Welcome to the platform thinking era

Platform Thinking

When you think about “old-school elements of business that went away, subsequently scaring executives,” you’re really talking about platform thinking. Business used to be about resources you controlled and market power/position. That’s almost entirely not the case anymore. Business was once dominated by asset-builders; now it’s dominated by a group some have called “network orchestrators.” Consider the case of what marketers need to do, too: for decades, it was about “power branding.” Now it’s much more about developing customer relationships and stories. Most CMOs and marketing middle managers still operate in the “power branding” mindset and worry about “their campaign assets.” Meanwhile, someone is tweeting at the company’s Twitter account about an issue and that’s going unresolved. In 2017, that stuff is how you lose business. A campaign will probably get lost in the ether, in all honesty.

This business shift is tied to the idea of platform thinking. Instead of viewing your company as a group of tangible + intangible assets, now you need to think of it as a platform. That’s really hard for a lot of seasoned executives. If you came up one way and that made you and your company successful, pivoting to a completely new way of thinking is a challenge. It honestly terrifies many of these guys. As a result, they kick it to HR, where it usually dies a relatively-lengthy death at the hands of process, forms, and compliance. Whenever Sally from HR begins to “own” a change management process, you immediately know 74% of the company will never care. People listen to Sally re: compensation and potentially getting fired. They do not want Sally owning strategy. We’ve been talking about empowering HR (and Sally!) for decades now. Still hasn’t happened. Why? Because to be completely honest, no one cares. People are comfortable vaguely understanding who “owns” what, and HR doesn’t own “revenue-driven strategy plays.” The COO or CEO needs to “own” that, right?

This all creates a giant loop. Companies and leaders maybe kinda sorta understand they need to change, but they go about the process all wrong. Ever had a CEO stand up at an all-hands and basically completely change the direction of the company in a single speech? I’ve seen this happen three times in my life. “We are a data-driven company now,” he squeals. Everyone returns to their desks. Is everyone now working on data projects? Of course not. They’re doing exactly what they did before that meeting. You can breathlessly set “strategy” until the cows come home, but unless it’s aligned with execution, not an iota will change day-to-day.

Platform thinking straight-up terrifies a lot of high achiever executives, because now “control” — which is what most people really want from work — is out the window, and somehow it’s about platforms and ecosystems. What?

Platform thinking and ecosystems

Greg Satell lays this out nicely in an article called “Today, Every Business Must Transform Itself Into A Platform.” He sets it up as three ecosystems:

  • Talent
  • Technology
  • Information

Seems logical. You need good people to win these days. Definitely need the right tools. And if those tools are getting you good information for those aforementioned good people, well, that business should drive some revenue. Right?

Right!

Unfortunately, almost no companies really think this way. As it becomes increasingly more common to embrace ecosystems and platform thinking, those companies will hopefully come to dominate markets. Then others will copy them, because that’s what companies do! (The principle behind it is called “loss aversion.”) Let’s go one-by-one.

Ecosystems of talent

What most companies do: They allow clueless managers to scream “I am so understaffed,” subsequently bellowing about headcount. The headcount they receive isn’t tied to a clear job role — just the belief that they are super busy — and the hiring process is a low-context train wreck rooted in outdated notions about competence and horribly generic interview questions. Eventually, someone’s fifth choice enters a job that probably barely needed to exist, and organizational priority erodes even more.

What companies should do: Think about the skill sets you really need based on how your executives want to compete. I know “strategy” changes on a dime in some companies, but if you want to be a traditional B2B widgets company, then hire those types of guys. If you suddenly think you’re embracing platform thinking and need /r/ coders, well, go find those types of people. B2B widgets guys and /r/ coders are different. And as Satell notes, go on Upwork or some other sites and find people for projects. We should be way past the era of silos and “my team is so so great.” Your team sucks. If they were great, you’d be minted. You’re not. You need a “team of teams” model. Bring people together, hit the target, and disperse them to other teams. Rapid and fluid, not silos mired in BS meetings. Hire in the same way. ID the skills, based off the pain points. Hire, on-board in a way with some context, and let’s start driving that CAGR.

Platform thinking and ecosystems of technology

What most companies do: Assume that by simply buying a software suite/piece of technology, their problems are solved. “We have Microsoft Dynamics now,” an executive meows, “so sit back and wait for the money to roll in.” Problem, though: no one on the team was using Dynamics. They have processes and comfort around Google. So, three months later, nothing has changed and that same executive now bellows: “What the hell is going on here? We paid an arm and a leg for these systems!” Yea. It doesn’t work like that. There is a lot of square peg/round hole stuff that goes on with “how companies buy and introduce new technology.” You need empathy for the way people use the platforms you spend money on.




 

What companies should do: Well, have that empathy. Here’s a good example from Satell:

To understand how things have changed, take a look at Mendix, a company which has built a platform to power digital transformation and allows you to pull in resources from anywhere, including Amazon’s AWS, Microsoft’s Azure and IBM’s Bluemix. The interface is so simple and easy, that line managers can fully collaborate with technical staff to create applications.

So, for example, let’s say you wanted to build an application that could monitor machines in your factory, respond to voice commands and verify users. No problem. You can access Amazon’s IOT platform to integrate sensors, pull speech recognition and voice identification from Microsoft and access IBM’s Watson to help you make decisions based on the data.

None of that was possible even eight years ago. But to get there, you gotta understand there is some psychology behind technological adoption. Managers cannot just ‘decree’ something and then it becomes law. There’s an arc, and ideally some feedback/check-ins, around what’s happening.

Ecosystems of information

What most companies do: Some executive hands a $400,000/annum salary to some data scientist guy. The executive has no idea what the hell is needed from data — they often don’t — but figures this dude will figure it out. That data guy becomes managed by some crippling buffoon of a middle manager, who keeps telling him to collect “more, more” data. The data scientist is like “Well actually, what we need is…” The middle manager cuts him off: “We need more! Growth! Revenue! People are on my ass! Collect all the data!” The data guy quits within seven months, despite his salary. The executive is livid. “That was a $27 million revenue play,” he sneers, pulling a number from thin air. “Now what?” The cycle repeats three weeks later.

What companies should do: Figure out what decisions you are trying to make. Get data that will inform those decisions. Hire people who understand how to get, and clean, this data. It’s a lot of steps, but when you do it well, you make money. Isn’t that what you’re chasing?

The bottom line on platform thinking

How we view the work week is a joke, honestly. 40 hours of work in 1955 could be done in 11 hours today. Why? Because we have better platforms and more information. And yet, despite all this, we’re still managing people based on 1911 norms  and thinking our companies “control the market” with “physical assets.” Most of that hasn’t been true since the late 1990s. It’s just that change is really hard for people, and ideas about disruption are really scary, so it’s easier to bury our heads in the sand.

What else you got on platform thinking?

Ted Bauer