Ecosystems in business – cut your costs, raise your success (part I)

Intel does them well. eBay/Skype isn’t so bad at it. WordPress knows how to knacker this about. What is it? Its organizational ecosystems. Organizational ecosystems are amazing entities that can help you reach your goals as a company or organization more easily. They help to reduce your costs and allow for more entrepreneurial and independent thinking for an area that might otherwise be dominated by a single company vision.

Let’s define what an ecosystem is though first. An ecosystem, according to the University of Illinois Department of Natural Resources is:

An ecosystem is an interacting system of plants, animals and humans and their surrounding physical environment. An ecosystem contains living and non-living organisms that each provide or contribute to a unique service or function that other organisms depend upon.

Sounds simple enough (if you’re an gnat or perhaps a wallaby) doesn’t it? Now let’s apply it to organizations:

An ecosystem is an interacting system of companies, consultants, and educational institutions in their surrounding economic environment. An ecosystem contains for profit and non-profit organizations that each provide or contribute to a unique service or technology conceptthat other organizations come to rely on.

So an ecosystem of companies makes it possible for multiple companies or organizations to effectively work together to meet their own individual goals while insuring that a larger goal is achieved – which in turn helps everyone as well. Such co-working makes it possible for a tide of sorts to rise bringing with it each company. Oh, and if the larger goal that is across the different companies or organizations is not met, guess what? No one succeeds individually either. See figure for a layout of what I’m getting at here:

Now you might be thinking, “isn’t this like what the chamber of commerce does when I join it or another professional organization?” Not really. Those organizations generally promote a concept known as networking and they help to insure that a profession is viewed well at large. That’s a good thing for sure, but it’s not the same as an ecosystem.

You also might be thinking, “Didn’t Joseph Stalin dream something like this up?” No, not exactly. Socialism infers a central control by a government. An ecosystem is a banding together of independent companies for their own self-interest and the greater interest of the group involved – since both are intertwined.

A good example of an ecosystem in technology is the VME market. VME stands for Versa Module European and is a long standing modular computing architecture for a wide variety of applications such as communications, industrial, and military/aerospace. VME has been alive for 25 years and show no sign of losing its usefulness. Using our definition of an ecosystem above, VME as a technology is the rising tide and approximately 240 companies encourage that market to grow. As each company works to promote the market, contribute to the technology, and work to see it grow, each company in turn is promoting its own agenda so that it too can be successful in its own right.

In practical terms it means that there is a trade association (known as VITA) that each member of this ecosystem supports that insures the technology continues and is promoted for it’s own sake – not to meet any one particular company’s objectives. Each company however moves toward it’s own goals with the technology as they see fit.

Another example is in the area of cooperatives, such as cranberry growers. In this scenario, such as with Ocean Spray, each individual cranberry farmer can’t really be successful by themselves. They have a great product (cranberries) but what do people do with them? Eating a handful of cranberries is not on most people’s list of culinary delights. Ocean Spray answers that issue though, promoting cranberries, processing them for bottling in juices and other edibles, and generally making it possible for you and I to enjoy something we might not otherwise be able to. This in turn makes a small segment of the farming industry sustainable.

So how does one create an ecosystem, and why should you and should you at all? We’ll have to pour another cup of cocoa for that one and cover that in part II.