Outdated belief #10: It’s only about the customer and us

After decades in the industry, I have yet to meet the first company that doesn’t claim they’re customer centric. There remains a widely held belief that if we focus all our energy on the customer and build what the customer tells us to build, we’re going to continue to be successful. Still, the quote from Henry T. Ford about asking customers what they want (a faster horse) is relevant in today’s world as well. We shouldn’t ask our customers but rather invent the future ourselves and then request feedback.

The focus of this post, however, is on the business ecosystem in which we operate. Stable and long-lived ecosystems tend to be horizontalized with very clear roles for the players in them. The ecosystem is typically enabled by an architecture that defines interfaces between the different components in the ecosystem and, by extension, the interfaces between the companies operating in the ecosystem. As business strategist James Moore already discussed in 1993, companies can be viewed as organisms in an ecosystem and the ecosystem provides benefits in terms of an improved competitive advantage that doesn’t exist outside of the ecosystem.

A good example is the computer industry. During the 1970s, the main computer companies built everything in-house, including the chips, the motherboards, the operating systems and the applications. They did their own sales and service and were a completely vertically integrated ecosystem. In the following decade, the computer industry horizontalized and specialized players for each of the components in the ecosystem appeared. So, we got Intel developing chips, PC makers like Dell, operating system providers like Microsoft, numerous application developers and, at the time, computer stores selling computers and software.