The Other Yellowstone Ecosystem

Just as natural resource-based bio-ecosystems operate in a complex natural balance, business ecosystems require deliberate, conscious management and shepherding of their resources to thrive.

Ecosystem strategy and tactics

By Greg Ruff WHITE SPACE STRATEGY

In a natural ecosystem, new species emerge as a result of evolution and migration, and the roles of predator and prey change as food chains evolve to adapt to resource and climate conditions. Evolution occurs as if guided by a strategy focused on the survival of the ecosystem itself.

Business ecosystems, on the other hand, have the ability to guide and grow both the ecosystem and its resources. They have the ability to communicate, collaborate, compete and establish strategies to guide their own evolution. The business ecosystem can make choices to guide its growth.

Establishing the overall strategy for a business ecosystem involves choices including target markets, value propositions and how the ecosystem will collaborate. Even the primary resource, the ecosystem’s customers, can be deliberately increased or changed by focusing on new target market segments and new needs.

However, many business ecosystems operate much like bio-ecosystems, leaving the evolution of the business ecosystem to chance. They rarely manage to expand beyond their initial size and resource base, and become competitive predator and prey ecosystems, with species trading dominant roles, but not expanding the overall ecosystem wealth.

The process of deliberately establishing an ecosystem strategy involves answering a few basic questions that lead to success:

• Who is the target customer for the ecosystem?
• What is it they need? (What is the “job” they’re trying to accomplish, and where do they have problems?)
• What category of product or service does the ecosystem belong to? (How do customers find it in a category they’re familiar with?)
• What is the value proposition of the ecosystem? (What value does the ecosystem propose to deliver?)
• Who are the two or three key competitors? (What is the competing product or service?)
• What are the ecosystem’s key differentiators? (What is the its key differentiating value that sets it apart from the competition in customer valued ways.)

The answers to these five basic questions form the core of an ecosystem strategy that can be expressed very succinctly:
• For [target customers] • Who need [to accomplish a job] • Our [ecosystem category] • Provides [the value proposition] • Unlike [key competitors] • We provide [differentiating value] By expressing the strategy in a simple phrase format, it becomes easy for all the business ecosystem members to understand and express it as a guideline for everything from business plans and tactics to messaging and advertising.

Once the strategy has been clarified and communicated, the ecosystem members can move on to define the tactics that will implement it and make it real – the subject of my next article.

Greg Ruff has consulted to Fortune 500 companies and startup businesses on management, market and growth strategies since 1987. He first visited Big Sky in 1993 and recently relocated here. In this column, he writes about how business- and bio-ecosystems can mutually benefit from creative thinking.