How soft is business ecosystem creation?

Electric vehicles (EV) seem to be the only reasonable future replacement for what we call car today. Everyone seems to agree on that. Still, the amount of EVs on the streets is still quite close to peanuts. The reason for that is the lack of a supporting service ecosystem, i.e. the fact that the “tipping point” has not been reached yet. The Tekes project EV-ACTE has investigated the role of the soft strategies in creation of an ecosystem around EVs. The project researchers have recently reported results in a series of interesting presentations. The two concrete examples of soft strategies that the EV-ACTE project researchers have studied are affective influence and narratives.

Doing is better than talking

Affective influence is a process of actively influencing people’s affective reactions. One way this could be done is through embodied affective influence. E.g. instead of “doing a lot of political talk” (Vuori, Huy 2015) to the decision makers in the EV ecosystem, one puts them e.g. into a real driver’s seat and lets them test drive an EV themselves. What is said is left to the recipient of the information to interpret and a lot of things remain unclarified. This in turn leads to making decisions under uncertainty. As shown by Laureiro’s presentation (2015) this falls into a mode of exploration, i.e. a mode where decision maker needs to think long term, plan, be creative and exercise more dynamic behavior switching. This is proven to take a lot of human brain’s energy and is therefore not so easy to do (Laureiro, 2015). On the other hand, by experiencing e.g. driving an EV first hand, one can reduce the feeling of uncertainty and shift the decision making into the mode of exploitation. This is mode where one needs to deal with incremental changes and decisions, and engages different parts of the brain, the ones that deal with learning, memory, and persistence, which seems to consume less energy and is therefore easier to do.

If you have to talk – do it with passion

Another way to build affective influence is through using rich and vivid language that is close to the regular human being, as opposed to using “analytical information and getting the facts straight” (Vuori, Huy 2015). Narratives, as explained by Gustafsson and Rowell (2015) are “how we interpret the world”. Established car makers, for example, interpret the world of EVs as “the next step in vehicle production”. For Tesla, on the other hand, EVs are “innovation in batteries and energy that can be applied to any product” (Gustafsson, Rowell 2015). There seems to be a slight difference, right?

EVNarratives

Venture narratives of established car makers vs. disruptor (Gustafsson & Rowel, 2015)

Co-produce, rather than blindly show the way

Yet another way to build affective influence is by generating perceptions of participation with different stakeholders, as opposite of being explicit of company’s own top-down dominance and others being followers. This also strongly resonates with service logic which has service co-production with the customer as one of the fundamental principles (Lusch & Vargo, 2014).

It is proven – it pays off to be soft!

Both of the researched company clusters had nearly equal starting points, and had promising businesses in the beginning. However the companies that adopted affective influence approaches managed to attract more partners and thereby to build a business ecosystem than the ones that did not “care” about affective influence. Some of the partners simply stopped working with the later and started working with the “emotional” and “passionate” company. This, although indirectly, also serves as a validation to some of the service logic principles. It pays off to be soft!

 

AffectualInfluence

Influencing business ecosystem creation process by means of affective influence (Vuori&Huy 2015)

Sources:

Timo Vuori, Quy Huy (2015). Affective Influence in Ecosystem Creation, in Soft Strategies in Business Ecosystem Creation: Narratives, Cognition and Emotions workshop, November

Robin Gustafsson (2015). Venture Narrative Strategies in Emerging Ecosystems, in Soft Strategies in Business Ecosystem Creation: Narratives, Cognition and Emotions workshop, November

Daniella Laureiro-Martinez (2015). Strategists’ brains: cognitive neuroscience and strategic management, in Soft Strategies in Business Ecosystem Creation: Narratives, Cognition and Emotions workshop, November

Lusch, Robert F.& Vargo, Stephen L. (2014). Service-Dominant Logic. Premises, Perspectives, Possibilities. Cambridge University Press, UK

 

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