Ecosystems | Business for the Human Condition

The immense success of companies like Amazon, Uber, and Airbnb demonstrate continual improvement of the human condition. These organizations explore and exploit gaps in society which allow others to do what people do best: provide value to each other. Their successes have given rise to the incorporation of concepts such as Digital Business Platforms and Ecosystems. These approaches are moving main-stream as technology becomes ever more democratized. Leveraging these notions require organizations to consider more than technology; they require explicit consideration of the human condition. This series focuses on concepts of ecosystems, people-networks, and co-creation as a means to build value for others and contribute to the betterment of the human condition.

WB3 Tech | Blog
WB3 Tech | Blog

The Human Condition

Ethereal and esoteric, that may be what one thinks when they hear about the human condition. What do I mean when referring to the human condition? The human condition is all aspects of human being. It is everything between birth and death; ours experiences in pursuit of life. This condition is characterized by how we develop individually and among others.

Maslow’s hierarchy of needs best describes the pursuit of life. He presents a theory on human motivation based upon thirteen (13) assertions of why people do-what-they-do. Maslow asserts the bedrock of human motivation is the drive for wholeness. We are driven to wholeness not only by motivation itself, but constraints on biology, situation and culture. Ultimately we progress, or regress, through six (6) stages of growth: Physiological, Safety, Belonging & Love, Esteem, & Self-Actualization. These growth-stages are determining factors in the human condition because describe the motivations for humans’ being at any given time.

Wholeness is achieved as we progress through growth phases. Progression is the path an individual takes in-order to maintain a constant and normal state. When a state is disrupted by either external forces or intrinsic curiosity, humans adopt a way of being which drives them to re-establish their previous state or a new normal. Such a process epitomizes the human condition.

Technology gives us a medium to explore and exploit approaches to wholeness. Technology at its core reduces the friction of interactions. Communications and their responses more effectively or efficiently achieved as technology is applied. Organizations like Amazon, Uber, and Airbnb have demonstrated successful outcomes by promoting the human condition thorough co-creation, thus providing possibilities for individuals to achieve wholeness. Technology is core to the human condition.

Disruption and Cooperation go Hand-in-Hand

Axway - Turn Up To 10

Disruption and Innovation are two highly over-used words.  I should know, I used them like currency for the longest time.  Both words elicit the emotions of dominance and competition, something that drives Type-A personalities like me. In college, my past time was amateur MMA. There is nothing more engaging than the big “clink” of the gate to a 32 ft. chain link fenced octagon to signal the beginning of a Mano A Mano -a 9 minute effort to disrupt each other.  But it’s my recent efforts in the world of small-to-medium sized enterprises that has taught me the true meaning of these words.  This reflection happened as part of my recent work in designing digital business ecosystems; disruption is not about competition, is about cooperation.

For those of you who use the term disruption or disruptive innovation, I encourage you to put those phrases on the shelf until you have read “The Innovators Dilemma” by Clayton Christensen. The book describes how many people have taken the idea of disruption and used it to exemplify some type of company-to-company-cowboy-rockstar-approach to knocking the proverbial stuffing out of each other; like it’s some type of corporate MMA match.  That couldn’t be further from the truth, why?  The core concept of disruption is not company centric; it’s customer centric.  Disruptive innovation is not a thing you do, it’s an outcome. It’s validation of a new value proposition that creates a new market or value network, which in turn, disrupts an existing value network or market by replacing established market leaders.

Companies don’t start out being disruptive, they start out experimenting with new products for markets, which may (or may not) grow into something big.  When these products, or services, grow big enough to upend established market leaders, the company has demonstrated an ability to disrupt.  When starting down the new value prop road, the best thing to do is build an ecosystem And by building an ecosystem, I mean collaboration.

Collaboration is a loaded word.  How many times a day do you hear it?  “We should be more collaborative,” or “great collaboration.”  The word collaboration has become idiomatic, and given its context, either means “You could be doing a better job” or “Thank You.”   What does it really mean in practice?  Let’s change our vocabulary from this point forward; it isn’t about collaboration, but co-creation.

Building an ecosystem is a co-creational effort which exponentially delivers value to those who live within it.  Ecosystems allow for value creation simply because they broaden the ability to explore and exploit useful value propositions.  This characteristic is of great importance when thinking in terms of today’s digital business.  Digital technology reduces communication friction which allows for the building of larger, more specific, and highly valued ecosystems through co-creation.  Digital ecosystems, by their very nature, allow for quick identification and experimentation of value among early markets.  Ecosystem co-creational efforts generate quick customer-centric feedback. Said another way, digital business ecosystems are low-friction mechanisms to explore and exploit new value propositions using co-creational tactics.

Swift customer feedback, appropriate, rapid assessments, and concise action is the precursor for innovation.  Innovation is customer adoption of new value propositions.  Disruption is when the adoption grow such that the innovation up-ends current market leaders.  The questions we should be asking ourselves are how do we co-create?  How to we facilitate an ecosystem of value discovery and delivery?  How do we co-create such that we are awarded the honorable badge of disruptor by our customers?

