A New Center of Gravity

When it comes to commercial model innovation, it's better to think in terms of gravitational pull, a new "universe" that rotates around the concepts of 'shared marketspace' and value alignment.

“Ecosystems" are economic systems with the power to reset how an entire market works; or they become a channel themselves, white space to enable new categories of products and services that are native to the new system. The process knowledge to construct and sustain industry ecosystems -- to intentionally design a system advantage -- is a new skill for brand, creative and technical management across business and government, worldwide. Less ‘out there’ already than intentionally organized, they basically answer five questions: Where does growth come from? Where do markets come from? How do you understand them? How do you manage them? And then how do you sustain them?

Market Innovation

Markets aren’t about “efficiency” — they’re about power and control. And market innovation is the deliberate process of finding and positioning power, of inventing leverage in an organized and persistent way. The end state is/are a new economic system (“ecosystem”) that becomes a control point, a way to displace an embedded economic network.

Your operating environment has changed radically.

Atomizing customer segments, an unrelenting flood of product promotion and fragmented service options, infinite media channels, hyper-commoditization, new government regulations and the exponential rate of growth of technological change have made market strategy more complex to define, more costly to implement, and less effective for all industries. The traditional calculus is obsolete. That comfortable mental furniture used as the centerpiece of brand management — the principles of branding, awareness, positioning, message, share of voice, and customer loyalty — is now coming apart at the seams, unable to accommodate the seismic instability in your strategic landscape.

Responding requires a new logic, a different operating theory for how the world works.

‘Strategic fit’ to this total change in context will take major shifts in thinking about nearly every aspect of strategy, structure, and tactical mix investments. But shift to what? Answering that big question can only come from a conversation that pushes the premise of strategy itself into a new orbit for imagination.

Ecosystems are a unique frame of reference, more of a biological orientation to create leverage and strategies for displacement. The roadmap starts with vision to intentionally design a system of markets to act as a single organism, and then draw innovative power from their connectivity. Ecosystem-centered market strategy is characterized by:

• System Entrepreneurship. Ecosystem-centered strategy is about combining ‘sets of markets’ to build new economic systems. Instead of market fragments acting in isolation from each other, ecosystems enable new possibilities to achieve objectives defined in terms of ‘system value’.

• A New Paradigm in Persuasion. By moving away from the sterile marketing parlance of brands and branding, ecosystems provide new metaphors, orientations, language, and ideas — a whole new taxonomy — to see and solve issues of ‘value alignment’ with the business and technology agendas of customers.

• A Different Innovation Agenda. Ecosystems enable ‘computational imagination’ in the space between healthcare and the pharmaceutical industry. By connecting market fragments in new combinations, complex problems beyond the abilities of individual markets are solvable, and new capabilities are acquired.

• High Leverage. Ecosystems are high-leverage. Rather than trying to squeeze more life out of worn-out paradigms, ecosystems transcend the “control points” and feedback loops keeping incumbents in power and the status quo alive, creating the conditions to enable market innovation, strategic transformation and new storylines of value.