[In a business environment with accelerating rates of change, the power to compete and win is shifting radically from corporations to ecosystems, from leveraging internal assets to accessing external networks, from a traditional operating focus on efficiency to dynamic open innovation. Welcome to the Collaboration Economy and the new source of competitive advantage for firms that want to thrive in our new business climate.
With many cross-industry projections saying that we will see more change and innovation in the next three to five years than we have seen in the past thirty years, firms need to be less insulated and become more synergistic. No one company and management team in isolation can practically keep up with the hyper-changing complexity of our modern business world.
Firms need to leverage their knowledge and experiences with others fighting the same fight or addressing similar challenges. Deeper connections need to be formed between firms that can lead to an ecosystem of resources built on mutual interests. These ecosystems tend to function as open platforms adding substantial new capabilities to all. It is now up to how firms can creatively connect with one another that determines how successful they can be. This puts a whole different spin and a new reality on what “networking” really means and how it is being strategically applied to meet today’s challenges.
Greg Satell—a transformation and change expert, top innovation blogger and bestselling author of Mapping Innovation and Cascades: How to Create a Movement that Drives Transformational Change—has done extensive work in exploring and writing about this new business dynamic of platforms and ecosystems. His blog is a great resource on the topic and the mindset you need to take advantage of this trend:
“In an age of disruption, the only viable strategy is to adapt…The objective is no longer to claw your way to the top of the heap, but to nudge your way to the center of the network…Successful enterprises can no longer prosper merely by deploying assets efficiently, but must effectively manage and deepen connections…In a networked world, the best way to become a dominant player is to become an indispensable partner.”
To dig deeper into the mechanics and strategy of building your company into a platform and developing an ecosystem, we reached out to Institute founding member, Mark Spina, president and COO of FLX Networks—a financial services technology platform and membership community. FLX is actively building a “network of networks” through their new community platform, which is designed to revolutionize the working relationship and experience that occurs between asset managers, financial advisors and wealth management firms. We asked questions to better understand how platforms can help us access technology, talent, current insights and strategic partners and how this can dramatically change the ways we can successfully compete in our rapidly changing industry environment.]
Bill Hortz: What were the strategic decisions behind building your firm as a platform?
Mark Spina: The financial services industry faces a generational transition away from its traditional engagement model, which has been interruption-based and heavily dependent on this high-cost implementation model, grudgingly accepted by the asset managers along with their target audience of wealth management firms and advisors. A crosscurrent of macro events, including the pandemic, technological innovation and regulatory evolution have created the necessary momentum for a more invitation-style of engagement and experience to be introduced through a community platform.
Importantly, the competitive pressures are transitioning the industry from sourcing a myriad number of specialized business solutions and vendor firms to looking for strategic partners that can consolidate and integrate the many resources now available. Simply put, specialization has delivered many incredible innovative solutions, but it has also delivered increasing costs (due to more tools and services), complex tech stacks and an overwhelming number of vendor relationships. Both asset managers and wealth managers seek scalable relationships that creatively serve their business needs, while reducing the number of partnerships and time required to maintain them.
Hortz: How does a platform structure allow you to address the challenges you see facing financial services firms?
Spina: FLX Networks’ purpose-built technology platform is designed to create a more economical and sustainable distribution experience with less friction and inefficiency between asset managers, wealth management firms and financial advisors. Through our proprietary technology, we have built a community platform that provides access to a business services marketplace, an aggregated open-architecture asset manager content marketplace, an asset manager exchange and a social network facilitating the sharing of relevant professional practices and experiences.
Each vertical of our permissions-based platform allows access to a combination of tools, personnel, technology, strategic relationships and products to help drive a more cost-effective, on-demand and sustainable business model. Our approach simultaneously delivers the scale of the largest corporations in the marketplace today.