Scale Up = Conscious Design

You did it!  Not only did you go from Zero to One, you are a cash flowing and value delivering machine; it’s time to Scale-Up.  What does it mean to Scale-Up?  Scaling up equals Enterprise Architecture.

Enterprise Architecture, ’dem is some big-o-words.  If you are already feeling the fear, just keep reading.  Let’s get our heads around this Enterprise Architecture thingy-ma-bob by taking it word for word.

Enterprise, what is an enterprise? I bet you just thought “It’s a space ship!” Yes, it is a space ship, the USS Enterprise is an enterprise.  Let us play on this for a second.  An enterprise is a group of organizations aligned to achieve the same mission.  The USS Enterprise has many organizations: Commanders, Medical Staff and Engineers to name a few.  Each organization works in unison to complete a single mission, “to explore strange new worlds, to seek out new life and new civilizations, to boldly go where no man has gone before.”

Create

Architecture, what is architecture?

If you’re like me, pictures of glass-and-steel behemoths, old world Europe, or skyscrapers come to mind.  All of those are beholden to architecture, so how do you define architecture when it isn’t brick, wood or steel?  I subscribe to the definition put forth by the IEEE.  Architecture is the “fundamental concepts or properties of a system in its environment embodied in its elements, relationships, and in the principles of its design and evolution.”  There are three key take aways: elements, relationships, and principles of design and evolution.

Alright, let’s put these together.  Enterprise Architecture, what is it?  Enterprise Architecture are the fundamental concepts or properties of a group of organizations, aligned to achieve a single mission, which is embodied by its elements, relationship, and its principles of design and evolution.  Holy schnikes, that isn’t an easy definition.  I’ll simplify, Enterprise Architecture is the conscious design of your business.

Getting back to the first question, what does it mean to Scale Up?  Scaling up means consciously designing your business.

How do we consciously design our business?

Ready, I’m about to drop more big words.  Consciously designing our business requires intentionally defining four (4) things: Business Architecture, Data Architecture, Application Architecture, and Technology Architecture.  Conscious design isn’t easy, neither is scaling up; that’s why I referred to it as the “second Darwinian test” in my previous article.  Business, Data, Application and Technology are elements of an Enterprise.  They relate in the following way: Business determines the Data you need, the Data you need determines the type of Applications you require, and Applications will drive the Technology needed.  Your conscious design of these elements and continual determination of their evolution is what allows you to Scale-Up.

It is VERY VERY VERY VERY, so very it required all-caps and 4x iterations, that you understand you cannot effectively design your business based upon data, applications or technology; your Business Architecture must drive the rest.

Start-Up, Scale-Up and Scale-Out

Having been part of an immature, maturing and fully matured company, it strikes me how companies across these phases are more similar than different.  While I’m sure my next statement will elicit a resounding “Duhhh…,” it’s important to state.  Each of the aforementioned phases all have one problem in common: delivering customer value. Told you so, I’m sure you more animated reader’s just face palmed.

Why do I state the obvious?  This fact-of-business isn’t lost as a company matures; it requires an evolving perspective.  This perspective-evolution is the second similarity and unfortunately a common cause for organizational degradation.

Scale Up

Let’s start talking customer value from each perspective.  I don’t like referring to company stages as immature, maturing or fully matured; these terms are more judgmental than practical.  I’ll reference each phase from the perspective of customer value.  I hereby knight these respectively aforementioned terms Start-Up, Scale-Up and Scale-Out.

Start-Up

What is a Start-Up’s customer value perspective?  Steve Blank has a choke hold on this concept; his ideas on Customer Discovery nailed it.  A Start-Up is about discovering new value propositions.  It is about making assumptions of what people need, getting out of the office and validating those assumptions with 1:1 customer interaction.  A Start-Up validates product-market fit and confirms demand exists.  This is the first Darwinian test of a company, “…Can we find ways to deliver value.”

Once a Start-Up validates a value proposition it is time to scale.  A Scale-Ups customer value perspective is all about effectively delivering a validated value proposition to a market beyond early adopters.  This is the second Darwinian test of any company, here a company can stagnate or go-under.  A Scale-Up’s primary concern should be effectiveness of value delivery.  In a Scale-Up, a common self-perpetuated lie is the “Efficiency Lie.”  If you search Efficiency Lie, you may only find this article.  The Efficiency Lie, as hereby deemed by me, states you cannot be efficient before you are effective.  Scale-Ups often strive for efficiency in many areas where they are simply ineffective.  The outcome of an efficient ineffective value delivery process is efficiently delivery the wrong value (I can already her the face-palms again).

Scale-Up

What new Scale-Ups tells themselves is “…It’s time to be more efficient!”  Yes, this sounds really good after the post Start-Up burn rate hangover.  A cold reality is an early stage Scale-Up knows what their customer values, has an idea of how to deliver it, but has not driven many (or any) systemic process(s) for continuous delivery of the value proposition.

Are you and your company caught in the Scale-Up Stagnation Slide? (*bass-drum* *bass-drum* “Now do the priority shuffle”). Want a head start on where I’m going, research Enterprise Architecture!