Building a Powerful Ecosystem: The COO’s Guide to Scaling Tech in the Government Sector

Hoping to scale? You need an ecosystem.

In today's rapidly evolving business landscape, technology companies aiming to scale—especially those targeting the government sector—must master the art of ecosystem building. This approach is crucial for navigating complex markets, accelerating growth, and delivering enhanced customer value. Here's how COOs can create and leverage powerful ecosystems to drive their companies forward.

Define Your Ecosystem Strategy

An effective ecosystem isn't just about reselling or channel partnerships. It's a multifaceted network that can include:

1. Technical partners
2. Consulting partners
3. Solution providers
4. Managed service providers (MSPs)
5. Customers
6. Boutique partners
7. Regulatory bodies

The key is to move from transactional relationships to interactive ones. The more interactive your ecosystem, the better your advantage in moving fast and bringing offerings forward.

Understand the Ecosystem Imperative

As Jeff Frazier, a tech and public sector industry veteran and friend of mine, said when we talked recently, "You just cannot be successful in today's global enterprise geopolitical environment without having a strong ecosystem. The world is too complex, government entities too diverse, and who decision-makers listen to varies too much. Expecting any one company to know everything is just unrealistic." A network of partners, providers, and opinion leaders, on the other hand, allows companies to move fast, adapt quickly, and represent customer viewpoints more effectively.

At this point, most successful companies in our data-driven era go to market with robust ecosystems. For example, the automotive industry, currently valued at $3 trillion, could expand into a $6.5 trillion mobility ecosystem by 2030. Similarly, the US healthcare industry could see a $1 trillion revenue shift in the next five years as it adopts an ecosystem-driven structure (PwC, 2023).

Start Small, Think Big

For startups and growing companies, the idea of building an ecosystem can seem daunting. The solution? Start incrementally. Focus on creating partnerships that help you:

1. Scale faster
2. Combine services to enhance customer value
3. Enter new categories
4. Create competitive barriers
5. Build stronger relationships

Remember, you don't need to build everything at once. Take "bite-size chunks" and organize them around your core offering.

Navigate the Government Landscape

The government sector presents unique challenges and opportunities. It's highly regulated, complex, and dominated by established ecosystem partners. To succeed:

1. Understand the regulatory environment and entry requirements
2. Navigate the incumbent ecosystem carefully
3. Represent the customer's point of view effectively
4. Set realistic expectations for performance and time-to-market

Assemble the Right Team

Building an effective ecosystem requires a mix of skills:

1. Subject matter experts
2. Programmatic enablement specialists
3. Team members who understand partner perspectives

Avoid common pitfalls like treating partners merely as a fast track to customers. As Frazier emphasizes, "The channel is a customer. So you have to understand and represent their points of view also."

Focus on Mutual Value

When selecting partners, prioritize discovery. Understand your own value proposition clearly, then seek partners where there's mutual benefit. Avoid being drawn into lengthy explorations with big-name partners unless there's a clear fit and path to revenue.

Measure and Iterate

Continuously assess your ecosystem's performance in terms of:

1. Time-to-market acceleration
2. Cost reduction
3. Quality improvement for end customers

Use these metrics to refine your approach and partnerships over time.

Building a powerful ecosystem is not just about expanding your network—it's about creating a force multiplier for your business. According to PwC, leading companies are 1.6 times as likely to leverage ecosystems to gain competitive benefits, including access to new customers and markets. These companies are also 1.7 times more likely to be faster to market, 1.2 times more agile, and 2.3 times more innovative than their peers (PwC, 2023). By thoughtfully constructing and nurturing these relationships, COOs can position their companies for exponential growth, even in the complex government technology sector. Remember, in today's interconnected business world, your ecosystem could become your greatest competitive advantage.

Full reference:

PwC. "Tapping ecosystems to power performance," by Lang Davison, Tom Archer, and Wayne Borchardt. April 12, 2023.

See the original article in Fast Company here.