New to Platforms? Learn How to Get Them Right

It’s gratifying to see how we’re getting a handle on what it takes to lead and succeed today in an era of big data. We’ve been saying this for some time because the starting point for business model innovation—radical, not incremental—begins with the platform. You will hear a lot about platforms in the next few years but the concept of “the platform” is often misunderstood (trust me, I check whenever I hear the term used) yet they’re actually rather simple: platforms are layers of software that gather and synthesize data to link assets, products and partners together. They’re created to satisfy customer demand, drive innovation, the next best action etc. Get this and you start seeing platforms everywhere and why they are so important.

The easiest example I can think of is the ubiquitous LinkedIn account because, if we’re honest, we all have one. We carefully curate them to say what we’re professionally all about. But LinkedIn quite simply is made up of layers of software that gather data about you, your work and what others say about you and your work. Its clever algorithm predicts when you will be looking for a job and what type of roles to serve up to you based on what you and others feed into it (Ah. Mr. Davis, we notice it’s your 5 year anniversary...we have this wonderful role for you click here.) When you think about it, the collective insight LinkedIn holds over our working lives is staggering, second only to the insights Facebook holds over our personal lives. So last year, it was no surprise that Microsoft splurged a whopping $26 billion on LinkedIn because Microsoft is building a machine for how work gets done in the future. That machine will feature people (i.e. LinkedIn) plus machines (software)—a perfect combination for the burgeoning gig economy, so kudos to Microsoft because I think they got their mitts on LinkedIn rather cheaply.

Seeing platforms as layers of software means you’ll see them everywhere, making our lives easier, simpler and frictionless—that’s the theory anyway. Perhaps there is a layer of software or platform forming around your home right now, gathering data on how you, and your loved ones like to live: Do you have a Nest thermostat or Hive? Perhaps you share your life with Amazon’s Alexa who (who? who! it’s a device!) that understands when to dim the lights (10.38pm) and when to switch on a bit of Coldplay (10.45pm) and when to turn the kettle on for a brew the following morning (7.03 am...no wait it’s a Sunday, 9.17am). Could this very simple piece of AI become the default organizer for our busy lives as the homes we live in become ever thick and rich with data? Will Alexa be the orchestrator par excellence in charge of an eco-system that Amazon (and only Amazon) commands? Now you can understand why Google Home and Johnny-come-lately Apple’s Homepod have brought out their own Alexa versions as an era of platform wars around the home kicks in. Because control the platform and you win...

It’s not just the digital steam punks like Amazon or Google that see the power of the platform. Older, pre-digital companies are beginning to reorganize work around the concept and are rebooting how they create value for the Work Ahead. Check out Bosch, GE and DHL, three large, mature organization whose leaders have pivoted their research and development, production, marketing, sales and competitive futures around the rich flow of platform data generated across their processes. In fact, the future of these companies is being bet on transforming into software powerhouses with the platform—software—the central organizing principle for how work gets parsed and chunked to create value. Take GE’s innovative analytics platform Predix, which applies process data to redesigns workflows for a disparate customer base. As such, it is instrumenting entire value chains, and in its wake, bringing an entire industry ecosystem behind it. Or Bosch’s Software Innovations (BSI) group which provides a cross-company platform to orchestrate an industry push (or rather an industry hold) into its burgeoning Internet of Things activities.

What does this all mean? Well I would argue that those lumbering organizations struggling with legacy business models, bloated cost structures and zombie workforces are, we think, turning a corner. They’re getting “match fit” if you will, for the opportunities ahead. Platforms are starting to become the organizing principle for work while the metabolism for innovation steadily rises as new agile ways of working, collaborating, and partnering proliferate. Last year in our study on the Future of Talent we wrote how the dynamics surrounding talent and power (read decision making) are shifting, and a couple of months ago, we described the new mandate and blueprint for leadership under Relearning Leadership in the Second Machine Age. Enabling people and enabling leaders is part of the journey for the modern, match fit organization but I wonder if there is another bigger lever that needs to be pulled. The dynamics surrounding how we work. Look at our increasingly nomadic work cultures, the growth of gigs, and the rise of talent clusters in many cities around the world which are all changing how we think about place and the space for work. Watch this space...


