What are the significant differences between Natural and Business Ecosystems? I wanted to look at this and make some observations and comparisons. Firstly what we seem to get wrong in many labelling of business ecosystems, where sustainability fits, and then attempting to show apparent differences between Natural and Business Ecosystems needs a greater appreciation of differences.
We label far too much as Business Ecosystems.
Applying the label of “Ecosystems” to everything degrades the understanding of its true intent. Ecosystems need to be appreciated as vital and recognized as radically different in how they function and operate.
We call something an “ecosystem, ” which simply provides a rubber stamp of being politically correct, showing the day’s currency, and trying to represent what this means provides additional value or impact. Ecosystem thinking and design are fundamental challenges to how existing organizations go about their business.
Many businesses are claiming “ecosystem” but are, in fact, extending their present, established open innovation activities and placing a greater emphasis on open networking to seek out diverse ideas. This extension alone is not new Ecosystem thinking or design; it is existing thinking.
The Importance of Networks
We must fully appreciate and recognize the potential of the “network effect“within Ecosystems, the inter-relationships that are essential for any ecosystem.
The more connections, the greater the diversity potential and bringing different ideas or views into the thinking and possibly deriving more value; this a not a good interpretation of ecosystems. It is only one part of the design of Ecosystems needed.
Are Ecosystems going the same way as Innovation?
I wonder if we have often just taken to the word “Ecosystem” the same as “Innovation”; it can and often does mean different things to different people but fails to fundamentally “move the growth needle” as it does not have the robust structure, processes and thinking behind it.
Innovation and Ecosystems are both associated with the need to convey the purpose of new growth, supporting existing and new life (growth) in the intent. Still, business seems to me to so often simply offer these as “greenwashing”, conveying a false impression or providing misleading information about how a company’s products are changing to attain stakeholder approval.
We do need to think about ecosystems in a deliberate design
Applying a level of ecosystem thinking really does allow opening up the (internal) thinking to more diverse, open thinking. This appreciation allows for greater collaboration and appreciation of each party’s contribution.
The need for building out of any business ecosystem in the future has to consider the notion of the circular economy as a fundamental part of its building block.
The Ellen Macarthur Foundation does an excellent job of describing this circular economy by asking the question: “What will it take to transform our throwaway economy into one where waste is eliminated, resources are circulated, and nature is regenerated?”
Sustainability needs to be built into the design of Ecosystems from day one.
Ecosystems are the web of life on Earth. The growing realization within the business that this Ecosystem thinking, adjusted for its purpose and needs, is perhaps offering a different future for sustaining what is there but at what long-term cost?
We urgently need to build a much greater appreciation of what Sustainability means. I wrote, “Reshaping the core of your business through a focus on Sustainability“. It gives a helpful set of values and attributes needed for a sustainability approach.
Just let’s hope “sustainability” does not become another catch-all word like “ecosystems” or “innovation” has become; overused, undervalued, and not fully understood its significance to build a business differently. It is so often just promising growth by liberally applying this, and not recognizing this requires fundamental changes in business design, resources and strategic thinking.
We need to take care as we promote the concept of sustainability within business ecosystems, which we are or will be doing.
We need to give back more than we take out of them within our ecosystems to give this more sustaining value to all those who participate. That requires a more sustainable approach (referring back to my previous post) in fully considering any business ecosystem design.
Let me draw out some differences between Natual and Business Ecosystems
So drawing from the points made in a wonderful report released in 2021, Ecosystem Restoration Playbook offers a practical guide to healing the planet.
I thought I would look for (immediate) differences between Natual and Business Ecosystems to give a more distinctive differentiation between business aspects to separate the two.
Differences in Business Ecosystems from Natural ones
-Businesses tend to design Ecosystems as “competitive forces”, not fully appreciating “complementary forces” that might have greater consideration in a globally connected world of interdependencies.
-Business ecosystems look to “transform” the landscape in a given time, whereas Natual Ecosystems are “evolving” over a longer timeline and are not required to be at the same pace.
-Business ecosystems are technology dependant and enabled, as their value is communicating and exchanging distinct parts, making them highly dynamic to thrive.
