I recently attended a conference about strategic alliances that took place in a typical conference setting. During the conference, several people presented their cases to the audience, all with a different style. Some presented almost only talking about their company, others barely mentioned their company and focused completely on an alliance case. All presenters created confusion among the audience!
That confusion found its root course in the fact that terms were loosely and randomly used. The terms partnerships, alliances and ecosystems were used interchangeably, most often without properly clarifying what the term meant in the specific context of each presentation. I especially have to draw attention to the word “ecosystem” which seems to be the buzzword of the century again and during the conference, was loosely used. A simple and clear definition of a business ecosystem can be found on the Investopedia website:
“A business ecosystem is the network of organisations — including suppliers, distributors, customers, competitors, government agencies, and so on — involved in the delivery of a specific product or service through both competition and cooperation.”
Essential in this definition is that an ecosystem consists of a network of organisations, which in my view means it consists – even in its simplest form – of more than two organisations. Also interesting to note is that an ecosystem can consist of parties both in competition and in cooperation! A good example is the ecosystem that Renault and Nissan have set-up for their electric vehicles. It consists amongst others of a bilateral alliance for joint procurement and design, they might have the same suppliers for components, yet in the market there is fierce competition between the Renault Zoe and the Nissan Leaf.
However you look at this definition, a one-to-one bilateral alliance or partnership is not an ecosystem by itself, but can be part of an ecosystem. On the other hand you’ll need to know how to create and manage successful bilateral alliances before you can orchestrate the far more complex ecosystem. Bilateral relationships are the foundation!
Even though I did not agree with the way some of the terms were used at the conference, it – as I wrote in the article “The Illusion of Communication” – doesn’t matter what terms we use, as long as we clarify what the terms that we use actually mean! (which unfortunately was insufficiently done in this case).
PS: Read here why I think the word alliance is a better and safer word to use than the word partnership.