Speaker(s):   Marco Iansiti (HBS)
Title:                  Keystones and Dominators:  Framing the Operational Dynamics of Business Ecosystems

Abstract

Many industries today behave like a massively interconnected network of organizations, technologies, consumers and products.  Perhaps the most dramatic and widely known example is the computing industry.  In contrast with the vertically integrated environment of the 1960s and 1970s, today’s industry is divided into a large number of segments producing specialized products, technologies and services.  The degree of interaction between firms in the industry is truly astounding, with hundreds of organizations frequently involved in the design, production, distribution, or implementation of even a single product.  And because of this increasingly distributed industry structure, the focus of competition is shifting away from the management of internal resources, to the management and influence of assets that are outside the direct ownership and control of the firm.

The impact of this trend is important.  In networked industrial environments like the computer industry, the performance of any organization is driven in large part by the characteristics and structure of the network, which influence the combined behavior of its many partners, competitors and customers.  This makes an enormous difference in both strategy and operations.  As we saw with dramatic effect in the case of the recent .com and telecom implosions, strong, capable firms like Cisco Systems and Yahoo! suffered sudden and dramatic losses when their massive network of partners and customers faltered.  Could Cisco and Yahoo! have prevented these problems?  Did their behavior in previous years do anything to cause them?  How should their technology and operations strategies evolve in the future to help their business networks remain healthy? Are there ways in which leading firms can encourage innovation and productivity in their networks? And how should some of the less prominent firms focus their capabilities in the future, given these complex dynamics?  In order to answer these types of questions, we need a better way to understand the complex operational dynamics of highly interconnected networks of organizations, or “business ecosystems”.