The connecting leader: Orchestrating ecosystems

Today, macro societal forces are blurring the boundaries of the enterprise. Organizations have been forced to rapidly respond to geopolitical and economic volatility, constant technological changes, new customer and worker expectations, and a more globally complex and connected environment. That has produced a rapid evolution in how businesses, governments, and societies think about partnership.

Examples abound. At the corporate level, Majid Al Futtaim (MAF), the largest retail conglomerate operating in the Gulf countries, orchestrated an ecosystem aimed at fostering innovation by partnering with the Dubai International Financial Center, AstroLabs, and Microsoft. The result was the Launchpad, an ecosystem of local startup companies driving outside-in innovation. The partnerships have also given MAF a leg up when it comes to market intelligence as it positions itself as a champion for local economic development.

At the societal level, the pharma industry and a wide range of government agencies teamed together in perhaps the greatest success story to date. They developed a very complex and high-powered ecosystem that produced Covid vaccines much more quickly than anyone thought possible.

Ecosystems can be comprised of investors, regulators, local communities, customers, suppliers, and even competitors. In some cases, the aim is to accomplish a very specific goal. In others, organizations are seeking ready access to a broader range of resources and capabilities, looking to expand their peripheral vision to see weak signals of change sooner (as MAF did), or attempting to drive new sources of growth and innovation across the business.¹ Regardless of the desired result, it all starts with ecosystem thinking, a crucial mindset for any leader in any function. Organizations that have ecosystem-savvy leaders are best positioned to meet the needs of today’s market.

Developing the capabilities to maintain a thriving ecosystem

It’s more important than ever that leaders build connections across organizations. But doing so is also more complicated than ever.

Successfully navigating ecosystems demands a specific set of capabilities, says Capgemini’s Andreas Sjostrom, Vice President and Director of the San Francisco Applied Innovation Exchange, who has experience doing just that. He notes that leaders must be able to influence without authority, build trust, and navigate with agility. Executives with ambitions to become great ecosystem builders can start by looking around—building a muscle for curiosity and the courage to step outside their comfort zone. Leaders should also take a long view, remaining purposeful over time. They not only should develop a rational business case, but also seek to drive the sort of emotional connection to outcomes that breeds a commitment to change.

Based on our ongoing work and research, we have identified five characteristics that are most important for orchestrating ecosystems, which overlap significantly with Sjostrom’s advice. Leaders need to be:

• Customer-centric—Deeply understanding customer segments, looking at products and services through the lens of the customer to improve overall customer experience and understand how their interests are evolving
• Externally networked—Connecting and building relationships with leaders of organizations with complementary capabilities, whether the company is currently working with them or not
• Invested in external innovation—Driving innovation through teaming within and across organizations, as well as across industries
• Committed to solving the big problems, such as sustainability—Adopting business practices that consider social and environmental impact, only partnering with ecosystem actors who embrace responsible business practices 
• Culturally adept—Navigating diverse cultures seamlessly, balancing global and local capabilities, understanding differences among global and local customers, regulators, and suppliers

Companies and leaders who see the necessity of orchestrating ecosystems are working hard to develop executives with all these characteristics. Yet our analysis of thousands of leaders over the past 10 years has consistently shown that executives lack some core capabilities for the job, including outside-in thinking and the ability to anticipate external forces of change or disruption. Our more recent analysis of 360-degree assessments of nearly 7,000 leaders found those characteristics are viewed as among the weakest for most leaders.² 

To help leaders develop these capabilities, companies can:

• Give high-potential executives stretch opportunities such as presenting to the board, taking a leading role in M&A or joint ventures, or piloting work with potential ecosystem partners.
• Give leaders support and time to join external boards, present at industry conferences, or partake in expeditions to network and learn with external stakeholders.
• Create joint learning journeys for leaders managing specific ecosystem partnerships, focusing on practical learning through working on specific projects related to ecosystem needs.
• Design targeted learning modules to build the key capabilities identified above, leveraging outside-in thinking, mapping ecosystem relationships, building win-win partnerships, collaborating across boundaries, influencing without authority, and co-creating innovation. Such learning scenarios give people a safe space to stretch their orientation and practice new capabilities.
• Break silos and hierarchy, eliminate boundaries, and work to build a culture with greater connectivity and empowerment, improving decision speed.

Conclusion

Organizations of all kinds are realizing that they’re most effective when they leverage expertise outside their own walls. In private industries, partners help companies move more quickly and grow faster. The public sector, too, has found increasing utility in partnerships to meet existing and emerging challenges. However, any organization looking to harness the power of ecosystems must have leaders equipped for the job. Those that commit to developing leaders with the capabilities and mindset for collaboration will reap benefits that go far beyond those of the ecosystem itself.

References

¹ Recently, Ernst & Young studied the financial impact of business ecosystems and found that they bring between 12% and 13% return across several metrics. See Greg Sarafin, “The CEO Imperative: How mastering ecosystems transforms performance,” EY, January 24, 2022.

² Proprietary Heidrick & Struggles analysis, summer 2024.