Ecosystem Leaders

Episode 150

October 10, 2022

#150 Allan Adler: The Era of Ecosystems

Entering the Era of Ecosystems:In this podcast, Allan and Chip discuss how businesses can join the go-to-ecosystem trend–from its organizational ...

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Allan Adler, a Managing Partner at Digital Bridge Partners, joins Chip today in this episode of Ecosystem Aces. Allan's visionary innovations have been instrumental in championing a new perspective on the growth of ecosystem partnering. Coining the term #GoToEcosystem, Allan introduced a new way of approaching partnerships to drive outsized growth for businesses.

In this podcast, Allan and Chip discuss how businesses can join the go-to-ecosystem trend–from its organizational requirements, business mindset, value, and the future of the market. Some of the crucial points explored are:

Definition, benefits, and general insights about go-to-ecosystem strategies;
Ecosystem as a vital part of your product's DNA; and
The future of Ecosystems: from a decade to an "era."

Definition, Benefits, and General Insights about Go-To-Ecosystem Strategies

Imagine a snowball sitting at the top of a mountain. As the snowball rolls down the mountain, various elements stick to it, increasing its size. And as it starts to snow again, the snow added to the snowball as it travels downhill changes, if not improves, the overall appearance of the snowball.

Allan uses this snowball as an analogy to your business product and how the go-to-ecosystem can help expand it–therefore, growing your business.

The various elements contributing to the growth of the snowball are the multiple ecosystem entities engaging with your product and their respective capabilities in making it grow. Marketing teams create solutions and campaigns; sales teams drive customer value; customer success teams derive customer value realization and manage customer relationships.

However, in a go-to-market company, most of these snowflakes fail to land where you would need them to expand your company. "That's why you see lack of attribution and lack of traction and ultimately don't get the returns," Allan said. "That is a go-to-market [company]: a snowball without ecosystems or ecosystems that get scattered randomly."

A go-to-ecosystem company incorporates all contributions to your product, just like how all snowflakes should contribute to the growth of your snowball. So, instead of the snowball just being a product, it is now a product and an Ecosystem at the same time.

This means that go-to-ecosystem companies define and establish ways of interacting with other entities with a precise timeline and spending level.

Furthermore, a go-to-ecosystem seamlessly integrates marketing campaigns, KPIs, processes, and other activities as a centric strategy for solutions and products.

Ecosystem As A Vital Part of Your Product's DNA

The key to operating a go-to-ecosystem model is accepting ecosystems as a part of your company's DNA and how it thinks about its product.

"There are different segments of partners, like maybe you have a strategic partner, with whom you do very special things, versus a partner that's more like broccoli on the plate," Allan said. "When you think about the roadmap that includes the ecosystem, it's not just strapped the ecosystem onto the product roadmap, and you're done."

In short, for your go-to-ecosystem model to be fully operational, it should reflect on the deliverables across your company's value chain.

Consumers want whole solutions. They do not want to go to different markets to look for other parts of the solutions. And for companies to deliver an exquisitely integrated solution, they must be on the same page with the ecosystem at all times.

However, what makes this difficult is that different segments of partnerships call for completely different go-to-market motions. Although partnering companies should be ready to deliver complementary or additional value on time, it is tough to curate solutions for each situation when there are multiple and shifting partnerships.

To ensure this problem would not occur, Allan urges product partnership leaders to sync up directly with ecosystems. Because once it does, companies achieve material and qualitative improvement in every part of the product stack.

So, the ecosystem roadmap is the fastest way to create rapid growth, profitability, and new opportunities. If a company fails to apply ecosystem partners around the elements within its operating model, in Allan's words, it is missing the boat.

Furthermore, there is a profitability problem. With the current inflation and a potentially impending recession, companies have started to prioritize profitability over growth. Allan argues that there is no better way to make existing operations more profitable than to increase partner attachment.

Unfortunately, headcounts don't produce fast enough. It takes a while for new representatives to bring a return on investment. So today, as companies shift away from hiring people to make existing representatives more valuable, it's essential to understand new strategies.

Allan provides a new perspective in situations like this–if a company could find a way to make its existing resources more profitable and productive, it can increase profitability. And this is precisely where partnerships can play an important role.

A well-orchestrated integration between partners could astronomically improve sales and marketing performance. Statistically, if you have a higher partner attachment, you lower the sales cycle typically by 50%. Aside from this, you also increase the ACV typically by 50%.

Sales representatives who use partners make twice as many sales as those that don't. So, as an outcome of its partnerships, you could expect a multiplier effect on a company's profit once they are committed and tightly connected to its ecosystems.

The Future of Ecosystems: From A Decade to An “Era”

In regards to the governance of partnerships, Allan believes that companies must go beyond management at the C-suite and board level.

Think of your company as a massive pool of ecosystems. There are a plethora of swimming lanes in this huge pool. The thing about these swimming lanes is that they don’t have lifeguards, so no one can actually ensure that everyone is swimming correctly.

“The high-performing ecosystem organizations have a lifeguard,” Allan said. “And the lifeguard is actually sitting in the C-suite, watching the swimming lanes.”

Allan sees partner managers reporting to the sales department as one harmful byproduct of the absence of these lifeguards. Sales teams usually work under short-term KPIs, so most of their processes and operations center around short-term goals. When partner managers report to sales, they automatically equip a sense of short-termism in their brains instead of having 2-3 year goals for the ecosystem.

For Allan, this is dangerous. “There is never the right orchestration. There is never the right decision-making. There is never the right alignment,” he added. “That is what I would call a very immature go-to-ecosystem maturity model for a partner account manager working with sales.”

In short, without C-suite and board-level management, you wouldn’t know if everyone is working correctly. From your product, marketing, platform, business model, and operations team, each one should have a manager working as a lifeguard to ensure the company’s safety.

Bottom Line

Allan sees the absence of C-suite and board-level management as the weakest link in the go-to-ecosystem models. Once this issue is resolved, Allan believes that the go-to-ecosystem trend among businesses will go from episodic to reported to standardized, and from governed to institutionalized.

As we move up the maturity curve, it’s safe to say that we’re definitely entering not just a decade but an era of the ecosystem.

To learn more about Allan and what his team at Digital Bridge Partners is working on, you can follow him on LinkedIn.

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