From Ecosystem Strategy to Execution: What Really Makes Business Ecosystems Work

Speaker A: Hello and welcome to a new episode of our podcast, Beyond Core. The podcast for business leaders who dare to think beyond today's success and build a future. As you know, in every episode we dive deep into strategies, ventures of established companies and how they build new businesses based on platform economics, ecosystem strategies and entrepreneurial execution. Our guests are, uh, industry leaders, pioneers who are shaping what's next. And today we will further explore the topic of business ecosystems, not only from a theoretical angle, but with a strong focus on implementation, execution and internal adoption and risk. Our guests are, uh, the authors of the book Business Strategizing Entrepreneurship and Structural Change and have spent years researching and advising organizations on how ecosystems actually work in practice. Welcome Pia, Marcos and Erin to our podcast. And before I try to explain who you are and what you do, I give the microphone to you back and ask you, please start giving our, uh, audience a short intro about yourself, what you are doing and why you are so passionated about the topic of business ecosystems. And as you know, ladies first, maybe. Pia, please start.

Speaker B: For sure. Thank you, Matthias. Um, so I'm Pia Neudert. I'm senior project manager at Commerzbank. Um, before that I did my PhD, um, in the field of strategic management, focusing exclusively on business ecosystems. So I spent multiple years working with, um, corporates, with startups, with public institutions, researching that topic. And before that I also used to work at the Lufthansa Group, also specializing in alliance management. So having a good comparison between classical, uh, alliance management and practice and then also new forms of collaboration like business ecosystems.

Speaker A: So a lot of, um, experience. Maybe. Marcus, Erwin, who wants to go next?

Speaker C: Okay, uh, great to be here. Thanks for the invitation, Matthias. Uh, and um, I'm Erwin Hetich. Um, I'm an independent consultant, help organizations to execute, uh, growth strategies and particularly those go beyond, um, single firms. And my work, uh, in ecosystems. And my interest comes from both sides of the table. I spent quite some years as a professor at the University of St. Gallen where I founded and led the strategy lab, which was focused on business ecosystems. But I've also been on the operator seat. Uh, in 2016, I led the ecosystem implementation as a senior manager at a large Swiss insurance company. So I've seen what works in theory and actually what survives like with reality. And I think it's really interesting and what excites me is that many leaders understand why ecosystems m matter but underestimate what it takes actually to make them work. So this is why I think it's interesting and this is why we wrote the book with my co authors.

Speaker A: Very good.

Speaker D: So last my name is Marcus Ka. I'm a professor of Strategic and International Management at EBS University in and um my interest in the topic already started when I did my PhD back in the days at the University of San. I focused on how established companies can renew and adapt a topic that is still at the heart of my research. And I looked at their strategic initiatives and those were already at that time in many cases going beyond organizational boundaries, focusing on partnerships, strategic alliances and joint ventures. At the time um, I uh taught courses at the University of St. Garden at EBS uh on that topic and with the shift in real uh life towards more complex multi partner alliances and uh business ecosystems I also was intrigued by that topic, was happy to collaborate with Pia and Arvin also during their dissertations on these topics. And I'm still fascinated by that question of how can you achieve value creation together and really also tackle complex uh issues and problems as a team.

Speaker A: Thank you very much and it's really an honor for me also to have you three the three powerhouses here in our podcast. And um, our um audience already knows about what are business ecosystems so we don't need to explain them what it is. So let's go straight into the topic. A lot of people know, know business ecosystems. They know there are strategies but it's always the biggest problem is the implementation. And Marcus, you have done the research as well as a professor as you have maybe have lead or let the the whole research. Um, so a lot of companies they have ecosystem strategies in place but why do they often fail? What have you found out? What are the main reasons my way, why they are struggling to implement it or why they are failing?

