Navigating the Leadership Challenges of Innovation Ecosystems

As our world becomes ever more connected, fewer innovations and initiatives stand alone. New markets require collaboration among multiple participants to take shape, and businesses need to form networks of cooperation with investors, suppliers, complementors, and even customers. Innovating in such “ecosystems” creates a new set of challenges for organizations and their leaders.

Ron Adner, the David T. McLaughlin professor of strategy at the Tuck School of Business and the author of The Wide Lens: What Successful Innovators See That Others Miss (Portfolio, 2013), has been studying ecosystem strategy for more than two decades. In that time, digital tools have connected everyone in the business and innovation fields more closely. But even as networks have become increasingly complex, the right business response can be elusive. Organizations, Adner says, struggle to capitalize on new technologies and effectively manage relationships with their allies, competitors, and peers.

Adner wrote in The Wide Lens that “in some ways, ecosystem challenges can be viewed simply as traditional project management challenges writ large.” The critical difference, he argues, is in the way the boundaries of both the players and their roles are drawn and defined. Often there is no agreement on who is the project manager, and key participants may not even be aware that they are part of the project.

In an interview with MIT Sloan Management Review, Adner says that while many efforts at collaboration become stymied by leadership issues, it’s possible to effectively manage those challenges and and usher in novel ideas.

Let’s start with the basics. How do you define the concept of innovation ecosystems?

There are two approaches to this concept. The first, which is the more common take, sees ecosystems as a set of interactions among a diversity of actors that leads to good things. This is what people have in mind when they talk about the Silicon Valley ecosystem, or the healthcare ecosystem, or the Apple ecosystem — where lots of things are happening around the gravitational pull of one actor. There’s all this energy and flow and money and ideas, and they interact productively with one another.

My view is somewhat different. I see the innovation ecosystems as a multilateral set of partners that need to be aligned for a focal value proposition to materialize. These partners collaborate because they want to compete with whatever the established proposition is.