5 ways to stay competitive in a time of disruption
Ideas from a new book co-authored by Prof Arnoud De Meyer
No man is an island, and these days, no company can afford to play the lone wolf to remain relevant and prosper. From new technologies to shifting cultural and lifestyle norms, the world is experiencing unprecedented levels of disruption. This new economic climate requires businesses to be a part of a dynamic ecosystem where a plethora of partners with different skills, capacities, networks and innovations create a powerful multiplier effect.
That’s the argument laid out in Ecosystem Edge, a new book co-authored by esteemed academics Arnoud De Meyer and Peter J. Williamson. The former is a University Professor at SMU, and served as the University’s President until 2018, while the latter is Professor of International Management at the University of Cambridge Judge Business School and a Fellow of Jesus College, Cambridge. Here are five examples from the book that illuminate different ways companies can pursue the ecosystem strategy.
1. Build your credibility
To convince partners to join your ecosystem, credibility is key. When news and financial information company Thomson Reuters decided to create an applications studio for its terminal system, it wooed app developers by stressing that their software would be deeply integrated into the Thomson Reuters system, and provided the necessary tools to facilitate this. The company also committed to making data more open and accessible, and emphasised its track record in developing open ecosystems.
2. Attract foundation customers
Getting a critical mass of initial customers for a new ecosystem is crucial to success. When tech company Alibaba set out to develop financial services affiliate Ant Financial, it decided to create the Ant Fortune app to attract Chinese consumers who had limited options for money management and investment products. The app allowed such consumers to easily access hundreds of financial products provided by banks, asset management firms and Chinese mutual fund companies, and even provided free stock-market information for bourses in Shenzhen, Shanghai, Hong Kong and the US NASDAQ exchange.
3. Develop a roadmap
How will your partners benefit from the ecosystem you’re building? Creating an initial roadmap with signposts for partners to make strategic contributions can help make this clearer.
When Rolls-Royce set up its first aircraft engine manufacturing plant outside the UK in Singapore, there was no ready pool of suitably skilled labour in Singapore, or the region, and the company decided to catalyse a talent development ecosystem.
It laid out a roadmap for training and recruiting new employees from Singapore’s Institute of Technical Education and the polytechnics, with signposts that included the development of new curriculum materials, launching internships for students to gain practical experience at Rolls-Royce, and the establishment of an aerospace industry-related scholarship fund. Partners were able to discern how they could contribute to and benefit from this ecosystem, and Rolls-Royce was eventually able to recruit as much as two thirds of each graduating cohort from all its partner schools.
4. Collaborate with partners with their own ecosystems
Just as foundation customers are crucial, foundation partners with their own critical ecosystems can make a huge difference. For instance, Rolls-Royce’s foundation partner in Singapore was the Economic Development Board. It worked with the government agency to facilitate the company’s engagement with myriad domestic partners, such as Singapore Airlines, educational institutions and key suppliers.
5. Leave old paradigms behind
A more traditional way of doing business might involve vertical integration, or a hub-and-spoke network with a clear centre of control. An effective ecosystem, however, is often decentralised and dynamic.
For instance, Amazon Web Services (AWS) provides cloud computing services to its clients, and its ecosystem includes a global infrastructure of data centres, services provided by AWS, and software and services that are partially provided by external partners. There is also an AWS Partner Network that provides partners with business, technical, marketing, and go-to-market support. Thus, all the partners in this ecosystem know how they can connect with one another and with customers, and how to reposition themselves within the ecosystem if necessary.
