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What do you call an ecosystem in which you always see your company as a central player?
An ego system. So we come to labels like the âGoogle ecosystemâ, the âFacebook ecosystemâ, the âinsert your name here ecosystemâ. These labels seem impressive at first glance, but they undermine an important truth: ecosystem strategy is alignment strategy.
The definition of ecosystems around companies blinds everyone involved to alignment barriers and limits their ability to develop suitable strategies. Adopting centrality makes it harder to build the relationships necessary to achieve their goals: ecosystem leaders find it harder to develop strategies that will attract followers, and ecosystem partners find it harder to know which leaders they are following and where they are to place their bets.
Apple offers a stark example. The World’s Most Valuable Company has been hugely successful in expanding the mobile data device ecosystem it manages – from iPod to iPhone to iPad to Apple Watch, surrounded by its App Store and iOS platforms. But it has been shockingly disappointing in his efforts to expand into new businesses that require new ecosystems to be built. Apple’s failure to deliver on ambitious promises – that health care would be “the company’s greatest contribution to humanity”; that the HomePod would “reinvent home audio”; that its educational platform would “enhance learning and creativity in ways that only Apple can” – are obscured by the profits pouring out of its core ecosystem, but failures nonetheless.1 The consequences of these failures are not borne solely by Apple , but also from all companies that have joined these efforts in a complementary manner.
If successfully aligning partners and other participants in new ecosystems is a challenge for a company as sophisticated as Apple, a giant at the height of its power, then (1) no would-be leader should believe they are successful in one Ecosystem will, of course, be reflected in leadership elsewhere, and (2) no would-be complementor should assume that following established leaders into new areas is a safe bet.
How can all ecosystem players do it better? They can anchor their idea of ââecosystems in the value proposition they pursue, not in their corporate identity.
1. L. Gurdus, “Tim Cook: Appleâs biggest contribution will be âhealthâ“CNBC, Jan. 8, 2019, www.cnbc.com; D. staples, “Apple is reinventing home audio with the HomePodâ, DJ, June 9, 2017, https://djmag.com; and “Apple introduces anyone can create a curriculum to spark student creativityâApple, March 27, 2018, www.apple.com.
2. R. Adner, “Ecosystem as a structure: an implementable construct for the strategy“, Journal of Management 43, No. 1 (November 2016): 39-58.
3. D. Blumenthal, “Stimulation the Adoption of Healthcare Information Technology,” New England Journal of Medicine 360, no. 15 (April 2009): 1477-1479.