Rule 10: Engage with your ecosystem

Traditional business ecosystems were quite static. Partners stayed partners, competitors stayed competitors and your customers were the same as who they were yesterday. In a digital world, however, business ecosystems are in continuous flux. Your supplier becomes your competitor. You become your customer’s competitor. You partner with companies that you never heard of a month ago.

There are at least three patterns causing business ecosystems to undergo continuous change. First, digitalization often changes the business model from transactional to continuous, eg subscription based. As a result, the company providing the product wants to own the customer relationship as it simplifies the continuous delivery of value through, among others, software updates. This puts tension on the relationship with the intermediate ecosystem partners, such as wholesalers, resellers and installers, as the product company is now jumping over them to reach the end customer.

Second, digitalization is about software, data and artificial intelligence. When a new technology is introduced, companies often start to collaborate with partners they would never have connected with even a quarter earlier. These partners usually are smaller specialists with dedicated knowledge and expertise and the partnerships initially tend to be concerned with educating the company on the new technology. Later, the company has to decide if the new technology is sufficiently critical to build up expertise inside the organization or if a strategic partnership suffices. Still, new partners disrupt the existing ecosystem as the new technology also affects the existing products, subsystems and functionalities.