Speaker D: That's a pretty uh, broad question but a good one because as you say many uh do fail despite the best attempts. And what we see is um, that normally it's not about the underlying strategy, it's not about the planning of the formulation. There might be great ideas but it's happening a bit later when really the multiple patent actors have to commit, integrate and keep investing despite continuing uncertainty. And there are many reasons, a few I ah, um would like to highlight and I think one is definitely about the scope of the ecosystem and what you as a team of organizations try to tackle. So we call that or it's called the opportunity domain. So a product set of opportunities that are organized around problems. And many organizations uh driving ecosystems either define that too narrow and it makes it difficult to attract meaningful partners or they define it too broad. So then it Becomes kind of really difficult and hard to implement. And you have to be pretty clear about uh the why the value proposition that must be of course customer outcome driven and bring together many players with the meaningful purpose. I think the second point and it's not a surprise to the audience here in the the podcast who is knowledgeable about ecosystem but uh the problem that partner commitment so the compliment is joining your ecosystem that their commitment stays shallow. That might be the case because reciprocity is unclear. Right. You always ask what's in for me? When do we get it? What maybe do I have to give up or to contribute? And it's important that you have that credibility that you know it's not just a polite uh way of collaborating but that the real commitment comes into place and that uh this is trustworthy and makes everyone commit uh their best resources. Maybe a third point uh is what you might say that question of the onboarding. How difficult is it? How many frictions are there from technical integration over process alignment, community norms to onboard uh and that is oftentimes underestimated. What we see that you might not have kind of sufficient uh communities partner support systems in place. And that's why maybe also commonly known ecosystems like the Apple or Android ecosystem invest so heavily in developer enablement or what you see at Shopify or Etsy that you try hard to reduce the friction to onboard partners and aspect which is evident in many cases people know better but the business logic is just too short term and that uh many businesses or leaders don't fund the initiative with the long enough time horizon. So that is driven by the quarterly return logic in many uh corporations. But that makes it hard if you under invest if you ask for immediate results which are hard to get in many uh cases and therefore you might uh fail in the implementation and maybe last thing and again if you just think about what ecosystems are complex multilateral collaborations of independent organizations, the complexity of that interdependency of running a system of um many uh which might compete all that might also increase, reduce friction and over time make uh ecosystem not a lasting and successful.

Speaker A: A lot of points which can uh go wrong. And especially the point you mentioned with the, with the long term commitment is really really important. I see this very often companies saying yes let's do this for the next five to 10 years but while running and executing the plan then they change their mind and say ah, can we do this two three years faster? And then the pressure is on to deliver results faster. And then the plan fails and everything starts to fail. And um, yeah, the problems appear and as you outlined there's a lot of stuff you can, you need to consider. And this also means you have to make the right decisions. What are typical decisions you have to make as a leader while you are building up your strategy? One of the most important decisions to make.

Speaker D: Again, very good question and I could uh, you know, answer that pretty uh, in a long way. We have also kind of a detailed way of how you can do that in our book just to advertise that a bit. But I think what we agree on is that at the beginning uh, you have to define the system level value proposition and that's a really important uh, thing to do. What integrated outcomes should be the customer experience. And uh, you know, there it's helpful to map the ecosystem journey end to end and identify also where handovers take place and maybe just to give again a straightforward, well known example in the electric vehicle market, right. It's not about just buying a car but uh, it's about the broader journey that uh, you want to have charging access, uh, services supporting complements and so on. And if you design that customer journey from the beginning, uh, and adapt it uh, continuously that helps. Second thing I think is uh, what is well known in the literature in the business world as uh, a so called minimal minimum viable ecosystem. We think that this is one of the most important execution tools that you have early on the smallest configuration of partners and activities that can deliver already a real working solution and produce also evidence of that value creation. I think that's really important and that might also take that early on it's not about profit necessarily but really kind of that uh, viability early on commitment, trust can be built, uh, because I mentioned before, that also increases then the commitment by partners. If you have that fast learning. And third, and we also did a lot of research on that, uh, is I think role clarity. So we all know that you can have different roles. And at the beginning we always observed that um, take the insurance industry, everyone wanted to play the orchestrator role because that was, you know, you're still in charge, in control. We can discuss that later on. But of course there are other roles. You might be a uh, core orchestrator, you might be complementary, you might be a connector. And we have seen that this role clarity is really important and that you can also thrive as an individual organization contributing if you are a complementer in that uh, ecosystem role.

Speaker A: Maybe I can ask. But this role clarity is exactly a big decision you have to make. And I can imagine and also from our Experience, it always drives a lot of discussions. As you said, many of those established companies, they are uh, leaders in their market. So they see hey, my role is the orchestrator, my role is the leader here in this business ecosystem because I'm the leader in the past. So I also want to stay the leader in the future. How do you see, how can you go into this discussion and maybe uh, recommend taking a step back and maybe taking a less important role or another role in the ecosystem to increase your

Speaker D: chances of success or you can make that happen.

Speaker A: Yeah, exactly. So how can you maybe a kind of a tip or kind of a recommendation for the leaders. So how if they see this kind of discussion and debate in their own organization and maybe this will lead to nothing, how can they maybe twist the debate uh, to make m step forward?

