Need, technology, and behavior: driving us inevitably to an ecosystem future
In 1993, a little-known illness infected 732 people across four states in the western US. The mysterious sickness led to the deaths of four children and left 178 other victims with long-term medical complications. The culprit? The Escherichia coli bacterium, now better known as E coli. The outbreak, linked to 73 Jack in the Box restaurants in California, Idaho, Nevada, and Washington, has been called the most infamous food poisoning in contemporary history. As an immediate result, all of the suspected restaurants were closed. Every point in the beef supply chain required scrutiny and resulting safety concerns changed the beef industry forever. In the year and a half after the outbreak, Jack in the Box lost approximately $160 million from both lawsuits and lost sales.
We’ve come a long way since that 1993 incident, but fragmented supply chain data still makes it difficult to pinpoint the origin of a food poisoning outbreak. But, imagine a future in which shutting down an entire supply system due to an outbreak won’t be necessary because we can trace the source of contamination to a shipment from a specific slaughterhouse in minutes. This is what companies like animal health company Zoetis and technology giant IBM are working to create right now.
I’ve worked with Zoetis’ head of corporate strategy, Tess Caputo. She explained how technology is enabling the evolution in the beef industry to prevent food safety outbreaks in the future. The beef supply chain is fragmented—a cow could be owned by three or four farmers in different states before the beef is packaged and sold to consumers. When a cow changes hands at auction, it’s difficult to keep a record of the feed it consumed, where that feed was produced, medications it received, and any previous owners.
Now, with retailers and consumers demanding transparency of the provenance of animals and the medications and treatment they receive, farmers and animal health organizations are partnering with tech companies to generate greater insights into an animal’s history. These partnerships become part of a greater ecosystem, backed by blockchain technology, that attaches a unique ID to each cow, records every time it receives medical treatment or is sold, and offers a traceable, trustworthy view of the animal’s complete background. Imagine if each cow had an identification number similar to a car’s vehicle identification number (VIN) that you could use to quickly pull up its entire history. This transparent recording system is also useful in the dairy industry, where diet, environment, genetics, and medicine can all affect the amount of milk produced. In the event of a food safety emergency, government agencies will be able to locate the source with more precision and manage outbreaks without shutting down entire supply chains.
A similar ecosystem, the IBM Food Trust, brings together producers, suppliers, and retailers to create a smart and sustainable food supply. IBM’s blockchain offers participants better visibility into their supply chains and allows information sharing between parties that is seamless, efficient, and secure. The Food Trust, made possible by an ecosystem of partners working together, helps to increase food safety, unlock supply chain efficiencies, reduce waste, and improve all participants’ bottom lines.
The same trend is occurring across nearly every other industry. From healthcare and media to telecommunications and energy, industry players are disengaging from competitive rivalries to begin establishing collaborative ecosystems. Three factors are driving this shift:
- Need: Across sectors a shift is underway, moving players away from myopic interests of investors and customers toward a focus on larger, societal needs.
- technology: New technologies are emerging that enable us to meet these needs in ways we could not before.
- Behaviors: With new technologies in hand and needs to apply them to, it is natural that humans and their organizations are changing their behavior, adopting new ways of thinking and thinking and organizing.
New needs come into focus
Industry ecosystems are not new. But the need for them is becoming more prevalent.
In my book Driving Innovation from Within, I share the story of a Danish carpenter named Christian Riisager who inspired an ecosystem around wind energy in the 1970s. He had designed a large windmill that could produce 22-55 kilowatts of wind power—enough to make wind a commercially viable resource. Instead of launching his own company to mass-produce the idea, he formed the Tvind School, a community of corporations and institutions including other innovators and technology firms. Backed by a team of supporters, Riisager’s innovative idea could scale rapidly. This pattern of ecosystem development is essential to medical innovation (e.g., magnetic resonance imaging, antiretroviral treatment for AIDS, and stents) as well as other transformative innovations such as e-mail and open-source software. In our society, the greatest innovation often comes not from individuals and startups, but from the collaboration of corporate and institutional employees.
Communities like these are becoming increasingly common because the need for them is elevating. Ecosystems develop around a shared purpose, and their prevalence is rising as major societal challenges, such as global food supply, climate change, income inequality, healthcare reform, immigration, and overpopulation are being thrust with greater urgency into societal consciousness. In a podcast interview, innovation and leadership scholar Navi Radjou told me, ‘In 2020, companies realized that things like social justice, climate change, and rapidly responding to social needs in times of crisis is not just “corporate social responsibility” anymore. It’s becoming the core purpose of companies.’
Another guest, Michael Raynor, managing director of Deloitte LLP, ominously warned that our planet will become uninhabitable unless we can reduce carbon emissions by 50 percent in the next ten years and hit zero carbon by 2050. The immediacy of these challenges has woken us up to a new purpose of a corporation—to think beyond profits for shareholders and work for the benefit of all stakeholders, including customers, suppliers, employees, society, and the environment. That purpose gives companies a goal to rally behind, and a reason to unite.
