STORY INLINE POST
The growth of companies today requires new sources of value creation and generation of competitive advantage. Additionally, with the great digitization of services and high scalability by emerging technology-based companies, which cause rapid adoption by users and consumers, traditional companies need to face the challenges of growth by identifying and developing new mechanisms that provide innovative, fresh and attractive solutions for end consumers.
In this way, exploring new businesses while continuing to exploit the traditional business becomes not only a survival mechanism, but practically mandatory for any traditional company. However, these new businesses and even traditional businesses cannot ignore the drivers that are generating the change in the pace of competition in each industry.
Emerging technologies and the design of new business models undoubtedly facilitate the disruption of many industries. But unlike in the past, where large companies internally developed what they needed or created clusters for the development of components, which were later assembled to immediately bring them to the market, today, that is not enough. Today, the market demands a high specialization in knowledge and also a greater focus to understand the consumer, including not only their tastes and preferences, but also their most intimate unconscious emotions and desires. And all of this at a much faster speed.
Companies that continue to work in silos run the risk of disappearing faster due to the lack of innovation in their products or services, the low capacity to connect emotionally with the consumer and, obviously, the low capacity for technological development.
Innovation Ecosystems to Leverage Corporate Growth
In recent years, innovation ecosystems have facilitated the emergence of many emerging technology-based companies, surrounded by investment funds, universities, mentors, entrepreneurs, and governments that promote initiatives for economic development. Within these ecosystems, each one of these actors has a role as a participant where resources and capacities complement each other, but at the same time all of them win because there is a mutual benefit in the relationships developed between the parties.
Many corporations are approaching these ecosystems, although the more mature companies realize that on many occasions, local or regional ecosystems are not enough to complement the necessary capabilities to solve growth challenges. For this reason, they extend their relationships and investments toward global ecosystems.
Such is the need to create ecosystems that in the case of the banking and financial services sector, a whole work philosophy, interconnection of actors and regulations have been developed around the integration of technological and business solutions to provide services and products that are more consistent to the needs of customers. It is called open banking.
Open banking is the creation of ecosystems that allow embedding solutions, products and services through service channels called microservices that are integrated via Application Program Interfaces (APIs) that facilitate the emergence of new providers and allies in the financial ecosystem, where new forms of collaboration between traditional banks, fintech companies, and technology providers are integrated and allow technological and business combinations, which are mainly ruled by the regulatory entities of the financial system to avoid or reduce as far as possible fraud and the use of misinformation while enhancing customer protection.
There are other ecosystems that facilitate the production of new foods, medicines, logistics services, electronic commerce, and a whole new world of innovative solutions and products that transform the lives of consumers, generating in turn the transformation of industries and therefore of the companies that they form.
I have had the opportunity to meet and interact with different ecosystems around the world and this has allowed me to learn several lessons that today serve as a guide for many companies that want to continue growing.
Define a clear growth purpose and objective – Participating in an innovation ecosystem is a matter of survival, growth and differentiation for companies. Therefore, establishing clear and measurable objectives that impact the growth of the organization is mandatory: economic, markets, customer segments, products or services, technologies, channels, among others.
Establish a road map and an action plan to impact the growth of the organization – Design a step by step growth plan and the sequence of phases that you will follow to meet the goals set. Prepare the set of tasks, resources (tangible and intangible) necessary to achieve it, since it is partly the purpose of joining the ecosystem.
Identify the areas where complementary resources are required – The need for resources is not only to complement technologies, but also serves to attract other resources, such as agile methodologies for innovation, human resources, knowledge, processes and even capital for investment. For example, Venture Capital funds would be encouraged to co-invest with a corporate to develop startups.
Create relationship mechanisms with the various actors – You are not going to relate to all the actors in the ecosystem in the same way. Some will serve as a link to connect with other actors, but you will have a wide range of possibilities, including identifying new suppliers, strategic allies, opportunities to create joint ventures or even investments or M&As. Therefore, it is important that from the beginning you are clear about the growth objective.
Connect with the appropriate ecosystems to strengthen complementarity – Not all ecosystems are developed in the same way, a lot depends on their capacities, their growth philosophy, structure, among other factors. Therefore, integrating into various ecosystems in the world is the most appropriate path.
Fail fast and learn intelligently – Not all relationships will be the most appropriate since they depend on several factors that you must learn, such as: the technology life cycle and the speed of adoption of the business model, among others.
Establish long-term relationships – Long-term commitments to the ecosystem generate greater benefits, since it makes it easier to identify better opportunities to cope with growth challenges. Additionally, ecosystems also evolve and strengthen, attracting increasingly robust solutions.
Integrate solutions that generate value – The right relationships will generate impact and above all value to the needs of the organization.
Measure the effect and impact of your decisions – Establish metrics to measure the effect and impact of relationships in the ecosystem and mainly in the contribution to the growth objectives of the organization.
Evolve at the speed of light – This is an ongoing process that matures over time, but technology moves so fast today that organizations must constantly evolve.
Luis Hernández Alburquerque is an expert leader in Corporate Venturing and Corporate Venture Capital (CVC) focused on transforming mindsets to build growing organizations based on innovation, technology and venture investments.