Speaker D: Good point. Maybe it could be uh, back to the, the question of how much investment is required. If you are just a complimenter, someone may be multi homing on different ecosystems. You have the chance to try and error not going being the orchestrator of one ecosystem but having the chance to hatch your kind of business, uh, risk and thereby convince your uh, managers or the leadership team. And of course always then providing examples of um, success cases. I think that could be a good uh, starting point. And also knowing that even as a compliment that you might be really central if you for example are able to overcome what we call strategic bottlenecks so issues which might kind of make ecosystem not working properly. Uh, again if you think I used the electric vehicle example, if you think of Tesla in the early days, they had to remove the bottlenecks in terms of battery economics, charging infrastructure next. And that might be a way of uh, also benefiting tremendously if you as a complementer gain that uh, really important strategic positioning by overcoming strategic bottlenecks, being the solution provider for the overarching value proposition.

Speaker A: Very good points.

Speaker B: Um, maybe one point to add on that part especially I think established companies also need to think about like who is actually the best party in the ecosystem, who has the uh, interface to the customer. Because what we have also seen in our research is that many startups especially have very customer friendly, very nice user interfaces are built for um, ecosystem collaboration. And then it can be really a good position to be a complementer as an established, reliable, often certified company who's basically the backbone. But the startup on the other hand is then the customer interface. And for many established companies that's a big shift because they were used to being like the big brand, the face to the customer. But with this ecosystem approach, these roles can change and um, it's still worthwhile to do it even if you're not at the direct front, um, toward the customer.

Speaker A: Yeah, those are uh, two main points here. So first, it's always good to have this customer orientation and think about the customer from a customer first perspective. And second, also taking in this kind of investor perspective. So see, it's not just one decision you make. Maybe you can have multiple roles in multiple ecosystem and therefore hedge your chances, hedge your risk and see how it plays out. Um, you also write in your book about different ecosystem archetypes. What are maybe the top two or three archetypes you see right now? So the most popular ones in the strategies right now and what makes them so beautiful, let's say so attractive.

Speaker D: So with the ecosystem logic, how we use the term, we differentiate different types of ecosystems and to us that is at uh, the highest level, of course there are nuances to it, platform ecosystems, innovation ecosystems and business ecosystems. And it's important to uh, distinguish between them because the implementation challenges are different. And uh, you might also link that again to the strategic intent and the industry context. So if you are in an industry where you have frequent interactions and they can be standardized and maybe the strategic intent is to scale intermediation, then of course we talk about platform playbooks in a way for ecosystems, when it's more about having multiple touch points and end to end solution differentiation, that might be the classic business ecosystem. And when it's more about uncertainty, you know, the final product is not yet developed or the solution and we have a high uncertainty, might be regulatory, might be technological, then we might talk about innovation ecosystems and probably I don't say anything, uh, novelty to your audience. But of course if you have a platform ecosystem, it's differently managed and uh, what we found, what works most of the times best is if you have a sequential approach. So first trying to kind of implement a model to manage between transactions, right? So build the platform, prove that the transaction platform works, then extend to onboard complements, then you know, um, grow that model in a way govern it that it's a sustainable running business or platform ecosystem in that case. So the commonly known chicken neck problem has to be overcome that you have sufficient kind of activity on both sides of the market. And a common example we like uh, to Talk about is OpenTable. Other one might be Airbnb, but OpenTable, for example you had early on a transaction platform only, so you connected people who want to dine in uh, a restaurant and the restaurants and over time that evolved into a platform ecosystems when you expanded that with complementary services around restaurant operations. So it was not about kind of the matchmaking but also about running restaurants in a better way. And afterwards of course you have to scale that in terms of business ecosystems where it's more about the end to end customer solution. And I think I can go back to what I mentioned before. You start with the minimum coherent customer solution, you try to stabilize the interfaces, um, have coordination routines and manage that expanding partner number and variety. Um, and I think it's a lot about integration, discipline and then innovation ecosystems are again interesting where it is about co creating innovation, more uncertainty. And in that setting I guess there are different models. Again what we found interesting is the term which is widely shared as the so called sharks dilemma, uh, that some of the incumbent players don't go on their own as an individual company and trying to convince startups to collaborate with them but that they first joined forces with another established company. So back in the days the example of Freenow or the Year now family BMW and Daimler collaborating, creating a joint venture and then trying to onboard startups, convince them to collaborate e scooter or E bike providers because otherwise the risk would be too high for these startups that the one big partner might dominate them and extract uh, value. Um, of course we might have innovation intermediaries. That's also an interesting model. So again that's what I meant with their nuances to it in the implementation. If you have such an intermediary, um, take for example the tech in Frankfurt which plays such a role for uh, banking organizations, um, in the tech field I think there it's all about creating what it's sometimes called as that constrained serendipity. So in a way that intermediary has the role to create an atmosphere and endeavors where you might bump into other people's, get new ideas. But uh, it's constrained in a way that these have been preselected on certain criteria and you have high quality interactions. So I guess repeatable transactions first in a platform ecosystem, then kind of complementaries, then scaling that and uh, the other two differ a bit in terms of how much innovation uncertainty is um, part of that gateway.

