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...