Ecosystem Team

The Ecosystem team is responsible for defining the ecosystem structure, strategy and business objectives for the Product, Internal Product and Enabling Teams. They provide funding for the creation of both externally facing products, as well as internal products that streamline the performance of the Stream Teams.

Customer problems are larger than products. The benefit of an ecosystem is that companies are able to take advantages of the benefits of a successful product to build out an entire suite of products that are all aligned and working together. This allows the company to deliver more value to the customer and to capture more of the value that they are creating. As they say "first time founders focus on product, second time founders focus on distribution". Ecosystems are all about distribution.

Core team members

Enabling Teams are staffed by the most senior leaders in the company or business unit. Example include:

• CEO
• Chief Product Officer (CPO)
• Chief Technology Officer (CTO)
• Chief Revenue Officer (CRO)
• Chief Operating Officer (COO)
• Chief Financial Officer (CFO)
• Chief People Officer / HR Lead
• Head of Legal

How Ecosystem Teams work

The difference between a Product Team and an Ecosystem Team

There is a huge overlap in terms of the work done by the two teams. The key difference is that they operate at different levels in the organisation. A Product Team focuses on the development of a single product via multiple aligned Stream Teams. Whereas the Ecosystem Team is responsible for the coordination and support of multiple Product Teams, Internal Product Teams and Enabling Teams. The focus is greater than an individual product and is more about the coordinated value that the suite of products is delivering to the customer.

Do we need to change from the functional structure to a product structure?

The average lifespan of a company on the S&P 500 has reduced from 61 years in 1958 to 18 years today. New competitive forces are emerging so companies need to be able to change quickly.

We recognise that centrally managed economies are brittle and can fail rapidly, yet we still operate our companies in a similar way. Centralised decision making works for startups because the founder often has the best understanding of the customer and the market. They can move fast with clarity of direction but, even then, most startups fail. As companies grow, the complexity of the marketplace, the constant changes and the need to adapt to new technologies and customer needs means that leadership can no longer keep up.

There are no universal truths and laws in management comparable to those found in the natural sciences. As a craft, management must keep pace with changing times. Management activities must address the challenges. That’s why there are no ‘successful’ enterprises, only ones that move on. Only by adapting to change and keeping pace with the times can they survive.

Zhang Ruimin, CEO, Haier

Haier have gone all-in with product structures. They split their company into 4,000 separate companies, with each one responsible for it's own P&L. The rationale was that they wanted to decentralise decision making to the teams, but they found that the motivations weren't always aligned. To overcome this, they made every team independent and the people in the team work on a profit sharing basis. This better the team and ecosystem perform, the better you do.

They follow a VC style approach to funding new teams. But because of their scale they can kick start companies with immediate distribution opportunities. This has increased their success rate for new startups to 49% compared with the industry average of 10%.

The transition took about 20 years to complete, and they are still transforming. The success of the model speaks for itself as Haier is the largest white goods manufacturer in the world and they have spun off 7 unicorns and 120 gazelles.