Redefining Work in the Second Machine Age

We are in the midst of an under-reported work crisis. Not an employment crisis – unemployment levels in the G7 are at historic lows and there are more people in work in absolute terms than ever before.

A work crisis.

We simply don’t know what work is for anymore. It is to fulfill human potential? Is it to be morally virtuous? Is it to keep the devil at bay? It is to fill the hours? Is it to have purpose? Is it to pay the bills? Is it because we can’t think of anything better to do?

Why are we working? What’s the point?

Some people love work but the vast majority don’t. For them they work to live, and work is exactly that - work. Many of these hundreds of millions of people around the world do what David Graebar of the London School of Economics calls “bullsh-t jobs”; pushing paper, filling out forms, having inconsequential meetings – doing work that, in Greabar’s words, “they think is unnecessary”.

Why?

Of course, the simplest reason is for money. Other than inheritance, winning the lottery, or robbing a bank, work is the way we get the money we need to pay for the things we need to survive and thrive. For 20% of modern western societies this arrangement works pretty well. Do ok in school, get a decent white collar job, and life is reasonably good. But for more and more people work doesn’t work at all. For these people, work in 2017 means longer and longer hours for lower and lower wages, with less security, and less prospects. Secretly as well, many of the 20% lie awake in the wee small hours of the morning, worrying about just what the hell they’re doing with their working lives ...

Modern capitalism is predicated on the concept of efficiency; modern societies have become extremely efficient by reducing the labor component of the production of any good or service - by de-skilling jobs and driving wages down. People in insurance back offices, production lines, and supermarket check-outs have been reduced to doing rote, repetitive, boring tasks that see them end up as little more than robots. This is their work; being a quasi-robot. Trying to eke out a living in markets that see them increasingly as surplus to requirements. As a balance sheet liability, not a societal asset. No wonder they hate their work.

And now to make things worse real robots are showing up. Not human imitations of robots but the real thing.

Already, robots make most cars. Now software trades most shares. Soon algorithms will read most MRIs.

In the next few years machines will do everything that people do today to make money.

What happens then? What is work in a world where humans won’t be needed to make things, sell things, move things, service things, even create things?

Will the only work available for people be oiling the Terminator?

Will the majority of people end up living on a Universal Basic Income a.k.a. The Dole 2.0?

Will “the people” rise against their capitalist overlords and the unenlightened bourgeoisie?

Will there be blood?

To fully understand the future of work we have to start with an understanding of the history of work.

Through the years there have been 11 major ideas of what work is;

1 Subsistence – staying alive was a full time job.

2 Slavery – Romans and Greeks (and Americans and Englishmen) owned slaves who did the work.

3 Militarism – taking a King’s Shilling was the most common form of work for thousands of years.

4 Usury – before they were kicked out of the temple money lending was popular work.

5 Servitude – Henry VIII didn’t own slaves (nor did Lord Grantham of Downton Abbey) but his servants did the work.

6 Calvinism – work (even in its lowliest forms) was morally righteous; with a Protestant work ethic working took you closer to heaven than kings or cardinals could ever reach.

7 Capitalism – the invisible hand was the route to the riches of heaven in the future and the riches of earth now.

8 Communism – work was a tool of capitalist pigs. Collectivism was not work but joint ownership of the means of production.

9 Yeomanry – Pa Ingalls didn’t have a job but worked (hard) for himself.

10 Fordism – Charlie Chaplin worked as a cog in an auto production machine in Modern Times.

11 The Office – from The Man in the Gray Flannel Suit to Michael Scott of Dunder Mifflin the modern world of work has had a decent run. But it is coming to an end. In the manner that 2% of the population now produce all the food we need to eat, in the near future a small percentage of the work-force will process all the mortgage applications and insurance claims that society makes – artificially intelligent software will do 90% of the work.

