You can always feel the difference between city streets that were designed from the bottom up versus the top down. For example, when I visited the Old City district in Baku, Azerbaijan, I noticed a marked contrast between the tightly twisted serpentine streets, lined with the most unusual shops and restaurants, compared to the squared-off shopping centers of suburbia in the United States.
The contrast is not coincidental. It is the result of the organizational approach that created each location.
What kind of company do you want to build?
Many companies desire the diversity and vibrancy of an old city, yet are frustrated they park in the cookie-cutter predictability of a strip mall.
Especially today, when the longevity of your organization depends on agility, creativity, adaptability, and diversity, it is important to appreciate the underlying foundation that determines the experience your organization will ultimately create for customers, employees, and the communities you serve.
Most organizations are still run like centrally planned economies, where a central authority determines how resources are allocated, defines who does what job, and provides the shared infrastructure and support (e.g., technology, HR, finance). This approach makes sense in stable environments, because we are better off with predictability than surprise. It results in a familiar, expected “strip-mall” mode of operations. If we want Italian there is Olive Garden, for Asian there is P.F. Chang’s, and for pizza, Domino’s. We sort of get the variety we want, but we are never wowed.
By contrast, laying down a street and letting anyone try to make a restaurant concept work there leads to far greater diversity. Some restaurants will thrive. Others will wither and be replaced. The result is a cornucopia of creative dining options.
For example, 45 minutes into the outskirts of Bogota, Colombia, Andres Carne de Res, considered by Eater as Bogota’s “wildest restaurant,” greets you with actors waiting in line, pretending to be hobos or doctors trying to enter the restaurant. When you get inside, they offer a children’s zone, five dance floors, a 25-foot climbing wall, a doggy daycare, and a stand where you can hire a local driver to drive you and your car home if you have had too much to drink. There’s also my favorite restaurant in Bangkok, which offers beer and huge bowls of spicy hot noodle soup under a tarp off the insanely loud Sukuhmvit Road.
Creating an amazing experience
What kind of experience do you want to create for your customers, employees, and communities? Do you aspire to the strip mall approach (“good enough” but predictable) or the old city (unexpected and potentially amazing)?
I propose that in the uncertainty into which we have been thrusted today, the winning answer is the more unpredictable approach. We want to be trying new concepts and letting them thrive or die. We want experimentation, creativity, adaptability, and diversity.
To see if your organization is ready to make the leap from a hierarchical to an ecosystem model, consider the following seven statements. For each, note whether you lean more toward “yes” or “no”.
- Our organization treats its people more like internal entrepreneurs than employees.
- Delivering value to our end-user involves the collaboration of multiple partners in our ecosystem.
- We primarily work in decentralized teams or units.
- Teams or units in the organization are empowered to act with autonomy and make their own decisions.
- We are better than others in our industry at spotting customer/market needs and opportunities.
- It is easy to get the resources (funding, time, and support) to act on a new opportunity.
- If a unit or team is not satisfied with the support it is getting from a function like IT, Finance, or Legal, it can choose from other options.
If you answered mostly “yes” to the questions above, your organization may be ready to explore an ecosystems approach. Visit the Business Ecosystem Alliance page to learn more from experts on getting started with ecosystems.