Ecosystems have always been a key driver of successful innovation in great companies like Microsoft, Apple and Amazon, but today, ecosystem innovation is taking centre stage. Louise Kelly, of Hearts and Minds, investigates how symbiotic value between companies is created in ecosystem innovation and the conditions that need to be in place for ideas to come to life, with some lessons from the leaders including Thought Leader Rod Adner and Cisco.
Ecosystems are essentially a system of platform based business models, where business models and technologies are commercially interdependent. Backing the right ecosystem is critical to business success, and being outside the prevailing ecosystem is why superior technologies often fail. “You are only as good as your ecosystem” say those in the arena.
Co developing successful ecosytems innovation require us to first look wide then fast track from innovation to commercialisation.
First look wide
Being Ecosystem Innovation saavy all starts with peripheral vision according to Rod Adner in his book The Wide Lens: A New Strategy for Innovation. Through peripheral vision we look beyond our business boundaries to consider;
What ecosystems currently exist and which ones are strategically important to my business?
Are there an forces on the horizon that may mean the ecosystem has a use by date? Are there any potential redundancies in the ecosystem?
What innovations do I need to synchronise with in order to continue to be current?
Is there Ecosystem Stewardship
Is there a key steward looking after the sustainability of the ecosystem and the greater good of the customers and partners within the ecosystem?
Who needs to adopt the technology in order for the full benefit to be transferred to the customer?
What does it take to bring the innovation to market on time and on spec?
When we have mapped the ecosystem environment we can then pick our partners to move from innovation to commercialisation.
Create a fast track from innovation to commercialisation
Cisco have not only worked within ecosystems to extract more value, they have incubated ecosystems within supply chains and vertical markets, in their Berlin based Cisco Hyperinnovation Living Labs, CHILL. By analysing their approach to innovation we can pick up some transferrable principles and practices that may make ecosystem innovation more accessible to all of us.
Compress time to market
Cisco have compressed the time to market. By removing the boundaries between businesses and silos, Cisco have broken speed to market records and harnessed value in ways they claim to be unprecedented in the history of commercial collaboration. CHILL collected the Edison Award in the category of Collective Disruption this year. In an article in the Harvard Business Review November 2016 they claim 75% if their innovations are funded.
Cisco have brought together collaborations between leading organisations such as Nike, Costco, Visa and Lowes co designed a locker filled with a personalised range of goods based on predictive data which could lift sales up to 8%.
Here are some of Cisco’s practices:
They prequalify where the synergies in the marketplace lie and those organisations that best suit ecosystem collaboration. The criteria was as follows:
Synergies – up to 4 organisations whose combined efforts deliver a single customer value proposition
Best suit collaboration- Companies pursued ambitious projects, were mature innovators and had a history of innovation partnership
Commit on the spot- Companies that were able to devote a significant number, around 6, senior decision makers with an intraprenuer mindet, with financial resources and klout to to say ‘yes’ on the spot.
Okay with IP Protection – In order to save the IP delays, Cisco developed a simple 2 page agreement which safeguards existing IP brought to the table to their original owners and established a share in equity from the innovation which directly reflected their respective contributions of human resources, IP and money.
From perherial vision to a focus on a single problem
Preparation-Participants in CHILL come with 3 months of preparation so all the input are there ready to go.
Focus on root cause to find single problem – They use root cause analysis to find the problem at the core
A rapid prototype is developed
Early Prototype – A two day event concludes in a rapid prototype which includes, decision makers, engineers, and customers. These early prototypes can be cut outs, storyboards, drawings, which later become digital mock ups.
Halfway mark reality check – At dinner on the first day participants debate whether they have hit the nerve or need to pivot their focus.
Pitch to investors – Midday day 2 involves a pitch to investors who have committed to an ‘on the spot’ decision. Those projects who are not funded are unpacked to determine their exit value, that is their transferrable assets and knowledge that may be applied in other areas.
Wrap stage – The session concludes with a 2 weeks packaging exercise which creates and bundles a build archetype including: content from the session, customer feedback, insights, physical architecture, a business model and a plan of action for 6 months.
In order to become successful Ecosystem Innovators we need to widen our focus, build relationships with collaborators and remove the barriers to execution. We need to look wider and further ahead than ever before.
Founder Thought Leaders Circle
Customer experience and brand expert