Goodbye business as usual

Ecosystems are not a fad or a sexy buzzword. They reflect a true paradigm shift in business. They are a genuinely new organisational form: fluid networks of organisations combining to deliver bundles of products and services in new and unfamiliar ways. And just like the step from single- to multi-cell organisms in nature, they represent a profound evolutionary shift.

Ecosystems have both enabled and resulted from big changes in the ways we consume and produce. Who would have imagined, even a few years ago, that you would be able to buy coffee with a phone, or ask your stereo or your fridge to order your groceries?

Ecosystems are developing at remarkable speed and the opportunities they offer are simply too large to be ignored. A McKinsey report suggests that by 2025, today’s 100-plus industries and value chains will have collapsed into a dozen or so multitrillion-dollar ecosystems accounting for some $60 trillion in revenues – one third of the global total. It also predicts that new configurations will feature “a few large orchestrators, big winners, and a huge shift of wealth and value creation”. Boston Consulting Group (BCG) found that the use of the word “ecosystem” in large companies’ annual reports had grown 13-fold over the last decade and that those who used it grew much faster than those who didn’t.

As technology and regulatory change blur the boundaries between products and services, producers and consumers, organisations and markets, it no longer makes sense to think in terms of traditional industrial sectors and categories. Business ambition, strategy, organisational behaviour and policy will all need a rethink.

Adapting to a new world order

So, while the hype about ecosystems is justified, their complexity brings some fundamental challenges. Some of these are becoming clearer: recent academic research maps out what ecosystems look like; a BCG project explores the myths and realities and fierce ecosystem competition; a World Economic Forum White Paper sets out the basic rules of the game; and a recent Harvard Business Review paper outlines the major strategic implications.

Where do people come into the picture? One of the biggest challenges for leaders in this unfamiliar new world will be to reimagine themselves and how they relate to the world around them. Humans have always thought of themselves as the centre of the universe, with other individuals and institutions ranged in near or distant orbits around them. For CEOs of large companies, that may be even more true – you don’t get to the top without ambition, self-confidence and the belief you should be in control.