Speaker A: So it means there are a lot of different archetypes and each archetype has its own way of implementation and so it needs to be carefully selected what kind of archetype you are following and then based on that you based on that decision you need to follow always or build up a different kind of plan. And um, you mentioned about uh, onboarding users, winning customers, etc, but there's always also an in more like of an internal hurdle you need to overcome, which is called governance and pr. You are from a also kind of established company right now, as you introduced in a bank environment, very regulated kind of established. How do you see business ecosystems managed from a governmental perspective inside of those kind of larger organizations?

Speaker B: Yeah, so first of all, um, I think I'm speaking for all kinds of larger established firms. Um, also having the experience from a Lufthansa background and now from the banking industry, um, most of the time when business ecosystems are, let's say conceptualized and planned and maybe also initiated, that usually starts in the strategy department or in some kind of innovation lab. And that's also completely okay because that's, that's usually where it belongs. It's a form of corporate development in some way. Uh, so most of all like an alternative development mode compared to for instance classical alliances or M1A. So that's a good start. But the problem usually starts when it stays in that isolated unit only. Um, because essentially, especially thinking about what we've already talked about, that customer interfaces may change, that you have this new ecosystem value proposition that needs to be implemented. Many other departments need to come to the table. So you need to think about how do you do the marketing? Do you actually still do marketing or is that given to a complimenter? Uh, how do you do pricing when you may not have the authority about all pricing components and what are uh, also adaptions to your financing, KPIs, to your risk management. All these topics, they need to be discussed and they cannot be discussed in the strategy department only. So that needs to be a dialogue between the different business units and um, the people who have crafted the ecosystem from the outset. And that is something that often does not really take place because uh, yes, it gets complex of course, um, but at least for the part where you try to scale the minimum viable ecosystem up until the point where it's at some point mature and also allows you to capture value, you need to have that dialogue and that creates also tensions. This is something that we have also seen in um, my dissertation that uh, especially also established companies have tensions internally when getting on that ecosystem transition. And yeah, so this is the structural component that needs to be, to be overcome. That's the first part. And when you have overcome that one, you usually also have a process component. Um, because firms, um, especially established firms are used to the classical investment return calculation. So you create a um, business case and then you look at the outcome. And you measure is it according to our projections with ecosystems and the uh, let's say malleability of them so that they are kind of in flux and usually not highly pre planned. Uh, you need to adjust that a little bit. And this is also something that we um, intensively discuss in the book. How you can shape those conditions in order to create a uh, well working ecosystem. But you don't have the entire hierarchical um, mechanisms that you usually do when you have your entire, your own business, business units. So you cannot fully say dear complementer, you have to do XYZ because the complementer is still an independent organization. And sometimes you have the problem that you even don't know your complementers yet. So it kind of becomes a little bit um, more difficult, especially in the beginning. And we've also made the observation that even if there are different firms in the room, like startups, established firms and so on and so forth, everyone is like willing to maybe create an ecosystem. It still requires a certain behavior from all actors in order for that to work. So they need to share that they probably beforehand had internally about like their innovation plans, their interfaces, their, I don't know, database, whatever. And they need to bet on others to reciprocate that and from there on continuously build the ecosystem. So to make a long story short, in the end you don't have full control over your outcome anymore. And that usually is the part where things get difficult. Not because firms can't deal with uncertainty, that is something that firms have dealt with for since their existence. But um, you usually have to adapt your ways of measuring success. And that's also why we have um, proposed uh, different KPIs in the book that apply to each stage of the ecosystem. So as Marcus mentioned in the beginning as well, you can also measure success in terms of learnings. So working with novel customer groups that you may not have had contact with, you may learn how to deal with complimenters that you have not worked with and so on and so forth. This can be investments that will pay off maybe in five years, so maybe working with a cool AI startup, whatever, but they don't pay off usually immediately like you have when you have a traditional product that you can simply sell. So that is the third component, um, that established firms need to take care of thinking about. How do we measure success and what are potential scenarios that could arise that contribute to that success and have more of like a projection or forecast instead of a clear, let's say in year one I will get cash flow X. So it's more like working with scenarios and, and then building your KPI framework around it.

