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Adaptive Innovation Ecosystem Strategy

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When new technologies and competitors disrupt markets, numerous organizations struggle to keep up using arcane Business Models, strategies, technologies, and practices.  Most likely reason is that they are inadequately prepared to develop new products and services amidst uncertainty.

Situations like this stimulate some organizations to partner with others.  Fruitful partnerships comprise of having the appropriate people, processes, and organizational backing—in other words a whole ecosystem.

Partnering with complementary organizations in order to create an Innovation Ecosystem radically improves an organization’s competitive or technological strength.

Setting up the correct type of Innovation Ecosystem is key in order to guarantee success and to detect and manage sources of conflict.

The Centralized Innovation Ecosystem is the most commonly used system across the globe.  Key characteristics of this Innovation ecosystem include company acting as a Broker or Hub, creating separate relationships with each involved entity, entities involved not interacting with each other directly rather via the Broker.

Centralized Ecosystem Strategy hinges on containing precise, distinct problems and solutions.  It is successful in mature industries.

In many situations, the conventional approach for Innovation Ecosystem Strategy development does not work.

The Adaptive Innovation Ecosystem is suited better for environments where requirements are fuzzy or industries are still maturing and need collaborations.  Adaptive Innovation Ecosystem has the company acting as an Orchestrator, connecting entities that work together directly.

Adaptive Ecosystem Strategies are appropriate for circumstances where the problem and the solution are indeterminate or still being categorized. 

Research on how companies create value from partnerships and Innovation Ecosystems has been on-going for more than 15 years.  Findings of this revolutionary research suggest that implementing an Adaptive Ecosystem Strategy necessitates utilizing the following 6-phase approach.

  1. Define the area of exploration.
  2. Find and attract the right partners.
  3. Connect uncommon partners.
  4. Connect the partners into an ecosystem.
  5. Leverage opportunities to transform.
  6. Allow partnerships to be flexible.

Let us delve a little deeper into details of the first 3 phases of this approach.

Define the Area of Exploration

Adaptive Innovation Ecosystems are deployed where the environment is ambiguous.  It is, therefore, logical that the first step in an Adaptive Ecosystem Strategy should be to define the area that needs exploration.

After defining the area to explore, the problem can be analyzed in detail and refined, as comprehension regarding the prospect evolves.

Find and Attract the Right Partners

In order to develop an Adaptive Innovation Ecosystem, it may be necessary for the Orchestrator to look beyond its industry to find partners.  It may have to use unconventional ways of attracting them.

Experience has shown that partnering with uncommon entities have resulted in some of the most effective Adaptive Innovation Ecosystems Strategies.

Partnering entities are, at times, on the outer fringes of the industry or even outside the industry in which the said company operates.  Challenge in this phase is ascertaining the competences needed for Innovation.

Connect Uncommon Partners

Centralized Innovation Ecosystems often operate on the basis that keeps partners separate from one another.  Effectiveness of Adaptive Innovation Ecosystems is contingent on direct collaboration among partners.  Orchestrators play the part of bringing these uncommon partners together.  Bringing together uncommon partners can be demanding as many of the partners have never worked with one another.  Also, there are few models for such collaboration.

Companies that have worked in Adaptive Ecosystems have come to the conclusion that, intrinsically, group effort do not go along a fixed pattern.

Interested in learning more about all the phases of Adaptive Innovation Ecosystem Strategy development?  You can download an editable PowerPoint on Adaptive Innovation Ecosystem Strategy here on the Flevy documents marketplace.

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Innovative business models can reshape industries and drive tremendous growth. However, many organization find business model innovation difficult. The framework outlined in this presentation is based on the HBR article "Reinventing Your Business Model," authored by Clayton Christensen, [read more]

Want to Achieve Excellence in Innovation Management?

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To be competitive and sustain growth, we need to constantly develop new products, services, processes, technologies, and business models. In other words, we need to constantly innovate.

Ironically, the more we grow, the harder it becomes to innovate. Large organizations tend to be far better executors than they are innovators. To effectively manage the Innovation process, we need to master both the art and science of Innovation. Only then can we leverage Innovation as a Competitive Advantage, instead of viewing Innovation as a potential disruptive threat.

Learn about our Innovation Management Best Practice Frameworks here.

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About Mark Bridges

Mark Bridges is a Senior Director of Strategy at Flevy. Flevy is your go-to resource for best practices in business management, covering management topics from Strategic Planning to Operational Excellence to Digital Transformation (view full list here). Learn how the Fortune 100 and global consulting firms do it. Improve the growth and efficiency of your organization by leveraging Flevy's library of best practice methodologies and templates. Prior to Flevy, Mark worked as an Associate at McKinsey & Co. and holds an MBA from the Booth School of Business at the University of Chicago. You can connect with Mark on LinkedIn here.

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