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Alibaba strategist Ming Zeng explains how the company operates its “smart business” in the era of business ecosystems

Alibaba today presents a vivid picture of the new business world emerging, one that operates using the data generated by the network of participants, as processed by machine learning, to automatically respond to customer behavior and preferences in real time.

At Alibaba link after link in the value chain is being modularized and reconfigured into technologically optimized networks and much of business decision-making is powered by algorithms.

Creativity becomes the crucial productive factor and thus the purpose of an organization is to enable, rather than manage creative people.

<abstract_text>In the emerging world of “smart business,” entrepreneurs and strategists must learn to assess the entire network as a whole when deciding how to position their business and create value. Then the strategy making process is one of generating, coordinating and modulating experimentation

This “Masterclass” for corporate leaders aims to explain how to integrate three revolutionary approaches to business innovation to stimulate and propel the creativity that remains latent in and around most organizations.

Veteran “Masterclass” author Brian Leavy believes that collaborative innovation is the new corporate imperative and explains how three sets of revolutionary thinking and practices – design thinking, value co‐creation and the power of “pull” – can create new opportunities for businesses.

The paper reveals three key lessons: within the world of business, the design perspective is now being applied to a much wider range of challenges beyond the traditional concerns of product aesthetics and ease‐of‐use, including the search for innovative strategies, business models and organizational structures and processes; the core principle of co‐creation is ‘engaging people to create valuable experiences together while enhancing network economics; and organizations need to learn how to “pull” together, and mobilize as needed, the resources to meet the demands of more engaged consumers, responsively and flexibly as they unfold.

Instead of thinking about “what to build,” prototyping is about “building in order to think,” and the prototyping process itself “creates the opportunity to discover new and better ideas at minimal cost.”

This “Masterclass” offers leaders a lesson on how three revolutionary ideas about business innovation complement each other.

This paper aims to present an interview with Deloitte researcher John Hagel III, the co‐author of The Power of Pull and co‐chairman of the Deloitte Center for the Edge, which conducts research and develops concepts for new corporate growth.

The paper presents the views of Hagel on how to help managers understand how the concept of “pull” – the management model that draws out people and resources as needed to address opportunities and challenges – can be systematically used to shape serendipity and drive more rapid performance improvement.

Hagel and his research colleagues found that the global center of innovation is shifting from the West to China and India; that the innovation that will matter most in the next wave of competition is neither product nor process innovation, but institutional innovation. This perspective extends the concept of management innovation beyond organizational boundaries to innovation networks.

Hagel foresees that the early phase of transformation will be largely a bottom‐up phenomenon and that the full promise of the “pull” concept will be its potential to generate “increasing returns” in performance, and ultimately reshape markets and industries.

The interview identifies the persistent failure of today's organizational forms to generate high‐commitment, high engagement cultures as the primary institutional innovation challenge and opportunity. The interviewee, Hagel, warns practitioners to prepare because the transition from a world of “push” management models to one where the “pull” model has an advantage is inevitable.