What Management Needs to Become in an Era of Ecosystems

"As with all management metaphors, talk of business ecosystems has some commentators asking: Is this really new? Weren’t companies always embedded in larger systems, and also made up of internal networks? Systems thinking in management, as pioneered by Hans Ulrich, Peter Gomez, and Fredmund Malik at St. Gallen University (and in America, by Jay Forrester, Russell Ackoff, and Peter Senge) has long been part of business school curricula. Indeed, Peter Drucker himself, decades ago, came up with the term “social ecology” to describe the nature of his work as he studied the workings of organizations and their impacts and integration with society.

What has changed is the technology that has us more connected and immersed in data than ever before. In today’s world of networking and collaboration software, big data, analytics, and AI, managers simply cannot continue to assume a carved-out model of the firm for the convenience of seeing how to manage it. Now that firms’ activities are so intertwined and their successes so interdependent, the old tools and techniques no longer work.

To succeed in the era of platforms and partnerships, managers will need to change practice on many levels. And with the new practices of ecosystem management must come new management theory, also reoriented around a larger-scale system-level view. Both practitioners and scholars can begin by dispensing with mechanistic, industrial-age models of inputs, processes, and outputs. They will have to take a more dynamic, organic, and evolutionary view of how organizations’ capacities grow and can be cultivated."

What Management Needs to Become in an Era of Ecosystems