In the natural world, the three big ecosystems depend on land, water and air. We can also apply those environments to present and future business ecosystems: the solid, fluid, and airy.
The solid system
In this ecosystem, business is based on companies and value chains. Products are manufactured and distributed by collaborating entities in complex processes. Every part of the production process can be planned and calculated, and at every point along the value chain the buyer, maker or seller are all clearly defined. And for the species thriving in this ecosystem there’s one common objective: profit.
It is still the most important ecosystem globally, but it is getting weaker and its dominance is being challenged.
The fluid system
In the last two decades, a new kind of business ecosystem has emerged. It is based on platforms and people. There are swarms of players that are doing something on platforms such as eBay, Airbnb, YouTube or Uber, and this “something” can be buying, selling, making, communicating or just watching, and all of it is happening at the same time.
So, there’s a constant flow of people, products and institutions. Processes are neither planned nor predictable, they are not shaped by value chains, but by connections – it’s more like a permanent pairing up than some kind of industrial production.
As a lot of the participants in fluid ecosystems are not companies, but individuals, their main objective is not profit, but a good life. So these objectives as well become more liquid and incalculable than in the solid system: Each person has a very specific idea of what is needed to live a good life and what this means for the actions on each platform – you can’t do the math with the pursuit of happiness.
The airy system
A third business ecosystem is just about to appear, even less calculable, less visible – almost as intangible as a cloud. It will be based on algorithms and artificial intelligence. Machines are communicating and transacting with other machines, in a lot of cases even without interference from humans – yet producing goods and services for them.
They organize themselves via blockchain, and in a lot of cases they will be able to do that without belonging to a company. A lot of the ways in which transactions take place in the airy ecosystem will look and feel like magic: The system just works, the things just fall into place.
What will be the objectives of the algorithms that dominate this ecosystem? They may be programmed to deliver profit to companies or happiness to human beings. But the language algorithms understand best is neither profit nor happiness, but efficiency: the default objective for the airy ecosystem.
How to make the business ecosystems work?
In order to make use of ecosystems, organizations need to shift from using a traditional, static, company-centric perspective, and instead apply new ways working and thinking about strategy from an ecosystems’ perspective. This perspective is distinctive in multiple ways:
- Dynamic. Based on a co-evolutionary rather than a static view of relationships and capacities.
- Collaborative. Driven by crafting novel product combinations drawing on complementary offerings.
- Influence-based. Shaped by partial influence rather than full ownership or control.
- Indirect. Profits from system transactions or involves cross-subsidies, as often monetization occurs indirectly.
- Performance and potential: Shows which employees are underperformers, valued specialists, emerging potentials or top talents.
- Emergent. Generates and embraces unanticipated shifts, reversals, and unintended consequences.
- Network-oriented. Involves overlapping networks, rather than discrete, linear value chains.
- Externally focused. Focuses strongly on activities beyond individual company borders.
This shifting requires often new operational models. What are the steps that a company needs to take here? We suggest to get a comprehensive insight into the future business trends and skills as well into the organizational setup including the emerging roles and skills developments. This analysis must be able to answer following questions:
- How do new technologies and trends change the way work is done?
- Which roles and skills are needed in future operating/organizational models?
- Which roles and skills are becoming more relevant in your industry, which ones are becoming less relevant?
- Which are the ‘hot’ locations for emerging roles?
- Is talent supply in your main locations suited to fulfil future talent needs? What might be better options?
Auditing HR compliance
Concerning all the legal requirements surrounding HR, this is perhaps the least exciting area to measure. Yet, interestingly, I find this is the area where HR teams focus too much of their time and attention. Clearly, compliance is essential and needs monitoring regularly, but this must be done in conjunction with measuring those functions that are related to the organization’s strategic priorities.
Key things to measure here may include:
- Are our policies and practices up to date?
- Are employees properly trained on new policies and procedures?
- Do employees understand key policies and practices?
- Is our employee handbook up to date?
- Are we meeting our equality and diversity obligations?
Answering these questions will help you establish the optimal organization setup of the future and be prepared for the upcoming changes in industry trends.
Learn how we helped Merck to gain transparency on global labor market skills’ development trends and outline future operating models.
- Percentage of employees trained in company policies
- Salary competitiveness
- Diversity rate/employee demographics
- Gender pay gap
- Number of diversity initiatives
New business potential of ecosystems can be identified thanks to digitalization
The internationally renowned examples such as Amazon, Apple, Facebook, Google, Uber and Airbnb illustrate that the majority of successful ecosystems are based on a digital platform.
Therefore, collaboration in networks is considered an important competitive factor in the cloud world. Networking and collaboration are “without alternative”. Only together, as an intelligent swarm, can complex solutions be developed quickly, integrated for the customer and flexibly provided in volatile markets.
The right technologies and services enable increased agility and help to make knowledge and data silos disappear. This must necessarily be accompanied by the transformation of companies in dealing with knowledge internally and externally, including the integration of partners along the supply chain, as well as the evaluation of new markets and target groups on the basis of knowledge and data.