Long story short, as Adrian put it: “Platforms are the future of business. I’m convinced and so are a lot of people who are much smarter than me.”
The longer story is the extremely worthwhile talk in the video above, given by John Hagel, co-founder from Deloitte’s Center for the Edge.
If you have the time, watch it.
If not, here’s Hagel’s imperative to business leaders in 26 oversimplified bullets.
- The pace of change has never been more rapid than it is today, and it will never be slower than it is today.
- Two macro-forces are systematically reducing global barriers to entry: a) Exponential improvement of digital tech infrastructure, and b) global public policy shifts are enabling products, ideas, people, and material to move readily across borders and industries.
- Since 1965, Return on Assets has declined by 75%, and there’s no end in sight.
- Companies today mostly operate in a push-based model, trying to predict and exploit demand.
- This works great if you can predict the future.
- It’s become very difficult to predict the future far enough in advance to take advantage.
- This is why tomorrow’s winners will be those who learn faster and apply learning fastest.
- As it becomes more difficult to predict the future, companies in push models squeeze harder and harder for efficiency, which over time will become unsustainable.
- It’s imperative that companies move to operating under a Pull-based model.
- A Pull-based model means adapting faster, drawing out the right resources at the right moment to seize unexpected opportunities or put out unexpected fires.
- The Deloitte Center for the Edge has defined three types of Pull for moving to a pull-based system.
- Access: How do you, when you have a particular need, find that person or resource very efficiently? Google is a classic example of a pull-based access platform.
- Attract: How do you attract people and resources that you didn’t even know existed to help solve unexpected challenges?
- Extract: How do you pull out of each of us, out of individuals and institutions, more of the potential that’s readily at-hand.
- Platforms accomplish those types of pull well, but what kinds of platforms?
- Four different types of platforms have emerged to help companies adapt, learn, and solve problems faster.
- Aggregation Platforms – stockpiling resources in one place that can be accessed easily. Think database or marketplace platforms (ebay, etsy), or crowdsourced problem solving.
- Social Platforms – aggregating people, creating environments where users develop relationships around common interests, backgrounds or pursuits (Facebook, Twitter, LinkedIn).
- Mobilization Platforms – aggregating people to accomplish a shared goal, to solve a problem that requires lots of participation (open source platforms).
- Learning Platforms – aggregate people in many small groups, accelerate learning and performance by making it easy to draw out information of other groups. Build new tacit knowledge that is easily searchable. Think World of Warcraft.
- Typically, the more experience you get in a market or industry, the harder you must work to achieve the next curve of performance improvement.
- Platforms can help flip the performance curve, where the more participants you get involved, the faster value gets created.
- Learning platforms, particularly ones where users improve faster than they could on their own, produce incredible loyalty.
- Deeper loyalty makes it easier to grow users organically, and more users help create more rapid feedback loops to learn how to improve the platform and scale.
- Companies that flip the performance curve through the power of the platform will win.
- Companies that do not figure it out “will be increasingly marginalized and pushed off the playing field”.
Lastly, again, thank you to Adrian Ho for sharing his reaction, as well as John Hagel for the brilliant talk at the #MITSummit. We hope we didn’t oversimplify the very well thought-out argument. For anyone who wants the whole story, enjoy the talk at the top of this post.
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