CHAPTER 7 CORE, EXTENDED CORE, MOONSHOT

Let’s say you start to believe in building partnerships, to engage in a metasystem. You see the world challenging you, questioning you. Little by little, our proposed answer feels like it just might do. Then what? You ask your secretary to set up a meeting. But who with? You clear your schedule to go for collaboration, full throttle. But where to start? Like the old Greeks are about to tell us: you always start with yourself.

Gnothi seauton (Know thyself)

We’ve said it over and over again: sincere partnerships are built on trust. This means asking ‘Where can I buy that?’ or ‘How do we build that?’ is not going to save you this time. The solutions aren’t this easy anymore, they are found on a much deeper, intangible level. Trust is about reciprocity. It’s not something you can buy, or own, or grow all by yourself, yet that doesn’t mean there isn’t anything you can do to foster it. To be in a partnership built on trust, all parties have to be trustworthy. That means you, too.

‘Know thyself’ was the mantra of the ancient Greeks and it still resonates in our common sense today. Self-analysis, self-reflection, researching your inner dynamics, drivers and pitfalls are a precondition to engage in sincere relationships. The same goes for business relationships. Because how can you expect a CEO to make promises or predictions if he doesn’t understand the dynamics at the heart of his company?

Ice, ice baby

Knowing yourself doesn’t mean you have to be perfect. That would be suspicious, even, for only psychos believe they are perfect. However, it does demand you to be transparent. In the first place, this transparency should apply to yourself. Next, you should apply this principle of openness to every interaction you have with others. Be aware that achieving such transparency is a quest, though. Just like questioning and researching yourself, it is a never-ending story of trying. The moment you think you’ve cracked the code for good, you are probably farther off the mark than you think.

The truth of it is you don’t know most of what’s going on inside. Not in your head, nor in your company. Think of yourself as a giant iceberg. The part above the water is easily identifiable. Its peak is made up of your most obvious attributes. But the part below the water, which is far bigger, is not visible to the naked eye. Seeing it requires effort, research and reflection – reading it even more so. Because we usually don’t put in that effort, a certain percentage of ourselves, this underwater us, will remain opaque, even to ourselves. With all the effort in the world, a part will remain invisible. The same logic applies to companies and the people running them.

Knowing what goes on inside requires continuous effort. But just as with trust; it’s about the process, not the result. It’s about the intention, not the outcome. Being a trustworthy partner doesn’t mean you don’t make mistakes. It means you always strive for transparency. It means self-reflection is part of your DNA. It means your search for understanding is relentless, even though you expect no direct return.

Let’s talk layers

Everything that you do, make or offer as a business can be arranged into three concentric circles, each one moving a bit further from your core activities, aka what makes your business tick. How you interact with other businesses depends strongly on where they enter your sphere. Does competition appear in the outer circles or at the heart of what you do? On the other hand, structuring businesses in these circles helps grasp the composition of other companies you might court for a partnership.

Core

The smallest circle – a dot around which revolves each and every thing your company does – is your core. It contains all your company’s present or future activities, all of which lean on the competences you have on board. It’s where your profit is made. Or it was, up until now. It’s Apple’s iPhone, Walmart and Ahold’s supermarkets, Google’s search engine. Sure, these companies do a lot of other things too. But if you have to pin them down on one aspect, this is it. As a business, you want to be unbeatable and in total control when it comes to your core, because that’s what pays the bills.

Extended core

Circling your center is a periphery of competences, with strong ties to the core. Imagine your company to be a European city. The ones you like to visit, with an historical center around a square, small streets lined with barista places and a city wall marking where the countryside once began. Past that city wall is the extended core. It is where the schools are, where the young families live. Chauvinistic as they are, they strongly identify with the roots of their city, but a part of them wants to set out exploring the outside edges, away from tradition.

Your extended core is where the successful spin-offs of your core proposition live. If you are a textile company, your core is designing and weaving textiles to make mattresses. It always has been, and preferably always will be. However, these last few years, you’ve started offering your expertise in textile as a service to car manufacturers. They needed the textile for the car seats, you had the expertise, and you made a move outside your core. Turns out it was a success, so a small percentage of your time, resources, and attention now goes to car manufacturers.

The App Store is part of Apple’s extended core. It doesn’t function without an iPhone but is becoming so strong a product that it could almost live a life of its own. It’s rooted in the core, but stretches out to more innovative, flexible horizons.

Moonshots

It comes to you while you are driving to the sea. It’s a chilly, quiet morning, nobody in sight, the road stretched out for you alone. There’s an idea, a hint of something that has been brewing for a long time, and suddenly you can almost taste it. Delicious. Your energy levels hit the roof and you want to take action immediately. Who can you call to set the wheels in motion? Wait, stop, you want to explore whether your idea is even feasible before somebody else gets a whiff of it. You want to know if anybody has ever tried anything similar.

Your moonshot, this outer circle, is populated with wild ideas. They have few or no evident ties to your core, but they might just turn out to be jet-fueled rockets, propelling you into the future, securing your existence in the next decade. They take you on a path that’s fun, but highly insecure and dotted with question marks. It’s the circle of exploration, of futurism.

