecosystem creation.