The roles of performance measurement and management in the development and implementation of business ecosystem strategies

Abstract

PurposePerformance measurement and management (PMM) systems have traditionally enabled strategy execution within and across firms. However, PMM have been criticized as overly static and deterministic and therefore inappropriate for emergent and dynamic contexts, such as those that characterize business ecosystems.The study aims to address the roles of organizational PMM practices in the development and implementation of business ecosystem strategies.Design/methodology/approachThe authors carried out a qualitative, longitudinal study during 2016–2020 at a Japanese multinational technology corporation attempting to create an ecosystem strategy to expand its market and diversify its offering. The authors collected interview, observation and archival data, spanning the period from framing the initial strategy to establishing the ecosystem.FindingsThe process of developing and implementing the ecosystem strategy was emergent and highly iterative, rather than planned and linear, eventually requiring key decision-makers in the company to challenge some of their deeply held assumptions. PMM practices first acted as barriers to ecosystem development by promoting an excessive focus on revenue generation. Once modified, PMM helped capture, convey and reassess the ecosystem strategy. Performance targets, indicators and strategy maps were not just data gathering and reporting mechanisms but key means to express competing perspectives.Practical implicationsWhen developing an ecosystem strategy, managers should adopt a participatory and iterative approach, reviewing the complementary effects of various PMM tools at different points in time.Originality/valueThe study is among the first to provide an in-depth account of ecosystem strategy creation and implementation and to identify the diverse roles and effects of PMM practices in dynamic and complex contexts.