Now we need a new, twelfth idea about work. Modern, bourgeois, white collar work, that some consider a Platonic, idealized norm which will continue indefinitely, is hardly that at all. Working in an “office” may come in short order to be seen as antiquated as working below stairs in an English country house.

Now we need to re-conceptualize what work is in our Second Machine Age. Many people sense this ... but few have any clue as to what that new idea is.

This new, twelfth idea is currently nascent, but is fast emerging from a Precambrian soup of the following ingredients;

  • Hyper-localization – the new frontier after the “false song of globalization” is your doorstep.
  • 3-D production – print your new sneakers (in minutes) or your new home (in hours) in your local Staples.
  • Self-actualization and “experiences” – concierge services on steroids from Airbnb will let you realize your dream of being a French vineyard owner, or winning Wimbledon (in virtual reality) or walking to the South Pole. Pursuing higher Maslovian order activities will sync chic and geek.
  • Platform based barter – I trade a day of my Ruby on Rails coding for your three hours of legal contract review; no monetary exchange necessary/no IRS involvement required.
  • Open source commerce – if Linux can be made by thousands for free, why can’t all software? All products?
  • The creative commons – copyright be damned; all property is theft.
  • The sleep renaissance – Margaret Thatcher was wrong; sleep isn’t for wimps, it’s for those who believe that living well is the best revenge.
  • The 4 Hour Work Week – John Maynard Keynes was 87 years too early; machines should let us work less. Even less than 15 hours, as Keynes suggested; maybe just four hours, as Tim Ferris boasts.
  • Bitcoin and Ethereum – disrupting the hyper-financialization of society with new forms of wealth storage and exchange.

All of which will be served with a re-mix of ideas 1, 8, and 9 from above, i.e. post work subsistence, collectivism, and digital yeomanry.

Work is the foundation of modern society; everything else that we value, treasure, dream of, take for granted, worry about is based on work. Without work things fall apart. The rise of nationalism and anti-globalism is a direct consequence of this slow motion work crisis which has been gathering momentum, but has gone largely unacknowledged, for the last 40 years. Populists promise a return of work – without bothering to point out that the work being offered was, and will be, terrible, and would be short-lived anyway due to advances in new technologies. Tone-deaf elites proffer salvation through education, not stopping to weigh the fact that old dogs struggle with new tricks. Especially ones that cost thousands of dollars to acquire.

At its simplest, the time is right for a new idea of what work is and what role it should play. The twelfth idea – whatever it becomes when fully realized, and whatever it comes to be known as – is an idea whose time has come. Not a moment too soon.

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Digital and Personal Transformation in Rwanda

Ten bags!  Those are what we carried back from Rwanda, a small, mountainous country in east equatorial Africa last night.  Why? The short answer is we have friends in Boise, Idaho with family and friends in Rwanda.  We took 7 bags to Rwanda, but unexpectedly returned with 10. Our refugee friends that have been resettled in the USA pine for familiar things from the region.  Now that they have jobs and money in the USA, they put in orders with their family and friends for the things they miss most.  So much for traveling light!

While in Kigali, Rwanda I had the honor of speaking to a number of government ministries and most of the large banks about digital strategies.  Not so much digital transformation though.  How do you talk about digital transformation when digital is so new to Rwanda?  That is the question Professor Michel Bezy challenged me with, when I was the guest lecturer at the Master of Computer Science program at Carnegie Mellon University Rwanda.  Professor Bezy continued, here in Rwanda we are implementing digital for the first time.  We have no legacy IT systems to hinder our progress.  Wow!  I think many IT departments in western industrialized countries right now would envy that situation.  Most of the biggest IT problems in the west now are digitally transforming legacy systems.  It’s like running a race while dragging an anchor.  It is often the biggest obstacle a company faces.

Put yourself in a Rwandan's shoes.  How would you design and develop an IT environment differently if you started from a blank sheet, a white canvas like they are doing? It is a fun thought exercise.

