Wednesday, February 21, 2024
CEOWORLD magazine - Latest - CEO Insights - Your Business Is Already Part of an Ecosystem. Use It.

CEO Insights

Your Business Is Already Part of an Ecosystem. Use It.

When small to midsize business owners operate under the notion that they have no ecosystem, they fail to leverage the one they have. Here’s how you can better map your ecosystem players, understand how to meet client needs, and meet these needs to uncover growth opportunities.

business ecosystem is the network of organizations — distributors, manufacturers, competitors, customers, and even governmental entities — that deliver a product to customers. Each organization within the ecosystem affects the other, which means that each component of the ecosystem must be flexible and adaptable to survive. Still, many business owners make one big mistake when it comes to an ecosystem: They assume they don’t have one.

As a business owner, you have probably built a substantial ecosystem, which you should leverage for a few reasons. First, ecosystems help small to mid-market businesses thrive in a competitive market that rapidly changes with technology. Second, participating in a business ecosystem creates a competitive advantage because it enables you to partner with other organizations to speed the innovation process and grow revenue. Additionally, by leveraging ecosystem partners, you can differentiate your offerings using the knowledge you acquire within the ecosystem. Finally, leveraging the ecosystem frees you to discover your marketplace’s “blue oceans” (where you can create and capture new demand without worrying about existing competition) and avoid “red oceans” (where the competitive landscape is crowded and you have to work hard to match or beat your rivals).

When small to midsize business owners operate under the notion that they have no ecosystem, they fail to leverage the one they have. It’s time for you to make your intrinsic ecosystem work in your favor.

Creating a Business Ecosystem: A Misnomer

Small to mid-market businesses probably shudder at the idea of “creating an ecosystem” from scratch. They think that the executive management team has to go out and build a network, which often means dedicating resources and time to a “big business” project. If you have been trying to build your own ecosystem, it’s time to take a step back, because you’ve been operating under a misconception.

Why? A business already belongs to its own ecosystem. For example, your business already engages with various suppliers, competitors, distributors, and customers naturally. Instead of thinking about building an ecosystem, build upon what this network offers to expand into the unknown.

Look inside your own ecosystem and unlock the members’ knowledge by applying the “hidden” knowledge of other ecosystem members. This is a great way to create value for your product or service offerings. You will innovate more quickly if you dedicate resources to strategically leveraging your ecosystem position while engaging with your ecosystem members to become more adaptable. This will help you offer value to the marketplace and help your business become more sustainable.

Examples of Existing Ecosystems

A great example of a business that is implicitly part of an ecosystem is a biopharmaceutical company. These companies exist to develop therapies for patients in need, and these patients are part of the company’s ecosystem. The companies’ ecosystems also include regulators, with whom they work to get approvals to bring therapies to market. Their ecosystems also include investors to support R&D, academia, healthcare providers, competitors and other vendors, all working to bring therapies to patients.

Implicit ecosystems exist in other industries, too. Some tech companies, for instance, use multiple suppliers to develop new types of glass or production robots instead of buying regular parts, or they use microchips from a network that goes beyond microchip suppliers. You can harness your ecosystem by drawing data from it to inform operating decisions or even working with other competitors.

The Benefits of Leveraging Ecosystems

The primary benefits of activating your business’ ecosystem are offering undeniable value to your customers; entering into a blue ocean versus red ocean marketplace instead of competing on prices; increased business capabilities; increased efficiencies; and more. Again, to reap these benefits, learn where you stand in your ecosystem. You can do this by mapping your ecosystem players, understanding how to meet client needs, and meeting these needs to uncover growth opportunities:

  1. Map your ecosystem to take advantage of key players.
    Each member of your ecosystem fulfills a unique need for your clients or customers. Carefully evaluate your suppliers, competitors, distributors, customers, and government agencies to determine their value: What are they adding to the ecosystem, and what can their contributions teach you?

    In my research, the biopharmaceutical firm I worked with used academia, an ecosystem member, to learn more about basic molecules and develop blockbuster drugs. Further, the firm applied its knowledge to existing information from its parent company, which ran an unrelated business line, to develop a new therapy. The firm also developed a therapy for a rare disease and partnered with a competitor to bring it to the global marketplace as part of its ethical duty to patients. In a similar way, think about how you can capture value from the various players of your own ecosystem.

  2. Better understand your clients’ needs.
    Work within your ecosystem to learn more about your target audience and determine what they need from your product or service. Look for how your product or service portfolio does not fulfill those needs. Each member of your network has either directly or indirectly touched your customers or clients, which means they can probably tell you more about them than you already know. Treat each member as a touchpoint that can provide important information. Refer back to the map of your ecosystem and ask yourself what insight they might have into customers’ needs, then reach out with more specific questions.
  3. Use your ecosystem to expand your services.
    Once you’ve learned about your customers from each ecosystem member, you can leverage that information to expand and meet your clients where they are. This might mean expanding into new product or service offerings or to other geographical marketplaces. For example, you might see an opportunity to expand in Japan but have no idea how to enter the Japanese marketplace. Who in your ecosystem might have the knowledge to help you expand your services? Your ecosystem can help you address new populations — or new customer needs — efficiently.

While it’s easy to think that you need to create a business ecosystem, you may be surprised to learn that you already have an ecosystem you can use as a toolbox for growth. Ask yourself, “What is our role in our industry’s ecosystem, and how can I use my network to deliver undeniable value to the marketplace?” Your ecosystem might hold the knowledge you need to meet your customers’ needs for the future.

Written by Dr. Bethany Valente.

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CEOWORLD magazine - Latest - CEO Insights - Your Business Is Already Part of an Ecosystem. Use It.
Dr. Bethany Valente
Dr. Bethany Valente is the founder and managing partner of Tempo7 LLC, an innovation strategy consulting firm that develops strategic initiatives and uncovers growth opportunities.

Dr. Bethany Valente is an opinion columnist for the CEOWORLD magazine. You can follow her on LinkedIn.