From Chief Executive to Chief Ecosystem Officer: The new leaders of innovation
The rapid transition to a digital, connected many-to-many world has led to the growing use of the ecosystem metaphor in business and society. Drawing on ecology and its study of the interaction of species with each other and their environment, human ecosystems - health, business, transport, cities, education etc. - consist of actors (people and organisations) engaged in activities of collaboration, competition and ongoing adaptation to achieve an individual or collective purpose.
The ecosystems metaphor is helpful in five ways:
1) It defines a new way to organise innovation - Organisations adopting an ecosystems outlook are transforming their innovation practices from a closed, controlled, carefully managed function to an open, distributed, learning process that engages with and values the contributions of a wider set of actors outside the organisation.
2) It reshapes our view of business, market and public policy strategy and related practice - Through collaboration, co-creation and knowledge exchange across a broad ecosystem of actors connected by a particular context or collective purpose, ecosystem-thinking organisations are also evolving strategy practice, shifting it too from a closed, planned, analytical activity to an adaptable, open, action-oriented approach for the ongoing discovery of opportunities, the continuous pursuit of growth or the resolution of complex problems.
3) It delivers opportunities for transforming, capturing and delivering new forms of value - The ecosystems lens also helps to redefine the nature of value itself. Rather than viewing value as being embedded in a function or technology, an ecosystem view recognizes that value is only ever derived from an ecosystem actor’s experience and engagement with a product or technology in relation to other actors, their environment or their changing contexts. Ecosystems link to the service-based logic – that is, all value is co-created between actors through repeated acts of resource sharing and integration. When value is co-created, actors are able to derive more personalised value and realise improved opportunities to meet their outcomes. Recognising this, service ecosystems are being created and existing ones transformed by leading ecosystems players. These take the form of platforms for the distribution and ongoing capture of this new co-created value as well as for continuous innovation. Ecosystems themselves can be created, disrupted, eliminated, converged as well as continuously improved. New connections can be forged across (previously regarded as) separate human ecosystems too (e.g. healthcare and transport - as in Uber's new patient transportation service), presenting novel opportunities to create breakthrough value.
I identify four types of ecosystem value, as shown in the diagram below.
4) It provides a methodological lens for unravelling the causes and properties of complex ecosystem problems - and addressing them. Complex ecosystem problems - such as those in healthcare (e.g., obesity, alcohol addiction, medicine wastage, elderly loneliness) or cities (congestion, housing shortages) (there are hundreds in all human-created ecosystems) tend to be persistent, dynamic, variable, open, nested with other problems and conflicted. Because of their dynamism, the root causes of these problems are hard to pin down and therefore difficult to address (some have called these "wicked opportunities"). An ecosystems lens helps to unravel and therefore identify the properties and factors contributing to complex problems. To date, this has been a neglected aspect of the value of the ecosystem metaphor. Understanding problems more deeply affords potential for a new synthesis with solution-oriented design thinking. (For more on the properties of complex health ecosystems and problems using healthcare as an example, see my Linked In piece here).
5) Finally, should an organisation view innovation, strategy, value and complex problems through an ecosystems lens, then the perspective demands a new leadership role. In the remainder of this piece, I shall explore this particular aspect of ecosystem value.
In practice, an ecosystem perspective means that organisations that wish to conceive, design, deliver and intervene with novel technologies and services must consider themselves to be organisms in a wider ecosystem too. And their leaders must become a new kind of CEO - a Chief Ecosystem Officer. They must adapt and shape their innovation and strategy capabilities and processes as well as organisational structure to align with a broader ecosystem view of value; they must open out and engage with other ecosystem actors; they must adopt more collaborative and advanced problem-learning capabilities, and they must assess and plan for the wider effects of their value-propositions beyond immediate users or customers. Their organisations and strategy must be more adaptive and designed for ongoing evolution.
Questions for the Chief Ecosystem Officer
With such an ecosystem perspective, the role of the Chief Ecosystem Officer is not to command direction and pursue sealed-down or shut-case, analytical strategy plans and solutions, but rather to nurture adaptation and continuously challenge status quo thinking; and to evolve the strategy from ecosystem learning. This means they must pursue answers to a different set of questions related to innovation, strategy and value design. In brief these include:
- How should we define our market? Ecosystems cut across traditional vertical silos or market definitions. Making this distinction, how does this reset the search for problems and innovation opportunities? A wider-angle view is necessary to scan for value-creation and growth opportunities, but how far to go and where to look?
- How can we connect disparate ecosystems together? What variety of actors (groups, individuals, public bodies) should be engaged?
- How do we build a deeper capability for complex problem analysis? What insight do we obtain from human sense-making and input, and what is derived from big data analysis pulled from the ecosystem itself, and how is this learning combined for action?
- How do we synthesise deeper problem analysis with activities of solution design and co-creation (rational-analysis and interpretation)? Which problems can we solve through a process of prototyping-iteration and which require greater separation from solutions, involving a deeper dive into the problem space beforehand?
- What variety or mix of varieties of value-proposition do we design? How do we evolve our strategy to capture new varieties of value (e.g. through the four types shown above) and deliver it continuously?
- How can we avoid a tendency to jump to assumptions about the problems we should look at?
- Similarly, how we can avoid jumping to assumptions about the solutions or the types of solutions we should build or source?
- How do we take a future rather than past view of opportunity and value, and not get locked in to a "don't fix it, if it ain't broke" mentality?
- How do we design a view of strategy that is representative of the ongoing value we wish to create, rather than tied to a solution? (Think Kodak and film, instead of "memories")
- How do we harness complexity instead of trying to eliminate it? (How are platforms designed to allow for actors to solve their own problems?)
- How do we organise all the above into a repeatable yet flexible framework for innovation and strategy, one that enables ongoing problem learning, opportunity discovery, value design, representative strategy and the exploration of future possibilities?
By posing the above questions, a Chief Ecosystem Officer will create new capabilities for their organisation to:
- Scan more widely for health innovation opportunity and discover adjacent ecosystem possibilities
- Unravel the factors causing complexity in ecosystems
- Identify and specify complex problems better
- Reveal hidden valuable opportunities
- Design new frames of possibility for a wider set of ecosystem value-propositions
- Conceive and evolve a more open, representative, adaptive strategy
- Develop new transformative business models that connect with the needs of ecosystem actors
- Deliver new forms of value on an ongoing basis
Who can not afford to evaluate their strategic position and define their growth potential through the lens of the ecosystem metaphor?
UMIO Health Value Design®
Health Value Design® is UMIO's innovation and strategy framework tailored for designing and transforming value in health ecosystems. It is founded on a blend of ecosystems and design thinking, and the human capabilities approach. The framework applies in other ecosystem contexts too.
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