Speaker A: Yeah, um, very good answer with a lot of aspects. Um, and I can agree to a lot of them. Um, also what you mentioned at the beginning. So we also see very often that this ecosystem strategy is born out of a strategy department or innovation unit. But it to really take off it needs the commitment from a business unit. So what we usually do is something like an activation workshop we call and in the activation workshop the board of directors, they need to come together and then you need to sense which kind of business unit has the ambition, uh, to try out and build up a business ecosystem. And so the only purpose of this workshop is really to find out who really wants to go this way. And maybe some of the business units same, uh, it's too risky or whatever. It's not, not in for me right now, maybe later. And the other one saying yes, this is something for me, I want to go. And then you see who has the, the willingness to do this and then you can work together with them as a strategy department, as an innovation department or whatever as you, as you said. And the second part of your answer is also really good, uh, about the, the process of building it and all the risk throughout the whole process. And you uh, also mentioned the minimal viable ecosystem starting. Yeah, think um, and then within the mve you can kind of start small. But also how you measure the risk on or how, how do you measure the progress based on different KPIs. It's, it's like an like, like I would say like in, in a startup right in the beginning when you go to market you want to element. Eliminate the biggest risk out of your assumptions and those, this means like how much can you learn? And the learnings are measured against ah, your hypothesis against your assumptions and how many, how many of them you can, or whatever. How many can you, can you, can you confirm um, what other risks you maybe see throughout the whole process and how to deal with those risks.

Speaker B: Yeah, I think first of all it's, it's a good point what you just summarized that leaders need to take care of that there is risk in ecosystems, but it's not completely unmanageable. So I think this is also something where ecosystems get a lot of criticism in terms of. That's just, just this, let's say betting on um, I don't know, uncertainty without any like projections you can make. That's not true. I mean you, you still can extrapolate a little bit like where could our Value proposition develop? Does it more go into a B2B direction or B2C direction which complement us could be attract. So you can definitely um, manage the risk. And I think the one point that managers, um, especially from established firms but also from startups, that's more or less the same should have in mind is that when you look at classical alliances you usually have um, the project risk, so the endeavor that you want to start together and you have the partner risk. And in alliances, you know, ex ante who's your partner, you can make a contract, uh, and you uh, can work out all the conditions like if you do X, then we do Y and so on and so forth. If the parties generate that amount of income then they will distribute it accordingly. That is usually um, predetermined upfront with ecosystems. What we also just mentioned is that um, oftentimes you don't exactly know who your complementers will be because you build an open form of collaboration or senior open where you can attract uh, new business partners. Like for instance in the ecosystem that Marcus just mentioned, um, with you now they had lots of like e scooter startups then that joined the platform and also other players and the platform grew in that way. So you need to manage that complementary risk. And also in that case you need to take care of like where are you in your ecosystem journey? Are you just in the beginning and your biggest problem is that you don't have complementers yet and you might not attract them. That's a totally different risk than when you are in the later stages of an ecosystem where you have an established way of managing your complementers, onboarding your complementers and you could be prone to the risk of for instance being taken over by them. So because they see how the ecosystem works, why not build their own? So that is a different kind of risk. That in mind is something that usually requires some rethinking uh, from decision makers. And um, it needs to take into account this uncertainty that I just mentioned and also the potential tensions that can come up not only with the orchestrator and the complementers, but also among complementers. So because you often have the case that you may have companies that work in the ecosystem who are actually still competitors. So that can also be another risk, um, that needs to be managed. And essentially it's taking into the account that you have this modular structure, that you have this fluidity among complementors and uh, that the ecosystem is still developing. And that is something that usually firms struggle with. But that is also the part where customers uh, benefit tremendously from because they are not forced to take that one stop solution. But they can choose, they can uh, modify uh, the value that they get from the ecosystem. And that is usually why many customers then also stick with a certain ecosystem because they have this modularity they benefit from even if it creates additional risk, uh, for the firms. So that is the trade off that firms usually have to manage. And um, as I said in the beginning, it's not a blindfold approach. Um, you can measure and manage that. It just needs some rethinking. And I think that is exactly what we talk about in the book.

Speaker A: Very good point. I mean you mentioned a lot about risk right now and then you could say, oh, if I see and hear a lot of risk, then I don't take this approach. But on the other side you also need to talk about the chances and why you need to do this. So it's um, sometimes it's not an option not to do it. It's. You always have to do it or you have to go this way and try out at least, but you always have to see the, the chances. And um, yeah, I mean maybe this is also a good way to uh, to, to just.

Speaker C: I would like to. Matthias, I would like to just sneak in one more risk which I think is absolutely under, underestimated here or, or not not really mentioned, at least not in, in this explicit sense. It's, it's coming from organization because you know, managers with um, you know, particularly those who not, not understanding the concept that it takes a long time, it's marathon, not a sprint that underestimates, um, you know, the m. The amount of time that it takes to build up this ecosystem. They are the biggest risk because they're killing ecosystems before they're actually flourishing. You know, and that's a, that's, that's a huge, you know, internal risk that you have. And we've talked about, you know, the importance of uh, understanding why it is important why you need an ecosystem in the first sense. So you need to really clearly answer this question before you really start off with an ecosystem. You need to get the, why you need it right, uh, to get this risk out of the organization.