When I was in business school, strategy was a competitive process. To succeed, an organization needed to build out economies of scale and raise barriers to entry with the aim of winning more market share than its competitors. Today, a shift is underway. In order to solve broad societal challenges and better serve customers, the nature of competition is shifting. Technological advances such as the internet of things (IoT) and a growing network of autonomous connected devices that need to communicate with each other have rendered it impossible for a company to exist in a vacuum. Coopetition, or collaboration among competitors to produce mutually beneficial results, is becoming much more broadly accepted and, often, necessary.
As I rewrite the second edition of my book Outthink the Competition, I find myself softening the language and the references to warfare metaphors between business competitors. Although the strategic playbook garnered from warriors like Sun Tzu and Napoleon Bonaparte is still highly valuable, businesses today aren’t as interested in ‘killing’ or ‘crushing’ their competitors. In fact, they may need to form strategic partnerships with longtime rivals to supplement their capabilities and grow their markets. I spoke with Ram Charan, worldwide expert on business strategy, execution, corporate governance, and building high-performance organizations, who told me, ‘Most people want to divide the existing pie. The brilliant strategists expand the pie or create a new pie. They shape the new market space.’ Of course, in their influential book Blue Ocean Strategy, Renée Mauborgne and W. Chan Kim began urging businesses toward this perspective because, and Mauborgne explained to me in an interview, they wanted to propose looking at strategy as additive and creative rather than reductive and zero-sum.
A shared purpose, whether it means solving a grand societal challenge or meeting increasing customer expectations, naturally calls organizations to collective action and increases opportunities for all members to solve problems that matter.
New technologies enable us to coordinate around the needs
Once the seeds of community form around a shared purpose, an evolving society needs to make it easier for people to coordinate around that shared purpose. This is where new technologies come into play: Through open technology and social networking sites, communication happens faster than ever before. We can access more information, store it, validate it, and coordinate ourselves to move toward our common goals.
In 2021, a group of individual investors, including many first-time day traders, took on experienced hedge fund managers and overthrew the professionals’ plans to short GameStop stock and drive the price down. The newcomers, empowered by a Reddit community called WallStreetBets, coordinated to let fellow investors know when to buy and hold their shares. They rallied around GameStop, driving up the stock price and causing mass panic for hedge fund managers. One hedge fund, Melvin, lost so much money that it had to arrange outside investments to stay in operation.
In an inspiring story of communities coordinating themselves, a Facebook group dedicated to poking fun at the Baby Boomer generation learned that a man the group members had previously mocked was selling personal items to help him pay for a liver transplant. His life depended on affording the operation. So, the group decided to use the power of the Facebook platform to help him instead. They raised $50,000 to pay for his operation and provide care afterwards.
Communities like these are forming everywhere. On a trip to visit family in New Orleans, I came across a story of little red glass beads and a plan to save the city’s bar scene. A New Orleans parade group raised over $2 million on the GiveForms fundraising platform to keep the city’s bars afloat during and after COVID lockdowns. Residents can pre-purchase the $10 beans in advance. The organization will donate the funds immediately to bars and restaurants who need to pay their bills while they remain closed. In 2022, the beans can be redeemed at establishments all over the city. In all of these cases, groups of individuals infused with a shared purpose, empowered by connected technology platforms, are setting the stage for communities to coordinate themselves.
We have access to more information than ever before—data from smart cities, farms, manufacturing plants, construction sites—and a greater ability to process and store that information through cloud and edge computing. Decentralized blockchain technologies validate the data and allow groups to coordinate without an official leader. With the advent of open-source technology, machines today are smarter and more interconnected.
To fully enable smart homes, cities, and plants, our devices need to be in constant communication. This network of autonomous connected devices requires brands and companies to open their network of communication with each other. In turn, humans and companies are more connected. We can read news on Twitter of an earthquake halfway around the world seconds after it happens. Our actions and decisions, including what we waste, the products we buy, the ingredients in our food, and the energy we consume can be more easily tracked, observed, and shared. They have real implications for human lives around the globe. Not only is the need for ecosystems to emerge growing (due to the greater prevalence of large shared challenges) but the effort required to coordinate ourselves to meet those needs is dropping (thanks to technology).
Technology changes our behavior
Often without our full awareness, shifts in technology transform our human behavior. It starts on a small scale, almost unnoticeable, until a few years pass and our lives are completely transformed. One day, my daughter and I were riding in the back of a taxi in Colombia. The car was an older model with windows that still used a lever to be rolled down. When we arrived at our destination, my wife tapped on the outside of the window on my daughter’s side and motioned for her to roll down her window. My daughter didn’t know what to do. She searched for the button to lower the window, but there was none to be found. Technology has adapted her beyond the concept of rolling down a car window.
