582: McKinsey's Venkat Atluri, How to thrive in the ecosystem economy (Strategy Skills classics)

The Strategy Skills Podcast: Strategy | Leadership | Critical Thinking | Problem-Solving

Venkat Atluri, McKinsey senior partner and coauthor of The Ecosystem Economy: How to Lead in the New Age of Sectors Without Borders, explains how value creation is shifting from stand-alone enterprises to coordinated networks of collaborators. Drawing on two decades advising leaders in technology, media, and telecom, he outlines what makes ecosystem businesses distinct from traditional conglomerates—and the governance required to make them work at scale.

Atluri emphasizes that ecosystems aren't about diversification for its own sake, but about following a customer-led thread:

"Start with the customer and then follow the thread—what other problems does that customer have that you can solve together with partners?"

Key Insights from the Conversation

• Beyond Suppliers: Many firms mistake a supplier list or procurement process for an ecosystem. Atluri is clear: "A supplier list is not an ecosystem. An ecosystem is about mutual value creation and sharing in the upside."

• Role Clarity Matters: Some firms will anchor the platform, continuously raising the bar for developers and users. Others will participate as contributors, protecting privacy, quality, and customer experience. Scale only comes when "responsibilities, incentives, and accountability" are explicit.

• Discipline in Operating Models: He advises executives to integrate ecosystem thinking into strategy, but then run deeper, dedicated workstreams to define roles, economics, and governance.

• Competition Is Ecosystem vs. Ecosystem: Scenario planning must account for new types of disruptors and ask, "What would an ecosystem leader do here?" Over time, Atluri expects the economy to consolidate into a few macro-ecosystems with multiple micro-ecosystems nested beneath them.

• History as a Control: Symbian and BlackBerry illustrate that large user bases are not moats. "Unless you keep raising the bar on your proposition, you lose."

• Customer Experience Sets the Standard: Consumer expectations now apply in B2B as well: "If something doesn't work out of the box, that tells you the company is focused on itself, not the customer."

🎯 Practical Takeaways for Senior Leaders

• Map a customer segment's biggest problems and use that to prioritize expansion.

• Deliberately choose whether to anchor a platform or participate in one—and align capital and talent accordingly.

• Replace vendor transactions with value-sharing constructs that reward partners for enlarging the pie.

• Establish governance, metrics, and cultural norms that enable collaboration at scale.

• Continuously improve the platform to keep developers, customers, and partners engaged.

Atluri's message is simple but powerful:

"Ecosystems win when they deliver ever-rising value to customers and fair economics to contributors."

Companies that treat ecosystems as procurement exercises will stall. Those that treat them as strategic systems will build compounding advantages over time.

📚 Get Venkat's book, The Ecosystem Economy, here: https://shorturl.at/XawOb

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