16 Jun How to Talk to Your CEO About the Ecosystem
June 16, 2022
Is your B2B SaaS Organization an Ecosystem Business?
Earlier this month, we talked about the two dimensions of an Ecosystem Business in our column: Is Your SaaS Org an Ecosystem Business? This article described the GoToEcosystem Opportunity Matrix, a model that outlines the two key dependencies for successfully transforming your company into an Ecosystem Business.
To summarize, the Opportunity Matrix (see image below) has two dimensions. The first dimension, Program Alignment, is defined by the following KPIs:
- Support for partners and communities is embedded across the organization.
- Partner IP is incorporated into product roadmaps and solutions.
The second dimension, Transformation to a Network Business Model, is defined by the following KPIs:
- Partners are attached to more than >90% of deals.
- Partners and communities build >25% of the Product IP.
- Your company’s Ecosystem Business model is powered by Network Effects.
When the KPIs for these two dimensions are achieved, the transformation from a Partner Business to an Ecosystem Business is complete, as seen below.
We concluded this in our prior column by posing the following two questions:
- Does your CEO understand the opportunity of transforming your company into an Ecosystem Business?
- Can you provide your C-Suite with a “crawl-walk-run plan” to transform your company into an Ecosystem Business?
Today, we’re going to provide a framework for how you can talk to your CEO about Ecosystem Transformation.
Telling the Ecosystem Business story to your CEO
With the Ecosystem Opportunity Matrix in mind, partner leaders may need to convince their CEOs why they should lead their companies transformation to an Ecosystem Business.
Before we do this, however, we must have a solid grasp on how a company becomes an Ecosystem Business. The Digital Bridge GoToEcosystem Maturity Model comes in handy here. The Maturity Model breaks down the journey from Partner Business to Ecosystem Business in 4 steps, as illustrated below.
As you can see, a company doesn’t become a true Ecosystem Business until the Ecosystem is an inherent element of the business, supported across all functional organizations, as illustrated in Stage 4 of the diagram above. In this stage, the partner ecosystem becomes the blood that flows through the organization, rather than being a disposable appendage. This is also when partner attach is supported across the business, in product and customer life cycles rather than only being a source of tactical revenue.
Luckily, many of the well-known B2B platform players – e.g., Microsoft, Salesforce, Atlassian, HubSpot, etc. – provide plenty of examples which point the way to becoming an Ecosystem Business. Be prepared to talk about these examples. If you need some pointers on how these companies managed their own ecosystem transformations, check out my friend, Avanish Sahai’s outstanding podcast series, The Platform Journey.
To be credible with your CEO, you need to present a 2 to 3 year plan which walks your CEO through the stages of the Maturity Model, explicitly articulating the following critical steps:
- Start: Clearly identify your current stage so everyone understands exactly where your company is on its Ecosystem journey.
- Crawl: Your short-term plan (< 6 months) to complete the current Maturity Model stage as measured by specific business outcomes, with leading and lagging indicators.
- Walk: Your medium-term plan (~6-12 months) which will prepare you to take on the challenges of the next stage of the Maturity Model.
- Run: Your long-term plan (~1-3 years) that describes how you will get to Stage 4 and achieve full Ecosystem Business maturity.