Value Ecosystems

People and businesses are immersed in an environment that can be described by the acronym BRIGHT (Blurry, Risky, Interconnected, Global, High-tech, and Timely). To cope with this environment and deal with a multitude of assumptions and constraints, it is paramount to create operational excellence, lean processes, develop dynamic and scalable capabilities, invest in data-based decisions, and apply effective leadership. But most of all, create a real value-driven collaboration, sustained by a truly non-self-centric purpose. 

The word ecosystem is now universally incorporated in our lives and businesses as we all trying to optimize resources, minimize risks and maximize the value creation flow for a myriad of stakeholders, which are each day more quality and rewarding experiences demanding, and less tolerant with schedule overruns. 

A Value Ecosystem can be thought of as a web of interdependent entities (people and organizations) that through the collaboration of their resources, assets or competencies can foster mutual growth and long-lasting benefits for everyone. 

Value Ecosystems exist because participants perceive and recognize they can create more value within the ecosystem than acting independently. Also, to create an effective Value Ecosystem, participants must identify and share common purposes or objectives.

In the context of a Value Ecosystem, there are three important questions a participant must answer: (i) what are my needs and gaps? (ii) how can I contribute to creating value for the whole ecosystem? and (iii) what value can I capture from the ecosystem? Participants can contribute in a variety of ways as well as can capture a lot of different values. Both the contribution and the capture of value can be made directly or indirectly.

Value Ecosystems differ from Value Chains and it is important to understand the differences to take advantage of the best from what both have to offer. While in Value Chains the value creation is incremental, additive, and sequential, in a Value Ecosystem value is created and captured in a dynamic, non-linear, and networked process.

It is possible to categorize Value Ecosystems in three dimensions: as to their structure, coverage, and benefited. In relation to the structure, there are two types of Value Ecosystems: hierarchical and non-hierarchical. In hierarchical Value Ecosystems, there are some major participants that control and organize the whole process and also small participants that contribute with something and take advantage of what major participants may facilitate. Conversely, in non-hierarchical Value Ecosystems, there is no interest on the part of the participants to establish a dominant power among them, since all participants recognize their importance for the ecosystem as a whole. 

Regarding the coverage, Value Ecosystems can be internal and external. An internal ecosystem occurs when all participants are part of one single organization and different sectors or departments work together for the benefit of the whole. In external ecosystems, two or more organizations, people, or groups of people interact for their common interests. 

Finally, we have the beneficiary’s dimension that clarifies who will capture the value created by the ecosystem, which can be the ecosystem′s participants only or someone or an organization outside the ecosystem. The first case occurs when the participants get together to create mutual value. The second situation happens when an ecosystem is created in favor of someone or an organization. The participants have no interest in capturing any value for themselves, on the contrary, the purpose, the focus, or the goal is to beneficiate someone or an organization outside the ecosystem. 

The FLEKS Hybrid Model (www.fleksmodel.com) is an organizational management approach that aims to provide support for the implementation of a structure, processes, techniques, and tools which allow for fast adaptation to market and environment changes, creating a continuous and sustainable value flow for stakeholders through hybridly managed initiatives.

The heart of the FLEKS Hybrid Model is the Value Management Offices (VMO), which is a strategic structure responsible for the value governance and defining the right balance between the organization's interests, its stakeholders, and initiatives, such as projects and products. The main goal of a VMO is to maximize the value created by the organization and minimize its risk level, and this complex task is highly facilitated by the creation of Value Ecosystems, within or outside the organization.

Differently from a traditional PMO (Project Management Office) the VMO, as conceived by the FLEKS Hybrid Model, is in charge not only for the projects and operational processes that support a Value Chain but also by the organizational Value Ecosystem, which is a more comprehensive view of how the organization can create internal ecosystems or collaborate for broader external ones and how it can benefit from them.

To effectively implement the FLEKS Hybrid Model, and ultimately profitable Value Ecosystems, a VMO Manager must bear in mind some highly recommended actions:

·       Encourage a Value Ecosystem mindset throughout the whole organization.

·       Discover which are the links of interdependencies that will create the most advantageous ecosystems.

·       Establish flexible processes, capabilities, and tools to allow a quick adaptation to scenario changes.

·       Define metrics to assess the results obtained from its ecosystems.

·       Create open communication channels to provide transparency and ease the decision-making process.

·       Develop an empathetic, collaborative and co-responsible culture.

As a result, in a BRIGHT world, organizations should seriously think about their Value Ecosystems not only to grow but to materialize their purposes and accomplish their mission, causing relevant social, economic, and environmental impacts.