INTERNAL AND EXTERNAL ECOSYSTEMS
ALL AROUND YOU
The majority of the examples in this book unfold in the “external ecosystem,” among the different organizations that need to come together for a new value proposition to succeed. But all the ideas we will examine also apply to the “internal ecosystem” that is your organization. Whenever a new initiative depends on the support of other parts of your organization to succeed, you face a combination of co-innovation and adoption chain challenges. Will the finance department need to change the rules for allocating costs and revenues across product divisions to encourage cooperation? Will the service organization be able to support the solution after it is launched? Will the incentive scheme make the innovation attractive for the sales force to embrace or do they need new incentives? Legal, Human Resources, Marketing . . . once you identify what current relationships within the organization need to change to allow your initiative to succeed, you can start strategizing about how to manage the dependencies. The logics we have explored, and the tools we are about to develop, hold independently of where you draw the boundaries of the firm. While the role of power and politics is different inside and outside your organization, the wide-lens principles are the same.
Similarly, while the examples are often drawn from product and technology settings, the ecosystem ideas and principles apply equally in service and nontechnology settings: human resource executives trying to push through a new talent management system; school superintendents overseeing curriculum reforms; government officials assessing the merits of different policy and regulatory choices; community organizers developing a plan for bettering neighborhoods. While they differ in the resources they can utilize and the goals they are trying to achieve, they can all benefit from a comprehensive set of tools for seeing and managing interdependence to increase their effectiveness and odds of success.
Finally, although the arguments are developed in the context of introducing new innovations, they speak directly to the globalization challenge of entering new geographic markets. Here, the message is clear: beyond adapting the value proposition to suit local preferences, it is essential to be aware of how the change in locale affects the ecosystem context into which the adapted value proposition is deployed. Using the lenses of co-innovation risk and adoption chain risk, alongside the tools to come, can help surface hidden differences across markets that will impact how you prioritize deployment and how you reshape the localized offer itself.
In some ways, ecosystem challenges can be viewed simply as traditional project management challenges writ large. The major difference, however, is the way in which you draw the boundaries around the project. A narrow lens will leave you focused on execution risk, prone to ignore the implications of co-innovators and adoption chain partners. But as we will see in the upcoming chapters, assessing your innovation through a wide lens will not only change what you see, it will also change how you approach key strategic choices (part 2) and reveal new ways to fundamentally change the nature of the game (part 3).