Pipes and Platforms

 

“We are in the midst of transformative shift in business design as business models move from pipes to platforms.”  -Sangeet Paul Choudary Platform Scale

So what does that even mean?  And if we are in the midst of a transformative shift…are we even aware of what it is?

However, before we get to those questions, let’s imagine the quote above with the word business extracted from it.  Now layer that lens upon your organization, whether that is education, government or business. Let’s see how that sounds…

“We are in the midst of a transformative shift in ________ design as ________ models move from pipes to platforms.”

And while we still have not answered what it means to move from pipes to platforms, I think it is beginning to become a bit clearer, that the design of things, from our systems to our organizations, is undergoing, or in definite need of transformation to match the speed of change in today’s world.

Let’s begin by digging into this idea of pipes to platforms that Choudary discusses in his book Platform Scale.  He takes the traditional concept of the education model to describe the idea of pipes.  Where he shares that, “Our education system often works like a pipe where teachers push knowledge to receptive students.”  For which he adds, “There is a linear movement of value from a producer to one or many consumers in all examples of pipe businesses.”

Whereas, in contrast, he shares that “Platforms enable value creation and exchange by matching the most relevant resources from producers in the ecosystem with the consumers on the platform that need those resources.”  For which he adds, “Platforms allow participants to co-create and exchange value with each other.”

It is this idea of pipes to platforms that gives us a much more visual view of this transformation that is spilling out across the entirety of our societal landscape.  It is no longer about owning and pushing, but rather, sharing and connecting across the organizational ecosystem and beyond.  It goes back to an idea that I’ve shared before…

For all intents and purposes, knowledge is no longer a commodity, as much as it is a collaborative tool.

Choudary shares in Platform Scale that there are three primary shifts as we move from pipes to platforms.

First, from consumers to producers.

Second, we a shift from resources to ecosystems.

Third, a move from processes to interactions.

As we weave our way back to the opening questions, it is becoming very apparent that we are in the midst of a truly transformative shift that is spreading virally across the entirety of society.  A shift that is moving with such a ferocity and turbulence that it is engulfing everything that stands in its path.  A shift moving at such staggering speed that we often fail to notice and comprehend how quickly it is changing everything we do, from how we connect socially, interact professionally, how we learn and curate knowledge, to even to how we buy and create things.

It is a much more connected world.  A world that is quickly moving from pipes to platforms.

And it is disrupting our perception of everything.

“Platform scale leverages a global ecosystem of interacting producers and consumers who are always on, ever producing and consuming, and collectively have the potential to power transformative business models.  As businesses move from pipe scale to platform scale, they will reduce focus on ownership of resources, which formed the basis of traditional competition, and will instead compete on their ability to facilitate interactions between producers and consumers in their ecosystem.”  -Sangeet Paul Choudary Platform Scale: How An Emerging Business Model Helps Startups Build Large Empires With Minimum Investment

 

 

Innovate For Value: Moving Past Myths

 

“Employees who have complete freedom to innovate often pursue random ideas that don’t matter…”  -Paddy Miller and Thomas Wedell-Wedellsborg Innovation As Usual: How To Help Your People Bring Great Ideas To Life

Creativity and innovation is not always what we think it is, especially if we want it to provide real authentic value to the user.  We tend to think of it in terms of complete freedom of will and lack of restriction.  But what the research tells us is that much of that thinking is a myth, a misnomer.

In fact, creativity and innovation are often better served and engaged when approached from constrictions and constraints, than when not.

But the myths persist.

So we continue to choose not to approach creativity and innovation as a strategy, with a defined outcome in mind.  Rather, we take this open approach to creativity and innovation and become frustrated when the thinking and ideas that spring forth do very little to provide real value for the organization and those within.

As Miller and Wedell-Wedellsborg share in Innovation As Usual, “Given the constraints of day-to-day pressure, innovators succeed when their leaders give them a clear and limiting focus, and when that focus is directed at something that can create value for the company.”

When we determine to direct our people and constrain our ideas towards a collective outcome, we will begin to see not only more creativity and innovation, but a real depth to our creativity and innovation that provides authentic value for the organization and those within.

In the words of Miller and Wedell-Wedellsborg, “Focus beats freedom. Innovation architects must help their people focus their efforts on what matters.”

Connecting Disparate Dots (Recombinant Innovation)

 

“An assumption we often make about innovation is that it always has to involve something new to the world.  The reality is that there is plenty of scope for crossover ideas and applications which are commonplace in one world may be perceived as new and exciting in another.  This is an important principle in sourcing innovation where transferring or combining old ideas in new contexts – a process called recombinant innovation.”  – Bessant and Tidd Innovation and Entrepreneurship 

Our world is being transformed.  The very idea of change and all that it encompasses is being altered and accelerated to once considered astonishing levels.  The very idea of change is being augmented and amplified, not so much by the big corporations and organizations, rather by the creatives, innovators, entrepreneurs, pioneers, cross-pollinators, social anthropologists, visionaries, and changents who are creating and layering new possibilities right over what we once considered impossible.