Speaker A: Yeah, but also a good point, um, how to protect it against internal governance risk. Let's say this way. Very often then companies uh, discuss the option to create an own legal entity for this new kind of approach because they see the risk, uh, that it's drawn into internal governmental processes, reportings and other kind of structural things which delay and, or maybe create conflicts and Other political things. Then sometimes it's easier to create an own legal entity, give them their money, give them their budget, give them their own decision rights, etc, maybe also the independence, um, see, of creating an own brand or whatever, but it protects them to go fast. How do you see this or how have you seen this so far? Is it more like 50, 50? Is it? Yes, this is the better approach. So always kind of in 90 of your time you would recommend to create an own legal entity or have you also seen successful cases the other way around where it has grown better internally? So how, what is, what is your research or maybe your experience telling him to all of you?

Speaker C: Um, maybe I can, I can get this, or at least I can with this. So, um, you know, that's a, that's a question that has some, you know, paradox answers because, uh, yes, you're right. You need to decouple and sort of uh, you know, bring it away as far as you can from the organization that it has, you know, space, um, to actually, you know, to unfold itself, to you know, to get established, to work to find its working mechanisms and so on, um, and not get crushed in the typical organizational processes, the traditional ones. But at the same time if you keep it a distance, it might hunt you down later on because you then cannot convince the whole organization, uh, to really, uh, take this shift towards the whole organization. You cannot simply transition that logic of an ecosystem into the whole organization because it will simply work just like an antibody body. So you know, it will just be not accepted but many managers. So you need to keep it the distance in one sense, but at the same time you need to keep it aligned and in touch with the whole organization. Because there's um, um many examples where you know, there were um, ecosystems established and some business divisions maybe even apart from organization that actually failed because they were not accepted by the whole organization as they were reintegrated into um, you know, the core corporate body.

Speaker D: Very good answer. Not much to add. Um, I just want to highlight again the case I made with BMW and Daimler. I think when you want to at least signal some neutrality to partners, that might be a good idea to have a new legal entity like the joint venture they found it because that might attract more powerful partners. That could be one issue in addition to Alvin's contingency argument in terms of integration.

Speaker A: Yeah, and as you, as you said, I like the point from, from Erin, you, you also need to make or create or build kind of a bridge between the old or established organization and the new Legal entity. So it's not just completely independent and then they run and then once in a year you come back and then you see how it's going on. Very often it's, it's, it's good to establish a uh, kind of a bridge. In our cases we help the companies to set up a so called digital growth board board. And this growth board is then yeah uh, having the power and the budget to invest. So they have this kind of investor perspective as you said before. But they are also monitoring the KPIs on how to make progress. How do they different investments, how do the different ecosystems we build in different startups and different other initiatives, how do they develop? And then they can make these decisions. But part of the board is always managers or board members from the established companies, but also the representatives from those newly created ecosystems. And then they have a room, they have uh, um, an organization where they can exchange and make decisions jointly together. So this is a kind of a bridge. But there are a lot of more things which can go wrong. But also costs a lot of time and a lot of effort. So maybe Erin, from your point of view as you help and support companies to go along this way, what are maybe activities they maybe underestimate made?

