When engineering and electronics giant Siemens wanted to launch hearing aids for kids, they faced an interesting challenge. Leadership was contemplating, "How do you market hearing aids to kids?" Despite being a necessity, how do you make them attractive? How do you make them look cool and not weird?
Now for all their experience and technical expertise, these questions were far out of their comfort zone. Their history, their strategy, their culture had never encountered a challenge of marketing technology to kids.
The first question they asked was, "Which of our full-time employees can take this assignment?" Unfortunately, the answer turned out to be, "No one."
So, then the leadership team reframed the question and asked, "Who gets kids to do this job better in the world?" This time, the answer was obvious, "Disney."
Eventually, Siemens and Disney collaborated for a longer-term. Siemens essentially borrowed Disney employees' services for this work.
This is a classic example of how building your business as a platform can expand the gamut of your offerings and take your business to a whole new level.
Collaboration is the best choice when you're faced with challenging work out of your comfort zone.
Building your business as a platform
Every time I strike a conversation talking about business as a platform, people often misunderstand the context. They think that I am talking about typical digital platforms with which most of us are familiar.
However, these digital platforms mainly act as broker services in the B2C sector. Whether it is Uber, YouTube, Amazon, or Airbnb, and alike, they enable smaller companies or individuals to sell products and services to consumers. They connect buyers to sellers and vice-versa.
These businesses do not necessarily create content, produce any product directly, or own any core assets. Instead, in most (or all) cases, their value comes from facilitating the business, data, and analytics.
On the contrary, a traditional business model centers around one core process. And business manages and executes this core process in-house. It, however, often creates bottlenecks and increases dependencies on external factors. But more importantly, it poses an adaptability problem as customer demands change rapidly.
While several emerging technologies such as AI, IoT, blockchain, and others enable significant economic changes, the time is ripe to make transformative changes. Hence the business as a platform!
The main idea
A typical platform business model suggests you become a facilitator of exchange between producers and consumers. So by that definition, this model heavily relies on other entities in the ecosystem to make this model work. However, there is also a common expectation and understanding that platform businesses need not own any production assets.
However, business as a platform is a different paradigm. In this case, if your business owns production assets, you do not need to relinquish them. Instead, you must think of repurposing and augmenting them differently.
Take an example of Microsoft or AWS, for that matter. They use a similar business model for their operations. They use their business assets in two ways. Firstly, to run their own business, and secondly, to lease them to others.
Businesses owning production assets do not need to relinquish them. Instead, think of repurposing and augmenting them differently.
I will use our computer architecture to explain this idea further.
The first layer in our computer is the operating system. It mainly provides device-level access to hardware resources such as a mouse, printer, and so on. The second and outer layer is a high-level operating system. It eases access through GUI (graphical user interface) and other options. Suppose you have these two layers in place and functional. In that case, you can easily install any compatible software or app on your computer. And that becomes the third layer. Finally, a fourth layer might exist, which could be add-ons for those applications and software.
Now, for a business wanting to work as a platform, it means similar. The management and admin, technology, systems, and access to assets can form the first core layer.
The outer layer can be in the form of expertise and movable resources. That may involve labor, experts, technology assets, and alike. In many cases is similar to a small SBU, i.e., a strategic business unit. The teams can disperse and reorganize for the next target once they achieve their goal. If you have read the previous article on special-purpose teams, this layer could be made up of those teams.
And the outermost layer can be all the services you want to provide as a business. Managed through movable groups and systems.
Key benefits of this structure
One of the major benefits of aligning business as a platform is the level of control over costs. But, additionally, it also enables higher utilization of assets. And, if you use your digital infrastructure to enable this, utilization will not only improve from an efficiency standpoint, but you will also see increased effectiveness.
Your business can experience a higher degree of agility with the right mix of assets. Which then helps people to work together and achieve challenging jobs much quicker.
You can expect multiple products and services to be designed and produced by different teams when you organize your business as a platform. But, more importantly, all of them can coexist and serve your users. Both internal users and external customers.
Your next step
While the Siemens-Disney story comes from 2005, the major and relevant learning from that is quite clear. Collaboration is the best choice when you're faced with challenging work out of your comfort zone.
Especially during and many more years after the pandemic, innovative collaborations are going to be the game-changers. With work from home and hybrid workplaces, business as a platform is set to become a norm. It's just a matter of time.
So, your business's first step is to assess how much it aligns today to this concept. If you feel it makes sense for your business in the near future, the best course of action would be to test-pilot it. Maybe for just one unit of your business. Series of pilot trials will give you much-required confidence and learning to get more comfortable. You can then expand the scope with more groups and repeat till you transform.
Reorganizing your business as a platform can give you the much-required punch to take on the competition. It will enable the future of work and help you adapt quickly and survive in turbulent times.
Business as a platform will help you adapt quickly and survive in turbulent times.