Google’s self-driving cars don’t really have any obvious link with a search engine. But one fine day, waking up, the Alphabet CEO Larry Page must have thought “Why do people have to waste their time driving cars themselves? I have all this location data, all this intelligence, and so many people using our navigation services to drive around. Maybe I’m in the sweet spot to start experimenting.” He even set up a division of Google dedicated entirely to these moonshot ideas, emphasizing the importance of experiment, creativity and adventure. Once you have mapped your core, extended core and moonshot strategy you can start exploring which partnerships can help you to accelerate your strategy in those three circles.

Hardcore softies

For your convenience, we’ve made a checklist with every aspect your self-research exercise should cover. A little guide to help you better dissect your company and decide which parts go where. Core? Extended core? Or moonshot? On the one side, you’ll find the hard facts. But we don’t want you to tumble into the common pitfall of only looking at the books, the numbers, the names. Because, yes, these hard facts matter. But you should also be looking at the soft side of your business. There’s the numbers and the dreams, the hires and the humans. Here too, the meta approach works.

HARDCORE		SOFTIES
Strategy Services and product Business models Strengths/Weaknesses (SWOT) Assets/Offer Ambitions and targets (ST/LT) Intellectual property (IP)		DNA Purpose Talent and talents Culture Soul

Moving partnerships from the sidelines to the core

All this self-reflection isn’t the goal in itself, it’s the means to and end, the preparation for engaging in trustful partnerships, building metasystems. In our book on digital transformation in 2013, we wanted to show companies the benefits of becoming digital first by default, not as a means to patch up work already done, or as a shiny afterthought. Now, we are repeating our plea, this time putting partnerships and metasystems at the core of every business in order to survive this wicked decade.

PARTNERSHIPS AT THE CORE VS. ON THE SIDE

Bear in mind such shifts don’t happen overnight, though. It’s an incremental, non-linear process. But, just like the digitization wave, there is a logical order to follow, to operationalize partnerships. We’ve discussed all the layers you can find when self-reflecting as a company and right smack at the center were all things vital for survival. That is exactly where we want your partnerships to be, where they should be. Let’s walk you through the five ways to look for suitable partners.

Follow the guide

We believe there are five lenses to look through for your metasystem partners: strategy, technology, data, people and purpose. All the five points of view are valid, but two of them seem to bear most fruit.

The most logical advice in a strategy book would be to decide on your strategy and to scope your partners as a consequence. Nothing wrong with that. Many companies are looking at technology to complement their own skill set. New technologies are especially popular. Indeed, it requires very specialized knowledge to become up to speed in, let’s say, AI, robotics, virtual or augmented reality. Furthermore, these domains change very fast. The partnership between Walmart and Microsoft is a good example of a technology partnership. Data, being defined as the new oil, also attracts attention from many companies. They are trying to become data-enabled and are looking for complementary data-sources to build new personalized offers or just not to lose out against the big tech players. Many media companies could be classified as following this path.

As already said, these three routes (follow the strategy, the technology, the data) are valid and useful. However, we haven’t found many promising examples during our research. We see two big roads leading more easily to metasystems.

The first one is purpose. A good purpose is inspiring and allows others to join. This is why a good purpose is a strong unifier. On top, in most of the cases, the chosen purpose does not lie in the core of the companies partnering. Reducing plastic is a very worthy ambition. But most of the companies rallying behind this goal are not in the plastic business.

The most powerful driver of metasystems, we have seen so far, are people. People who know each other can explore partnerships in a natural way. The first phase of a partnership is fragile. Everybody is still scanning for options and possible partners. This is a phase of dreams, but also sweat and tears. Possible rewards are still far ahead in the future. Past bonds, built on trust, are a strong enabler.

Marco Derksen, Digital Strategist in the Netherlands, shared an interesting case with us:

“There is no simple trick to build trust. The key question to be asked is: is this going to be just transactional or also relational? A nice example of the power of positivity and trust is Brainport in Eindhoven. Brainport is a technology region in which companies, governments and educational institutions work together to create a brighter future. Located where once Philips was thriving, now new innovations and technologies see the light. Because of the Philips history, many people and families in the region know each other which creates a natural bond of trust. At the same time everyone who wants to participate at Brainport is welcome: freethinkers, troublemakers, initiators, visionaries, doers and other clever people.”

https://brainporteindhoven.com/

Everything to the table

Your striving to be trustworthy is the first hurdle to take if you’re after partnerships that are at the core of your company. It’s about researching all the hard and soft elements that make up your business, the bricks and mortar, the foundations as well as the decoration. You’ve also acknowledged that this is a never-ending process that doesn’t come with a deadline. It’s become an attitude, a habit you’ve taken up. Nice. Now it’s time to dial it up a notch.

Because if all this thinking about your company has been happening only inside the confines of your head, it probably means nothing’s happened. You have to share these insights, let them leave your inner universe. So, don’t just research. Try to materialize your insights – everything you’ve discovered or decided. This ever-evolving collection is your business. It will encompass all of the circles, everything that’s in them and how things move around between them. It will become a system – your system – with its very own elements, interconnections and purpose.

Ideas, people, products, ... orbit around your company all the time as if it were some rock star or the center of the galaxy. Just like any planet, your company has different layers, and the closer you get to the center, the more vital and constitutive the parts are. The further away you move from the core of your planet, the crazier the moonshots get, and maybe, also, the funnier. Just like some other planets, your company can attract or repel certain newcomers, ideas, people, products, methodologies, that come flying into your hemisphere. Well, we’re here to tell you that partnerships are coming at you with the speed of a giant comet, and you better open the doors to welcome them in, if you want to survive the impact.