Company as a platform: a key concept for technology-enabled strategy
Last week I gave the keynote on Technology Leadership in an Accelerating World and chaired the C-Level Executive Luncheon at the Oracle Impact conference in Bangkok, Thailand.
After the lunch roundtable more than one CIO told me that the ‘Company as a platform’ concept I’d put forward during my keynote had resonated strongly with them.
Platform strategy is at the core of much of my work. While platforms are becoming much discussed by boards and executives, the key issue they need to understand is that in a network economy, platform concepts are not just about business strategy, but highly relevant to many different inter-linked domains: business models, technology development, talent structures, marketing, organizational communication, and more.
CEOs who describe their companies as platforms
The idea of ‘company as platform’ hasn’t been widely discussed, however the CEOs of a numnber of the world’s most successful corporations see their companies as platforms.
Zhang Ruimin, CEO and Chairman of the highly innovative and successful Haier explicitly describes the core model for the company as a platform.
Starbucks founder Howard Schulz has said “We really think of Starbucks as a platform”, both in the context of a social and political platform as well as in its business models, which include licensing stores.
Amazon.com CEO Jeff Bezos says
“we are creating powerful self-service platforms that allow thousands of people to boldly experiment and accomplish things that would otherwise be impossible or impractical”
Of course every aspect of Amazon.com is framed implicitly as a platform, as many have pointed out.
This ‘company as platform’ frame is not just relevant to these innovative giants, but should be at the heart of strategic thinking by almost every organisation.
Building open infrastructure
One of the elements at the heart of any successful platform is ‘open infrastructure’ – the means by which people or organizations can link in to the platform and participate in the value-creation ecosystem.
This requires careful design, including technologies that enable external information flows while maintaining security, and making it easy for customers, suppliers, partners or others to use the system and if appropriate integrate into their own information systems.
The concept of company-as-platform is often aligned with the concept of the ‘API-enabled enterprise’.
FedEx, for example, has implemented a host of APIs for its customers, suppliers and partners, positioning itself as the platform for a broad delivery ecosystem.
The IT functions of other companies such as Coca-Cola are focusing on providing APIs to core systems so that their business units can build their own applications, making IT a platform for internal use.
Haier’s Zemin notes that:
“We have three kinds of people at Haier: platform owners, SME (small and micro enterprise) owners and SME members. Platform owners establish platforms to do two things: first, reshuffle the traditional organisation and procedures into one based on the Internet’s structure; second, ensure that the best resources flow in without obstacles and there is maximisation of the various parties’ interests. When you have that layer of platform owners, that prevents the entire system from falling apart.”
This more complex structure is relevant in an explicitly platform-based business, however as companies begin to shift to platform models they will need to design and redefine roles to enable and support platform structures.
Technology-enabled business models
While there are many manifestations of ‘company as a platform’ in business models and beyond, almost all of these are enabled by technology, in providing an open infrastructure that allows participants to connect and create value.
As such technology leaders and business leaders need to work closely together to frame what is possible, build relevant governance structures from the outset, and implement platforms that are technology-enabled, but ultimately structures for value creation within and beyond the enterprise.
This post just touches on some of the emerging potential of platform thinking and structures to drive value; I will delve into this topic more in later posts.