Ecosystem is a word that recently found its way in business. However, I rarely hear someone who actually understands what it means and its power. This to say, right now the word would not be out of place in a game of Bullshit-Bingo.
We often use ecosystem to describe who your competitors are within the context of your business. Because competition is not a part of your business model (you can find a great article on that here), but we still feel the urge to get a grip on the bigger picture in which we operate, we thought that ecosystem could cover that. After all, an ecosystem is a theoretical model of all the stakeholders that interact with each other and, by that interaction, change the behavior of those stakeholders. The crucial fault we make is to limit eco-system to one (often very narrow) focus. App-development is not considered a part of the ‘ecosystem’ of a construction company and vice-versa.
The real reason we started using ‘ecosystem’ is because it sounds green, new and gives a vague impression that your organization is familiar with systems-thinking. But even though we use the term for a sort of light-system overview, it’s hardly comparable with actually thinking in systems, let alone actually working with systems. Probably ‘business environment’ is a better term for what we’re looking at (and it still sounds reasonably green, consider that a bonus).
Of course this doesn’t mean that ecosystems are irrelevant within business environments. It’s not about knowing every single player and what they do, it’s about acknowledging market-drivers and companies that have the power to radically change the meaning of a market (Seth Godin recently wrote this article on that aspect). Although this is extremely complex, I hope the video embedded below explains my point:
Now this is an ecosystem in action. And understanding how these kind of chain reactions work, can be extremely powerful in a business context.
A traditional CEO might be aware of the wolves he has to keep an eye on and the deers he can scare to enlarge his influence. Someone who truly understands ecosystems knows how he can change the course of the rivers and by that change the market dynamics entirely.