Have you ever been to a fast-moving square dance? Partners dance together, spin around a time or two, and then move onto new partners. As the dance progresses, some people return to their original partners, while others will dance once and leave the floor. If you pay attention, this resembles a fast-emerging business strategy that every technology innovator needs to know if they want to compete in the 21st century: The co-economy. So are you square dancing or foxtrotting in this economy?
Like one big square dance, the co-economy relies on companies dynamically picking the right combination of vertical, horizontal and regional specialist partners.
You have to come up with the ones who have the right experience, relationships, technology and skills to develop the right solution for the customer.
Too many businesses are still doing the old-fashioned foxtrot, holding onto just one or two existing, “strategic” partners, using the same old steps and proprietary, well-tested moves. These foxtrotters keep their “innovations” tightly concealed within their organization’s four walls, often due to fear of a competitor stealing their ideas to gain an edge, or concern that the market will dramatically shift before the solution is developed.
Given the complexity and pace of change in our digital economy, this “fox-trot” model is no longer sustainable.
With the speed of innovation and technological evolution at an all-time high, customers are increasingly questioning why they should pay premiums for custom solutions based on proprietary or semi-proprietary technologies. Instead, they now expect horizontal, vertical and regional specialists to work together to develop scalable business solutions.
These solutions will be based on open systems and open standards that are interoperable and future-proofed. Because today’s business climate demands speed, agility, lower costs and more personalized customer experiences than never before. Customers expect more and will quickly take their business elsewhere if you cannot swiftly meet their needs.
Thus, companies flying solo are making a crucial mistake that can jeopardize their very survival.
In short, you cannot operate in a silo – you must build an ecosystem of customers and partners, large and small, and start co-innovating with them.
Whether you realize it or not, the world is already shifting to a co-economy, with more engagement among customers, audiences and markets than ever before.
Just about every day, surprising new partnerships arise between players in adjacent or even opposite markets, as companies such as Amazon AWS and VMware, Google and Honda. My own employer, Cisco, and Lumen teamed up to deliver new value for customers. Thus, technology leaders must realize the single-vendor model is no longer viable.
Here’s how you can get started capitalizing on the co-economy:
Change your perception.
Think of the co-economy as a new approach to business partnerships. Focus on more than the on one-off or occasional engagements, or even long-standing, fixed relationships with value-added resellers (VARs) or systems integrators. The co-economy involves working closely with a vast range of third parties – including vendors, startups, government agencies, researchers and academics.
By tapping into a diverse set of resources with a variety of insights and experiences, you are better-equipped to create and deliver customized, disruptive solutions. These solutions are more open and interoperable – and honest. Rarely do the best ideas arise when all partners hail from the same background, industry or market.
But most importantly, your customers must be involved in your innovation process from day one.
The customer must be active contributors along each step of the way (not just a beta tester or someone who signs on the dotted line upon the project’s completion). This step ensures that the solutions you deliver address their very specific business problem. It also helps validate the scalability of that solution. Odds are that other businesses are facing the same challenges that you and your partners are.
Now, they will be able to replicate your initial results time and time again for continued gains.
Round up your partners.
You probably already have some sort of partner program or alliance network in place.
As you prepare to dive headfirst into the co-economy, revisit current business relationships to determine how to enhance the alliance and explore new opportunities for collaboration.
Don’t stop there. Broaden your circle and identify how you can work with new kinds of partners. If you are unsure where to start, don’t be afraid to think outside the box and leave your comfort zone behind. Attend an open house at a local startup or participate in a nearby university’s research program. Get to know these partners finding out their strengths, weaknesses and what makes them tick.
The more you understand their business, the better you can determine how they can help yours, and vice versa.
Don’t forget your internal teams.
Your own internal teams are just as vital to your partner ecosystems as outside players.
Therefore, it’s important to tear down cross-functional silos and bring together departments that once operated alone.
For example, if you are exploring Internet of Things (IoT) technologies, bring together information technology (IT) and operational technology (OT) groups. Although these departments have traditionally operated in isolation, IoT requires IT’s expertise in horizontal technologies, and OT’s domain know-how. Now you need both working together.
Note that you may face some change management challenges as you marry unfamiliar groups. However, transforming your own culture is a critical step in making the most of the co-economy.
While the word (co-ecomony) itself has yet to become a household phrase, the co-economy is here now and it’s here to stay. Whether your business is ready or not — look in the world — the co-economy has been working in every other part of life for centuries.
Competition will only become fiercer, and it will take more than traditional business partnerships to deliver true value to your customers. I encourage you to change your thinking and make a conscious effort to form and hone meaningful relationships with diverse partners.
Find ways to involve your customers in your co-innovation process and break down internal silos. You’ll be square-dancing your way into the co-economy in no time.
This article originally appeared in readwrite.