Speaker C: Um, well I think that's uh, that's sort of this uh, typical what we do on, on, on Monday morning questions. So you know, if you move that whole topic from sort of the theoretical conceptual aspect towards the practical, uh, you know it really gets messy. And I think um, besides those things that we've discussed that you need to you know, straighten out all of these aspects like you know, what's the joint value proposition? Why do you actually need an ecosystem and all of those things that, that are the bas sort of for starting this topic. What companies tend to underestimate is that ecosystem execution becomes operational often much faster than expected. So in the beginning it feels like having a good strategy debate and it's about envisioning these things and so on. But within weeks, sometimes even within days, it turns into a very serious life coordination where you need to onboard partners, resolve conflicts, trade off decisions, uh, decisions about resources and all those kind of things and also talk about things and make decisions um, which are beyond your control. I mean Pia and Marcus have discussed exactly that aspect. So given these challenges also my co authors uh outlined I think this shift can be paralyzing to many organizations because simply they're not prepared to that. Right. We're talking not about a simple strategy, but this is a new operating system system if you want. And you know, installing a new operating system takes some quite serious steps inside an organization. So, uh, the first practical step, I think they. Many companies delay and then later probably also regret is, you know, is uh, not building a concrete starting use case. I mean, starting out with something that is very practical, that is tangible, that customers can actually experience. Um, I mean, it's a typical kind of, you know, let's prototype and let's, you know, get this thing out kind of philosophy. I think this is, um, this is probably one of the most important aspects, you know, not uh, a broad vision, but one specific journey, uh, where the ecosystem actually truly adds some value. Um, it's what we call, and Marcus actually explained it before the minimum viable ecosystem, uh, concept that, that actually adds momentum to this broad vision, you know, that you usually talk about, because talking about ecosystem feels very nicely. Um, but you know, when you, when it gets into the execution, it can get, you know, can become very messy. The second step I think is, uh, setting up, uh, the operating model early on. So really distributing the task. You know, who's doing what because it's a big beast to be, to be tamed. Um, so who owns the partners onboarding, you know, how to resolve conflicts, you know, what decisions require, joint agreements, how do we coordinate and how often do we actually meet, you know, with this, without this, um, I guess flexity so, um, you know, will explode and actually trust in the whole, in the whole journey might erode. And the last aspect, uh, that I'd like to highlight is ecosystems fail because companies, uh, postpone their hard commitments. I mean, you need to really commit to this thing. And we're talking probably not, uh, about, uh, a quarter or a year, but probably sometimes about decades to install this type of philosophy and this new operating system. So getting interfaces, right, data sharing rules, uh, the commercial logic, the sort of, the monetizing mechanisms behind it, uh, that's an important thing. And the orchestrator and the partners have to invest and to commit. Um, and without it, I guess it will not really take, uh, off. So that's, if I need to summarize that. I would say it's momentum beats elegance. So it's not about to get it to make it perfect, but to make it work.

Speaker B: I think Strava is a really good example for that. They started out, um, sometime in the 2000s with like compatibility with Garmin, only only for road cyclists. Um, so it wasn't pretty, but it fulfilled a very good customer need. And when they did that, they expanded to different sports. So they became better in tracking, running, they expanded to multiple devices and then only when that worked, they expanded into what you would consider as maybe the fancy stuff like collaborating with brands, um, building up those social media presence, having all those third party integrations. And now if you look at them, it's insane what they have built, how they have also built premium features that users actually ah, value because they stick to their roots, namely that um, you can track your sports performance and it makes you better and you can interrelate with your fellow cyclists or runners and so on. But in the beginning, just as Erwin mentioned, it wasn't really pretty and it wasn't that fancy as you could see it now.

Speaker A: Yeah. So it has a bit of um, an startup approach. Right. So. And um, you also mentioned that. Yeah. So thinking and talking about the strategy is, is one thing and maybe the established companies are good about it because they have their established business, then they have a bit of time and then they can start talking and dreaming and envisioning things. But the hard thing is doing it, implementing it. And then it requires a kind of an entrepreneurial uh, approach but also an entrepreneurial muscle, I would, I always say. And this entrepreneurial muscle, they, yeah, it's, it's kind of unlearned in the established companies. Is this something they can relearn? Is this something they can bring back into their culture? Or is it only achievable by bringing in external entrepreneurial talent into the new organization? So how do they can. Yeah, yeah. Bring in the right capabilities building an ecosystem like entrepreneurship?

Speaker C: Yeah, I guess if I could uh, start answering or trying to answer this question, I would say that, you know, uh, every employee has its talents and some, some of the employees are simply born to innovate, born to conceptualize and vision things. So you would need these type of characters. Right. So you need people that actually like going across organizations, you know, span boundaries, connect people and probably also think about and dream about something that does not exist. Right. And then on the other hand, on the other part of this, you know, of this um, continuum, there's probably these types of executors and use, need, have them, you know, building interfaces, you know, getting probably the M mechanics.

Speaker D: Right.

Speaker C: The organization mechanics. Right. Um, you know, tracking, monitoring these type of systems, I think you need both types of employees. Obviously. You know, this is also known as this whole ambidexterity type of philosophy in organizations.

Speaker D: Right.

Speaker C: You need to um, you know, exploit and explore kind of topics. And I think it's the same with ecosystem systems and. But uh, Um, I guess one thing that is important is to actually show employees inside organizations with quick wins that it works. That it's actually, you know, the puzzle is getting together, it's coming together and, and, and things are, you know, clearing up over time and, and the concept sort of, sort of moves from, from paper to reality and then, you know, people start actually believing in that. And I think it's important to install all. You know, going back to our debate about, you know, this, uh, the importance of convincing and embedding this whole ecosystem thought inside the whole organization is it needs to survive the next CEO. Because we've seen cases, you know, look at Balwas for instance. I mean they've erected an ecosystem for almost 10 years. Uh, with the next tenure, you know, the next CEO came and he said, okay, we're focusing on the core again and go, gone was the ecosystem and with it all the people and you know, all the startups that were sold off and so on. So uh, the reason if you talk to people from, from, from that organization is um, to um, at least to some degree that they have not, they've missed out, you know, bringing that whole thought into the whole organization rather than keeping it, you know, as a, as a silo in itself, believing that actually it will, it will convince other employees over time. So I think it's, it's, it's both, right? You need both types of people, but at the same time you need to have also, also successes, um, that actually then draw people into that whole, you know, idea of an ecosystem.

