Growing Innovation
This is an abstract of my speech on business ecosystems and innovation superclusters at the Global Peter Drucker Forum GPDF in Vienna 2019. The article is one in the Drucker Forum “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems”.
Unlike classic collaboration setups, open business ecosystems are not limited in their possibilities. Participating companies can combine their capabilities more quickly in order to jointly exploit new opportunities. Flexibility and speed in cross-company collaboration is what distinguishes ecosystems from other business setups. Innovation superclusters are a special kind of ecosystem, with one additional distinctive feature: they make it simple to quickly grow innovations to profitable size. Innovators in superclusters can easily partner with corporations in joint businesses. Corporations have these capabilities. They can add the punch to grow innovative ideas into profitable operations. They have the resources, the business capabilities, the customer base and the market access that small businesses still lack.
That is the theory. In practice, corporations struggle to adapt to the speed and flexibility required in ecosystems. Their management practices and governance principles are not adequate for joint businesses. Their management practices are too slow to quickly connect with promising partners and to set up joint business operations. IP-management, risk management, financing and staffing of operations are just some examples where corporations today follow governance principles that simply leave no room for the openness, transparency and trust that is required in collaboration ecosystems. These practices are roadblocks to rapid connection with promising partners and the establishment of joint business operations. Corporations need to remove these barriers in order to participate and profit.
Companies like Haier and Amazon show the way to remove these barriers: Corporations have to internally transform their operations into a highly dynamic ecosystem, and learn to manage and govern them according to principles of adaptivity. This step is essential to develop management and governance practices that are required in highly dynamic business environments. Having these practices in place makes it much easier for them to collaborate with external partners. The practices for joint operations are already established and used every day to run existing operations. Extending them to accommodate new external partners is simple. Previous barriers for joint business operations are gone: All existing business operations run according to principles optimized for joint operations. Then, and not sooner, corporations can participate and profit from business ecosystems, quickly bringing in their corporate power to grow promising innovation into big business.
Related articles:
Global Peter Drucker Forum Blog: Embracing uncertainty
Global Peter Drucker Forum Blog: Growing Innovation
Global Peter Drucker Forum Blog: The power of (connected) ecosystems – notes from the 11th Global Peter Drucker Forum
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