Liberating platform organizations
The platform is rapidly becoming the dominant business model for the 21st century.
Giant platform organizations increasingly own the digital infrastructure on which everyone else has to do business. The digital Titans – Amazon, Google and Facebook in the West and Alibaba, Tencent and Baidu in the East – aim to take a cut of all our digital commerce. Their scale and reach mean they also exert systematic influence on our access to information and therefore shape how we act on it. Regulators struggle to control these shape-shifting giants. Governments find it difficult to tax their jurisdiction-hopping revenues. Investors talk of a ‘kill zone’ around them, where startups are eliminated or bought at a low price. Increasingly, CEOs fear the day when one of them enters their market. Yet there is hope for us all. Brownfield businesses are fighting back with platform plays.
Platform organizations generate more forms of value, at lower cost than a traditional business. But they are challenging to make work at scale, and especially tricky for existing, brownfield organizations. The vast majority of platform initiatives fail. Much of the problem is that there is little clarity about what platform organizations are, the value they create, how to build them and what makes them successful.
At LEF we believe it is possible to liberate organizations from the tyranny of the Titans, liberate platforms from the constraints of traditional businesses, and liberate platforms in society to solve ‘wicked’ problems. Our report Liberating Platform Organizations aims to help brownfield organizations to create or transform themselves into platform organizations and to anticipate the moves of their digital-native competitors. There is a potential platform right next to you. Will it be your firm, your community, a startup … or one of the Titans?
We have constructed the report into four parts, initially published in instalments:
Part 1, The Platform Organization Landscape, helps aspiring platform initiatives understand their potential and get started. We lay out the components that make up a platform organization and its ecosystem in a ‘landscape’. We also cover the fundamentals of the platform business model and ecosystems, and the future structure of platform-intensive industries, to help you decide where you are going to play in the new platform landscape.
In Part 2, The Machinery of Platform Organizations, we examine the symbiotic relationship between platform organizations and digital platforms. Platform organizations have to transact efficiently, innovate constantly and evolve quickly; they need a digital platform to enable and integrate these fundamental capabilities.
Organizing as a platform can create new financial efficiencies, involve citizens more deeply in the creation and improvement of services, or even solve a ‘wicked’ problem in society. But building a platform is hard, and much harder in an existing organization than a start-up. It involves broad, deep change involving multiple organizations. In Part 3, we study The Brownfield Platform Journey.
Successful platform organizations are masters of ecosystem gameplays. In Part 4, Platform Organization and Ecosystem Gameplay, we show how platform organizations and regulators can build market-shaping strategies from four different categories of gameplay.
These will be released at intervals throughout Summer 2018. We will also publish pieces that develop aspects of the report in more detail, such as the pattern of platform formation in key sectors and a lexicon of platform terms.