Speaker A: So then it's again, bit of dream big, start small, but iterate quickly and bring up, uh, yeah, small benefits quickly and, and show the benefits and show that it creates momentum as you said. Um, yeah, I could go on and talk for hours with you. You bring in a lot of great topics. I assume a lot of this is also written in the book. So if everybody wants to learn more about this, they can um, buy the book, read the book, internalize the book, but also reach out to you, uh, if they have further questions. So we will put in our show notes here the link to the book, but also links to your LinkedIn account so they can connect with you. But as a, a, as a closing, um, maybe if you look back what you have learned in the last years exploring the whole topic, is there one thing you kind of would like to recommend or you can kind of a magic thing you, you discovered and you would like to let people know here, uh, about this is a special thing they should definitely consider when building up ecosystems. Maybe we can um, go around here and each one of you can maybe give a bit of like this, this is the one which fascinated me the most and this is what I would like to let you know and, or

Speaker B: recommend then I can start uh, maybe also this round. Um, so I would say um, as an organization think about who actually must contribute to making an ecosystem work and then really announce who will be ecosystem proponents in the different business units who really also get some education, some knowledge that this is now a task where they need to collaborate with externals and they need to align with internal colleagues and that it's not like an easy feat to do that but it requires some difference in management approach. And I think that is something that should be taken into account and where you can build up, let's say um, these bridge makers or bridge builders who can actually develop the ecosystem into something that is actually working and not something that stays in the plans of innovation unit.

Speaker D: Let me maybe go next because I'm pretty aligned and close to what you just said Pierre. So I think there's not the magic one, magic formula. But back to the discussion we just had what Evan mentioned in pau. Now I think having a champion who is driving the top topic, the mindset shift in an organization is important and uh, both internally and externally building a community. And we have that example we followed closely, which I think, or we think is pretty impressive. Um, that ecosystem Bosch approach, which is interesting if I had to summarize it, um, even though that's a soft topic but that mindset shift is important internally in the organization. Um, from kind of the non invented here syndrome to an open strategy. That's a big theme also in the strategic management field which is highly relevant here. We have discussed it, that long term orientation, that mindset that you accept a certain level of uncertainty like in the startup, what you, you mentioned before and live with it and use it to your advantage. That is um, in addition to that more collaborative mindset, not uh, necessarily competitive one, how we all trained our strategic colleges and the, the MBA classes around the world. I think that has to shift. It's shifting already. But that's important that this also comes the reality in these organizations who want to thrive in and with ecosystems.

Speaker C: From my side I would say uh, one big thing that's, that's really key here is that you have somebody who is an owner um, of an, of an ecosystem. So a real authority because in many organizations this is something that we observe as an ecosystem hobby. Right. I mean it feels nice to talk about it and it's inspiring and then you have some, you know, some new term terminology but it's, it's really hard work and there needs to be a responsibility. Somebody's taking on the hat and then you know, driving the whole thing and then, then rallying people around him or her to really for the case. Um, uh, and, and, and the balance of course between you know, thinking broadly and then actually going into the details. This is huge kind of challenge that you need to overcome in the sense and um, again protect it, um, you know, protect the person who is responsible, the team, but also the cause. Um, and this topic, you know, you know, setting in mechanisms to, so that this whole uh, journey of building an ecosystem is protected for a specific time where it actually then can show that it proves, you know, successful over time. I think that's, that's the key part here.

Speaker A: Yeah, very good point from all of you, thank you very much. I think it's always good to have those like minded people in the same room and sharing and I, I feel really that we all have the same passion for this ecosystem topic and ecosystem is like what you said, a team sport. So you bring different people together and they collaborate and together they can achieve much more than what they can achieve alone. It's sometimes hard nowadays when you see all the other movements in the world where ah, people more go into an ego system instead of an ecosystem. And uh, so it's good to have the people out there passionated about ecosystems and helping people to understand and implement this. So thank you very, very much Pierre Marcos Erwin for joining was a pleasure. And maybe in one or two years we have the same conversation or the next round of conversation here, here again and then we see what uh, what other successful cases we can talk about. So thank you very much for joining and yeah, we will put everything into the show. Notes that everybody can follow and then let's see.