They are the new leaders.  And these new leaders who are changing the game aren’t just inventing new…they are connecting what already exists in profoundly creative ways.

They are exploiting what already exists, in ways that were never previously visualized.  They are finding fertile ground for innovation not just in the creating, but in the combining.  Combining and cross-pollinating those disparate dots that were yet to be linked or considered.  In many ways, they are creative concept and idea recyclists.

Or as Andrew Hargadon imparts, “Innovators rarely come up with new ideas; instead, they convert old ideas into new ones, adapting them from one context to another.”  Which leads to what he calls “recombinant innovation.”

Which supports the need for not only a depth, but a real breadth of learning and knowledge as well.  Recombining and connecting disparate dots necessitates a much wider idea landscape and well from which to draw from.  Which then entails and requires much broader ranges of reading, connections and networks.  As well as an environment and organizational culture that supports learning and the learner.

For which Hargadon adds, “Innovation requires collective action because, at the beginning, the power of these groups provides the conditions for generating truly novel recombinations.  The act of innovation is, in its early stages, is just another act of deviance.”  He continues, “The price we pay for networked perspective, for abandoning the simplicity of individual inventors and their inventions, is significant.  Established facts need to be revisited, old assumptions questioned, and traditional stories retold.”

Leveraging learning, mixing and remixing of ideas, and a  blending of ‘old’ world meets ‘new’ world will be prerequisites for this work.  But what we find when we become the connectors of disparate dots and creative idea and concept recyclists, is that innovation often resides in what already exists right before us.

In many cases, innovation is right under our nose, we just didn’t have on the right lens or put forth the creative perspective that eventually allowed us to see and visualize it.

There is no box…just dots.  Often disparate dots waiting to be discovered, waiting to be connected.  How we connect them…will determine how creative and innovative we are and eventually become.

 

‘Intent’ To Adapt

 

“In preparing for battle, I have always found that plans are useless, but planning is indispensable.”  -Dwight Eisenhower

We now live in a VUCA (volatile, uncertain, complex, ambiguous) world.  A world that has often found itself reeling in confusion from the rising complexity that surrounds and seeps into our personal and organizational lives.  Dealing with this VUCA world requires a tremendous cognitive shift from a focus on sustainability to one of adaptability.

It is no longer just a matter of being willing to change, but the agility to shift, pivot and change course as new data and information makes itself more available.  

Which has shown itself to be a very difficult proposition for many of our hierarchical, command and control, and often methodical, predictable, linear organizations that find themselves entrenched in forcing rigid structures and implementing deeply-defined processes.

We often find ourselves so steeped in creating and controlling the path, that we lose sight of the goal and destination.

Our world has shifted from one of ‘technical’ problems to one of ‘adaptive’ challenges…which necessitates engaging all levels of the organization in the learning and knowledge that promotes people to act with much more insight and autonomy.  Autonomy that is grounded in a deep understanding to the outcome and end goal, while acknowledging the need to modify and adapt when necessary and needed to better carry the organization to that destination.

An outcome that the Army has termed ‘commanders intent’.

An ‘intent’ which Pascale, Millemann and Gioja refer to in Surfing The Edge Of Chaos as, “Under this construct, combat units are encouraged to improvise and initiate, but always within the larger structure of the Commander’s Intent.  When that intent is clearly communicated, fighting units can exploit opportunities that arise, or regroup when things don’t go exactly as planned.”

For which they add, “If this information is properly managed, soldiers on the front lines are able to make decisions in real time.  Given the right tools, they can exploit opportunities and improvise in highly advantageous ways.  This competitive advantage is squandered if one conforms to the traditional Army doctrine of first running all decisions past headquarters.”

The problem with many organizations, is that we refuse the autonomy for those on the front lines to make the necessary decisions to adapt in functional, positive ways…and yet, the ‘commander’s intent’ is neither explicitly shared or known by those doing the front line work.

Inability to clearly provide ‘commander’s intent’ while withholding autonomy not only inhibits individuals and organizations from taking advantage of adaptive situations that allow the organization and individuals to grow in positive ways, it ultimately diminishes the collective capacity of the whole.

As General Gordon R. Sullivan shares in Surfing The Edge of Chaos, “The competitive advantage is nullified when you try to run decisions up and down the chain of command.  Once the commander’s intent is understood, decisions must be devolved to the lowest possible level to allow these frontline soldiers to exploit the opportunities that develop.”

In today’s VUCA world, the more we equip our people to better adapt to the challenges and problems that they face in real time, the greater the organization functions at all levels, increasing the collective intelligence, wisdom and capacity of each individual and the organization as a whole.

Or as Chad Storlie shares in Harvard Business Review, “Good Commander’s Intent allows employees and teams to adapt the plan using improvisation, initiative, and adaptation to reach the original plan objectives.”