Today, when I visit my parents and my mom rattles off a list of driving directions, I find myself completely zoning out, knowing that I’m going to enter the address into Google Maps when I leave her house and mindlessly follow my phone’s guidance. I see similar changes in younger children, when they try to touch a TV screen and are left perplexed when it doesn’t function the same as a phone or tablet. And you’d be pressed to find a group of teenagers, or even adults, sitting waiting at a bus stop without taking out a phone to distract themselves. Technologies deliver ease into our lives, and once we grow accustomed to them, we’ve changed behaviors forever.
Technology is changing not only our individual behaviors but our collective ones. Over the past decade, companies like Uber, Lyft, and Airbnb started to transform our behaviors by introducing us to the sharing economy. We began to shift trust from brands, like buying an individual car from Ford or reserving a room at a Hilton hotel, to platforms where we now rent rides from strangers and stay in Airbnb rooms far from home. Dating and meetup apps connect people around shared interests and open us up to trusting in members of a community who we might not otherwise have met. Throughout history, we’ve learned to shift our trust from a small network of close family and neighbors, to well-known brands, to platforms. Now, the introduction of blockchain technology, which is known for its ability to verify contracts and transactions between parties without a ‘centralized’ officiator, allows us to trust in a decentralized system without a designated leader.
Tom Malone, founding director of the MIT Center for Collective Intelligence, in his book Superminds argues that humans think together in various forms such as hierarchies, markets, democracies, and communities. While traditionally organizations have leaned heavily on hierarchies as their dominant organizational model, we have started seeing a shift in approach over the last decade, with the embracing of internal democracies, marketplaces, and communities playing a greater role in the allocation of resources and collective decision-making. We see the same trend of adoption of looser, decentralized approaches taking hold between our organizations. Not only is technology changing how we operate interpersonally, but also inter-organizationally.
The cycle spins us toward a new future
When that group of empowered individuals on Reddit realized they could take down GameStop short sellers, it sparked a realization: What other, greater purpose could they take on next? Open access to information, rapid communication, and trust in systems are shifting what individuals believe is possible and triggering new needs. As consumers, our expectations have increased. We expect instant gratification—we can get any out-of-season food item on a grocery shelf (or delivered to our homes), Amazon packages at our doorsteps in one or two days, and a full library of entertainment options on our phones, televisions, and tablets. We are more empowered to come together quickly, backed by connected technologies and enhanced trust in systems. And our growing global challenges demand the best from all of us.
New needs have always inspired the creation of new technologies and then the behavioral changes adopting those technologies implied. We decide we need to go to the moon, so we develop new rocket technologies and organize a space administration. During the COVID crisis, like many people, I suddenly needed groceries delivered, so our family adopted new technology—Instacart’s grocery delivery system— and since then, my behaviors have changed. I rarely visit the grocery store anymore, except for specialty items.
But what is often overlooked is that these three drivers—need, technology, and behavior—do not operate in a linear fashion. They form a self-reinforcing loop. New technology shifts behavior which in turn creates the possibility of solving new needs. Our ambitions burgeon. Let’s go to Mars! Let me learn to play guitar on a Sunday afternoon, rather than pushing a cart around the grocery store.
We see this recursive force at work now on a larger scale. Suddenly, we realize that seemingly intractable problems (needs) that seemed out of our reach are now solvable, thanks to new technologies and behaviors. In What Technology Wants, Kevin Kelly proposes that technology acts like a living organism, that our devices want to be connected to propel us to a future of realizing our maximum potential. He argues that if evolution were to restart from the beginning, we would see the same inventions and that technology is an extension of biological evolution.
We invent technologies to satisfy our needs and desires, and those technologies invoke new needs and new desires. It is not a linear process, but a never-ending cycle based on rapid change, constant connectivity, and a greater sense of purpose. The futures to which this cycle, and the higher global consciousness they lead to, may take us are too multifold to fathom. But the possibilities are exciting. They form a flywheel driving us toward an era of ecosystems that will ultimately unite us into a new, more interconnected global consciousness, the ultimate ecosystem.
Kaihan Krippendorff began his career with McKinsey & Company before founding the growth strategy and innovation consulting firm Outthinker. His growth strategies and innovations have generated over $2.5 billion in revenue for many of the world’s most recognizable companies including BNY Mellon, Citibank, L’Oréal, Microsoft, and Viacom. He is the best-selling author of five books, most recently the Edison Award nominated, Driving Innovation From Within: A Guide for Internal Entrepreneurs. Kaihan is the founder of The Outthinker Strategy Network, a community comprised of strategy executives from the world’s top Fortune 500 and private companies that keeps him ahead of the pace of disruption and up-to-date on trends, threats, and opportunities across industries.