Modern Innovation Involves a Dual Ecosystem Strategy

Being faced with disruption and increasing pace of change, many established companies fail to keep up. They often turn out to be ill-prepared to innovate under uncertain and time-critical conditions. Rather than going it alone, some companies reach out to suitable partners with the aim to build up innovation ecosystems that complement the companies’ capabilities, competences and strategies. A decisive question is: What types of ecosystems will work best in particular innovation environments?

Latest research indicates that requirements for an adequate partnership ecosystem hinge on the specific innovation scope on hand. Companies are well-advised to choose a dual strategy, splitting up into

• Centralized Ecosystem (Broker) approach for incremental innovation, optimizing and exploiting existing business models or technologies
• Adaptive Ecosystem (Orchestrator) approach for radical or disruptive innovation, exploring new-to-company business models or technologies
• Blended approach for reshaping / transforming the core business through Adapt and Scale activities

Table: Centralized vs. Adaptive Ecosystems (from Building the Right Ecosystem for Innovation by N. Furr and A. Shipilov, MIT SMR 2018)

Companies engaging in ecosystem strategies are building collaboration and partnership capabilities that will serve them well over the life cycles of their respective core businesses. Beyond that, discovering and leveraging new forms of value in collaboration with unfamiliar partners is likely to bring forth new opportunities and extend a company’s life span.

Read the entire post at Integrative Innovation.