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Brain Circuits
So, you think you’ve built an ecosystem…
Many organizations think they have created an ecosystem, but fall well short. Answer the questions below to check whether your “ecosystem” is sustainable in the long term.
Which of the following characterizes your current operation?
- Value is designed and delivered within the organization.
- All value flows through the center of the business.
- Full vertical integration, with tight control of supply chain and partner network.
- The operation is designed to eliminate complexity.
- We have freed ourselves from dependency on our partners.
Here’s the big reveal: if these features characterize the business, you do not have an ecosystem: you have simply added bolt-ons to your old business strategy.
What an ecosystem really looks like
Ecosystems provide the opportunity to regain speed, access capabilities beyond the firm, and respond to markets that no longer respect industry boundaries. However, they are easy to misunderstand and deceptively hard to lead – which is why most fail. In fact, according to research by the BCG Henderson Institute, fewer than 15% of business ecosystems are sustainable in the long term.
This is because strategies built around vertical integration, where firms seek to control more of their supply chains, are time-consuming and capital-intensive, while purely transactional partnerships lack the depth or flexibility to solve complex, interdependent problems. And while platform investments may improve efficiency, they do not necessarily change how decisions are made. By contrast, ecosystem thinking starts from the reality that value creation is already distributed.
The following features characterize a true ecosystem:
- independent actors can create value with one another, not only through you
- shared standards, data, or platforms allow partners to combine capabilities in new ways
- innovation emerges from interaction, not just from centrally designed offerings
- governance focuses on alignment and rules of engagement, rather than detailed control
- value creation is distributed, even if value capture is not equal
- every party captures relevant value.
How strategy changes in an ecosystem
Key learnings
Competitive advantage increasingly depends not only on what a firm owns but on the quality of its connections. Value is created through complementarities, network effects, and shared infrastructure that no single organization fully controls. An ecosystem built for dominance will not look like one built for coordination, and one designed for rapid scale will not resemble one built for systemic resilience. Confuse those objectives and what emerges is not an ecosystem, but a compromise that satisfies no one.
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