-Business ecosystems tend to ‘force’ change; they attempt to impose it. Within Natural Ecosystems, those more dominant species, plants, trees, etc., can also impose themselves. Still, it is more based on natural evolution, not a forced one, unless something (primarily humans) intervenes to alter the balance radically, often not anticipating the consequences. Business Ecosystems tend to impose a deliberate need.
-Business ecosystems seem mostly not to want to conserve, consolidate and balance; they are looking to change, redesign, challenge and disturb the existing and so radically alter what is known to produce something different, more valuable or useful (perhaps).
-Ecosystem design should protect, nurture and grow, to build on the existing. Still, as in the business case, it is often very self-centred, striving for levels of “destruction”, often driven by the platform owner looking for competitive advantage and where the ecosystem is built around. The intent is to (re)build its position to be dominant or gain a superior advantage.
-Business Ecosystems look to be agile, responsive to rapid change and disruption and gain that faster “speed to market”. Natural ecosystems react and respond but at different evolutionary speeds, adapting over time to their changing circumstances. Elements of the natural ecosystem evolve in their own time.
-Partnerships are sought out in both a natural ecosystem and a business one. There are similarities; the natural one is looking for being complementary, recognizing its reliance or dependencies for often its own survival. In business partnerships, the need is to search for diverse and distinctive capabilities to advance a radically different position and build a more dominating market position, where a greater “equal” partnership is needed to succeed.
-Companies fight for the best partners, technologies, and networks in a business ecosystem to create, build and defend added value. Equally, in a natural ecosystem, there is the survival of the fittest to determine existing value. Yet, we must often not consider all the different “dynamics” within the communities formed or being formed and future consequences or changes.
-The business ecosystem seeks to develop that outside-in philosophy of finding new value. In contrast, the natural one is more of an inside-out, already showing and maintaining its value.
– We can adapt and have an effective navigation system to adjust or shift to constantly “maximise value” in business ecosystems. In contrast, a natural ecosystem has its place that can and does evolve, but maximising can disturb and actually, eventually destroy.
The business ecosystem is characterized by several unique attributes that I can see evolving.
- To be highly effective in today’s competitive world, business ecosystems require perhaps hundreds of collaborators, making up a rich diversity or patchwork.
- The collaboration is enabled by a digital thread, as its pulse connects all the parts.
- Collaborations sometimes seek not-so-obvious partners within the network to determine and be distinctive.
- Evolution in business needs to be rapid; relationships shift and mature as the recognition of finding the competitive advantage gathers in pace or shows signs of early failure. Evolution is forced.
There are some challenges and contradictions that need evaluation.
-The sharing and exchange of information and intelligence need a created IP framework, whereas we, as humans, struggle to find the connection dependencies in natural ecosystems. Often we interfere and destroy the balance. In business, we attempt to determine or anticipate the linkages. sometimes missing greater potential from purposeful design.
-Business Ecosystems are there in design to transform, challenge and change the existing; regretfully, in the natural ecosystems, we as humans have imposed and transformed far too much by disturbing balances that we have significantly contributed to our planter facing this significant point of crisis today.
Redefining Ecosystems into their different types.
I do like one reference I found in the Ecosystem Restoration Playbook – a practical guide to healing the planet suggests. There are four major types of ecosystem services: provisioning, regulating, supporting and cultural.
Ecosystem services are all the processes and outputs that nature provides us with. These include provisioning services (food, water), regulating services (wastewater treatment, pollution control), supporting services (shelter), and cultural services (recreation and tourism).
Now, what if we similarly defined business ecosystems in the same way?
They are set up for provisioning services and regulating services. they are supporting services and providing cultural or social services.
That might be an exciting way to define business ecosystem approaches as well, and they can evolve by being more specifically designed on their business or societal intent.
My final thoughts here
Perhaps by adopting ecosystems the way we are currently undergoing in business, this constant search for new growth and the higher impact, we are accelerating the further depletion of precious resources in a consumption-driven society. Ecosystems must strive to have a (careful) balance; otherwise, we can have serious long-term unintended consequences.
Business Ecosystems need to be carefully considered and designed; they do need effective orchestration.
*building from a previous post on comparing the Natual and Business Ecosystems
