In my introductory post, I noted business ecosystems as a key business trend that I see leading to success in the highly networked and transparent world that’s emerging. The number of disruptive scenarios emerging now are causing unprecedented uncertainty for businesses and people alike. Autonomous & connected vehicles, virtual & augmented reality, healthy life extension, smart home, the circular economy, nano & biotechnology, 3D/4D printing & additive manufacturing, crypto-currencies & blockchain, renewable energy and artificial intelligence & advanced robotics all have broad reaching implications. Everyone is trying to decide the impact on their business and industry. Yet, the implications of these disruptive scenarios are so broad that no single business or industry can apply them in isolation and to attempt to carries grave risk of disintermediation. As the disruptive scenarios emerge and evolve, I see them coalescing in the form of multi-industry business ecosystems. An ecosystem, in scientific terms, is a group of living or non-living things that depends upon each other to thrive. A business ecosystem is a self-organizing network (typically enabled by e-commerce and/or social technologies) whose participants exchange value around a common purpose. Because every industry today can be considered an ecosystem, the question is how those industries will evolve as a result of the disruptive scenarios. The scenarios enable new ways of exchanging value and threaten existing industry participants with disintermediation. The only participants sure to be safe from disintermediation are the consumers themselves. Because consumers’ lives are combinatorial by nature, it makes the most sense to me that ecosystems will form around their common multi-dimensional and multi-industry needs (I’ll offer some potential examples in future posts). Our fundamental needs represent the intersection points for the disruptive scenarios and future makeup of our industries.
Thus, an understanding of business ecosystems is critical for strategists, entrepreneurs and individuals alike as more and more aspects of our lives become networked. Over the next few days, I’ll lay out the top ten reasons why I believe that business ecosystems are the ultimate destination of disruptive scenarios and the future of business. Let’s get started with number 10: Community Values.
Our current value system has created unprecendented prosperity and challenges
In my Predicting the Future of Business post, I used the Spiral Dynamics model of human evolution to examine the history of technology and societal development. In that post, I concluded that Spiral Dynamics was an excellent predictor for the future of business because of its historical accuracy in explaining the correlation between societal development and general purpose technologies. In Spiral Dynamics authors Don Beck and Christopher Cowan, note that new values emerge when existing values can no longer deal with the current complexity of life conditions. The amount of disruption and innovation occurring now is certainly increasing the complexity of life conditions and taxing the predominant value system. That system is the Prosperity value system, which favors competition, endless drive, hierarchical power, status, achievement and materialism. The system sprang to life about 200 years ago as a result of five forces that are still resonant today:
- the market economy as described initially by Adam Smith in The Wealth of Nations in 1776
- utilitarian political philosophy as reflected in the rise of the nation-state
- the scientific method that supplanted myths, superstition and “blind” faith
- popularization of technology, the Industrial Revolution and machines replacing human labor
- rise of the individual as expressed in guarantees of freedom, liberty, rights and personal autonomy
These five forces have improved life conditions immensely as the percent of people living in extreme poverty has gone from 85% to 16%; income per capita has increased 1000%; population has exploded from 1 billion to 7 billion; the adult literacy rate is 84% and life expectancy has increased from 31 to 68 years. While the prosperity value system has been responsible for the greatest run of human progress in history, the negative consequences of this value system have been profound. According to Researcher/Story Teller Brene Brown, Americans (who represent the largest population of the Prosperity value system) are the most in debt, obese, addicted and medicated adult cohort in US history. Peter Diamandis and Steven Kotler, writing on the concept of Abundance (which I’ll address later in this top ten countdown) note:
“we consume approximately 30% more of the planet’s resources than we can replace. Population growth is threatening Earth’s ability to provide resources to sustain it. One in four animals faces extinction, 90% of large fish are already extinct, our aquifiers are drying up, and our soil is growing too salty for crop production. In the time it takes to read this sentence, one child will die of hunger. By the time you’ve made it through this paragraph another will be dead from thirst.”
This says nothing of the effect of the Prosperity system on global climate change, its impact on the environment or the growing inequality it has created. Clearly, life conditions are ripe for a new value system.
Prosperity challenges give rise to the Community value system
The Community value system that’s emerging embodies the following values:
- Becomes more aware of the suffering of the world, of other sentient beings
- The human spirit is freed from greed, dogma, and divisiveness
- Feelings, sensitivity, and caring supersede cold rationality
- Share the Earth’s resources and opportunities equally among all
- Reach decisions through consensus processes
- Anti-authoritarian and against hierarchy; establishes lateral bonding and linking
- All values are pluralistic and relativistic; no one is marginalized
- Environmentalism becomes a socio-political movement
- A fundamental belief is “All people are good; it’s society that makes them bad.” Highly idealistic.
We see the Community value system in such things as: the Internet, social media, online communities, the sharing economy, the energy internet, collaborative commons, the circular economy, sustainability, John Lennon’s music, deep ecology, Greenpeace, animal rights, Woodstock, ACLU, diversity training, multiculturalism and the natural/organic foods movement.
Ecosystems embody community values
So, how does this impact business models? In 1911, Frederick W. Taylor created the hierarchical organizational model which dominates nearly every business today. In “The Principles of Scientific Management”, he proposed a new brand of organizational science to deal with the challenges (ie- life conditions) of the industrial age. His vision was to functionally divide work between thinking people (managers) and executing people (workers) to maximize efficiency. It was the perfect model for the Prosperity value system that was coming into prominence. In it, individuals utilized tools, standards, rules, structures and processes to compete with each other and advance up the hierarchy. Problem solving was linear and the objective was to make work predictable. There were winners and losers and those on top of the hierarchy were rewarded with the most material gains. Inequality was less important than efficiency and prosperous growth. This was the proverbial survival of the fittest and the model has existed, nearly unchanged ever since. Life conditions and values, however, have continued to evolve and become increasingly complex. At the rate new technologies are being discovered and innovations are occurring, attempting to make business predictable through linear thinking is simply not useful.
Enter the ecosystem model. In business ecosystems, anyone can contribute value based upon their own competence or create collective competence with others to achieve common goals. Work is self-organizing and cellular. Ecosystems leverage social pressure to motivate and decentralize decision making. Companies that are embracing the principles of ecosystems include: shoe retailer Zappos, publishing platform Medium and social media toolset Buffer, whose implementations of the holocracy model are well-documented. While holocracy exemplifies how the community value system is emerging within corporations, other examples include the collaborative economy, industry platforms, coworking, and the concept of abundance – all topics I’ll address later in this countdown. Regardless of how holocracy evolves at these pioneering companies, it’s clear that ecosystems are fundamental to the emerging community value system, which makes “Community Values” the number 10 reason that ecosystems are the future.