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Digital ecosystems – any thoughts?

07/25/2017 1:00 pm

Jim sent me an email last week saying: 'I am doing a webinar on ecosystems and with all the hoopla on digital ecosystems in HBR recently I think there is a possible org design perspective on this.'

He went on to mention alliance management functions, ecosystems of the future, and centralized/decentralized models. Finishing with the challenge 'Any thoughts?' So, here goes:

Beginning with the 'eco'. Ecosystems has recently entered the common language of business – to such an extent that it's in the top three management buzzwords of 2016.

Before it was a business word it was an ecologist's word and in that literature, there are many definitions on what ecosystems 'are'. A simple definition, from National Geographic is: An ecosystem is a geographic area where plants, animals, and other organisms, as well as weather and landscape, work together to form a bubble of life. Ecosystems contain biotic or living, parts, as well as abiotic factors, or non-living parts. Every factor in an ecosystem depends on every other factor, either directly or indirectly.

More detailed ecosystem definitions include concepts of pattern formation, self-organization, coevolution and co-existence between organisms and their environments, interaction across multiple scales of space, time, and complexity, and feedback loops.

Similarly, there are various definitions of digital ecosystem. Gartner's is: 'A digital ecosystem is an interdependent group of enterprises, people and/or things that share standardized digital platforms for a mutually beneficial purpose (such as commercial gain, innovation or common interest). Digital ecosystems enable you to interact with customers, partners, adjacent industries -— even your competition.' This definition is closest to the business ecosystem discussed in an article on three types of economic ecosystems (business, innovation, and knowledge).

Having got this far I paused. Earlier in the week I'd watched an Adam Grant TED talk in which he asserts that procrastination is an aid to thinking. That helped me feel ok watching a programme on Scottish and Icelandic seabirds around the Shiant Isles. It turned out to be about ecosystems. And all is not well. 'Overfishing, global warming disturbing the ocean food webs, pollution and the introduction of rodents and other animals to breeding places are ushering in an apocalypse. Some scientists estimate that by the end of this century most of the world's seabirds will have disappeared'. The Shiant Isles seabirds are part of this story.

The players (in the jargon – 'agents') and stakeholders in this seabird ecosystem are many, and interconnected. They have differing power positions and differing interests it. Most of the players are voiceless and many are powerless to protect themselves. It's an unsettling narrative that we should bear in mind when designing our digital ecosystems.

Having said that, there's a lot about designing digital ecosystems that make it sound do-able and relatively easy because basically you're designing a digital platform that you own and others use. There are some commonly cited leaders in the field: Danske Bank, Amazon, Philips Healthcare, and Fiat are among them. They have reportedly 'designed' digital ecosystems each based on a common platform.

But let's not get too excited or jump in designing them without pause for thoughts – here are my five:

1. Digital ecosystems are complex interacting and interlocking networks. In designing one how do we answer questions like: what are its boundaries? Whose perspective are we looking at designing it for and from? Where will the power lie in it? Is it controllable? If you apply these questions to the seabird analogy you start to see the complexity of the interactions.

2. The notion that digital ecosystems are 'beneficial' or add 'value' – as the definition says – is an assumption worth challenging. (Think seabirds again). Is it possible to design a digital ecosystem that is beneficial to all participants? Amazon, Google, Uber, Airbnb, are examples of companies known for their digital ecosystems some of the participants/agents in them – governments, regulators, and in some cases their workforce – are suggesting they are not beneficial. In designing digital ecosystems what discussions are we having about the value and benefit they bring?

3. Having 'designed' the digital platform it is not possible to control its ecosystem. Once functioning it is continually adapting at a cellular/local level. In the seabird example, small colonies of gannets adapted their behaviours. In organizational terms, call centre agents, for example, develop work-arounds and adapt their behaviour in response to something happening in their environment (IT outages, new policy, etc). In digital ecosystems people hack-in, developers tweak bits, or interfaces fail … (See The Digital Ecosystem Paradox – Learning to Move to Better Digital Design Outcomes for more on this).

4. Designing beyond the digital platform towards an ecosystem involves maintaining the ecosystem's capability to thrive over time. It involves long-term pattern watching using AI, big data, and extremely good interpretive analytics. If we see failures or the equivalent of 'poor health' then, it means trying out thoughtful adjustments. (Remembering that any adjustment will have consequences elsewhere in the ecosystem.) Organizational leaders tend to be poor at watching patterns over time. They are more interested in 'snapshots', or events with causes, so pattern watching may need different leadership skills.

5. The idea of 'pattern watching' supposes that we know the boundaries within which we are watching. In seabird terms are we looking just at the puffin ecosystem and its agents, or the seabird population of the Shiants, or the wider seabird population or …? Does the pattern within the boundary matter more, from a design perspective, than the interactions and overlaps of patterns across ecosystem boundaries? Perhaps there are numerous citizens who are simultaneously a participant/agent/customer in Danske Bank, Amazon, Philips healthcare, and Fiat – what useful patterns would be revealed looking across these individual ecosystems that aren't revealed by looking within them.

How would you respond to Jim's email? Let me know.

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