For a small landlocked country like Rwanda, digital changes everything.  The disadvantages of moving physical products in a landlocked country disappear with digital products and services.   The recent completion of 5,000 kilometers of fiber optics cable now makes mobile and Internet services available across much of Rwanda.  Now to get electricity!  Electricity is not yet available to 74 percent of the households, but they are improving.  I am fascinated by the fact that more households have mobile phones (approximately 70%) than electricity (less than 30%).  In fact, households with Internet nearly equal households with electricity.  I watched as school children lined up at a school office to retrieve their parent’s mobile phones after school.  They were all being charged in the school office because they had no electricity at home.

While traveling back and forth across beautiful Rwanda visiting schools, refugee camps and kids that we sponsor through Africa New Life, http://www.africanewlife.org/, I was keenly watching and pondering the challenges of living in a developing country where over 80% of the population are rural farmers.  I observed the work.  I spoke to farmers.  It is a MASSIVE amount of work to feed a family.  Basic tasks like getting water for your family to cook and clean often require herculean efforts in a country of a thousand hills, little running water, and that by necessity has made vertical farming an art form.

While watching the farmers it occurred to me how much work living can be.  I recognized that digital transformation can significantly impact individuals in East Africa as well as industries in the west.  The Financial Times’ David White gives this example of the painful work involved in just completing normal activities, “Registering a land transfer in an outlying village in Rwanda requires a number of journeys — to the nearest subdistrict office to get forms to fill in, which then have to be notarised, to a bank to pay the notary’s fees, then back to the government office, probably returning later to check the status of the process."*  All of this is likely done on foot or bike and will take all day.  This process and many others today can all be done on mobile phones, which save days worth of precious time.  

Just feeding a family takes all day.  Getting water can take a half a day.  Walking to town can take half a day.  Walking to and from school can take half a day.  It is life draining work to survive in the mountains far from schools, towns and markets.  This point was burned into my consciousness over and over on this trip.

While speaking at a gathering of banks and financial services companies at the beautiful Serena Hotel in Kigali, a senior official of the Rwandan Tax Authority demonstrated to me how SMEs (small to medium size enterprises) can now register and pay their quarterly taxes all on basic mobile phones.  It was very impressive.  We don’t even have that capability in the USA!  It can save hardworking entrepreneurs the need for endless travel.

Another innovation that I read about, but did not yet see at work, is the simple idea of the Hippo Roller, https://www.hipporoller.org/.  Using a simple design and elementary physics to roll water instead of carrying it (often on your head) saves so much energy and pain. See the video - https://youtu.be/YUsKjleOopk. Everyday I saw men, women and children excerting great effort carrying heavy loads of water miles to their homes.  Making this easier and faster could free up calories and time for more economically productive activities.  I hope these are as effective and useful as they appear.  Although losing the handle on a steep climb could cause some angst I fear.

I left Rwanda pondering how hard it is to live as a rural farmer.  I was impressed by the skills, ingenuity and innovation I witnessed just to feed, educate and house a family on the sides of these breath-taking mountains.  Mountains, mountains everywhere!

Rwanda is looking at all solutions.  They are pushing for farmers to seek economy of scales in agriculture.  They are organizing small subsistence farmers into cooperatives so they can share the work and costs of farm equipment to improve their overall productivity and incomes.

Rwanda is small, and with a population of 12 million, it is the mostly densely packed country in Africa.  However, with focused efforts over the past 5 years they have lifted over 1 million of their people out of poverty.  They are now one of the fastest developing nations in the world, and all of this is happening just 22 years after the devastation caused by the genocide where 1 million of their people were murdered in a 90-day period. This is an inspirational example of true transformation.

More on Rwanda’s Development

World Bank http://www.worldbank.org/en/country/rwanda/overview

Forbes: The Surprising Story Behind The Worlds Fastest Developing Countries, by Robin Meyerhoff, Senior Director, Corporate Affairs, SAP, http://www.forbes.com/sites/sap/2016/06/27/the-surprising-story-behind-the-worlds-fastest-developing-country/#238628b372d6     

*Rwanda’s Vision of an ICT-Enabled Economy, http://www.ft.com/cms/s/0/fc318106-deda-11e4-b9ec-00144feab7de.html#axzz4K8LMqocP