The economic models of the 20th century created paradigms of business ego-systems that have prevailed for hundreds of years. The ego-system thinking created non-collaborative organizations ruled by Kings of industry who managed through organizational hierarchies of power and influence. The growth of commerce and wealth fueled the ego-system model that created today’s competitive marketplace of goods and services globally.
Then the marketplace began to change and the crowds rejected the philosophies of the ego-system rulers and the business models were no longer capable of serving the interest of the marketplace. The ego-systems were unable to produce optimum results for all stakeholders. Leaders were unable to understand the requirements of a new marketplace and managers were unable to satisfy all stakeholder because of an obsessive focus on one stakeholder, the customer and one result, profit.
A new system has emerged that replaces the economic theories of the ego-system and all its principles and practices. The new organizations emerging are replacing the BIG and small ego-system organizations of the past. these organizations run on mental models and philosophies represented by ecosystem thinking. Ecosystem organizations lead and manage by a new set of organizational principles that creates higher productivity, increased innovation and collaborative advice through continuous feedback from the crowds.
The ability to shift from ego-system to ecosystem thinking is probably the single most important leadership challenge today. Today’s thinking shapes how we enact tomorrow’s reality. Unless leaders change their thinking they will continue to chase results through ego-system hierarchies built around command and control mentalities that optimize the parts without considering the whole. The result is a war of the parts against the whole.
Six Ecosystem Management Principles
Ego-systems fueled macho management principles. Ecosystems are fueled by a different set of principles that enable the parts to work together for the benefit of the whole. The results are optimization vs. sub-optimization of the whole.
The six ecosystem management principles are:
- Relationships improve by listening. Relationships — with all stakeholders — involve a give-and-take. Everyone has value to add. So instead of sending out closed loop surveys to a select few stakeholders, ask open-ended questions for all stakeholders to give advice so you can listen better to what they say they really need.
- Think about the long tail. Short-term thinking a hangover from the ego-system management philosophy. For a business, stakeholders are the mechanism that links short-term actions and long-term value, because people have memories, and how they are treated today will decide how much value they create for you tomorrow.
- Hierarchies have crashed. Collaboration is growing. For the last two hundred years organizations have been hierarchical, with authority flowing down from the top, while information flowed up from the bottom. Today, anyone can jump the hierarchy with a click of the mouse.
- Rules are meaningless. Culture and crowd customs create meaningful work today. Culture – the unwritten rules that govern how crowds behave – is the most important factor in determining how your organization through the waters of disruptive innovations that are driving today’s marketplace.
- Building trust as job 1. Exploiting stakeholder mistakes, oversights, or lack of knowledge is a poor practice in a transparent connected world. Relationships succeed based on mutual trust. Trust gets built by listening (#1) and seeing things from the other parties perspective. Continuously protecting stakeholder interest improves trust and it is the new standard.
- Openly share. In the social era people have an urge to share and receive. In the social Sharing your ideas to inspire more sharing and faster innovation. Sharing builds and promotes trust. Sharing and allowing others to share is a way figure out what matters to your stakeholders. Knowing what matters helps you figure out how to deliver what matters.
Ecosystems have always created the most value that sustains all stakeholders. The ego-system design and its management principles cannot succeed in the emerging marketplace being built on a different set of principles.