page image

CHAPTER III - The Power of Platforms

In each case, it is the existence of a platform that opens new opportunities for innovation and makes it possible to share resources more efficiently. These platforms are responsible for creating a new model for business, which Robin Chase calls “Peers, Inc.,” that marries the “industrial strength” of large organizations (corporations, nonprofits, governments) and the “individual strength” of people and small, local businesses to support a range of capabilities that neither party alone can provide. Large enterprises have the scope and the resources to make the large, multi-year investments needed to build and maintain the extensive infrastructure that is required to operate a successful global platform. At the same time, individuals and small enterprises are able to make small investments and have the local knowledge and unique expertise needed to provide specific, customized offerings over these platforms that larger enterprises cannot deliver.

Figure 3. Peers and Incorporated, Characteristics

Source: Robin Chase

Combining these two complimentary sets of capacities results in a new business model and makes possible new kinds of offerings that take advantage of the strengths of both types of entities: products and services that are both global and local, broadly available and highly customizable. Large enterprises can provide the consistency and assurance of an established brand, while smaller participants can leverage the power of their personal social network connections.

Exactly what the boundaries between these two types of capabilities should be is still in flux and is likely to remain so as long as the ongoing evolution of technology continues to influence the capabilities of both types of enterprises. In some cases, large established businesses may build a platform that changes the dynamic within an industry sector (think of the impact of Apple’s iPod/iPhone/iTunes platform on the music industry or the impact of airline reservation systems on travel agencies), while in other cases, a start-up (e.g., Airbnb, Lyft) may take advantage of available infrastructure to create a highly disruptive new platform. But the combined power of large and small organizations is already generating new business models that are challenging the dominance of traditional businesses.

Figure 4. Peers Incorporated Yin-Yang Relationship

Source: Robin Chase

The interface in this kind of “yin-yang” relationship is highly dynamic. A lot of interesting things can happen there. For example, Peers, Inc. businesses can be powerful generators of other types of capital than financial. John Seely Brown pointed out that when he uses a ride service such as Lyft or Uber, he often sits in the front seat, next to the driver, rather than in the rear seat as in a taxi or limo, creating an opportunity for different kinds of interactions that can create new types of social capital. While there is no monetary payment for “homestays” arranged through Couchsurfing, many users “show their appreciation [by] bringing a gift, cooking a meal or teaching a skill.”v

There are also rich opportunities to generate “learning capital” at the interface between entities. For example, a number of large enterprises have launched reverse mentoring programs that involve getting senior executives up to speed on emerging opportunities by linking them with employees who may be more junior but have current knowledge or experience in key areas.ii

As John Hagel pointed out, platforms can be useful not just for supporting the development and delivery of innovative products and services; they can also be used to enhance collaboration and accelerate the generation of ideas. Terry Young described how his firm, sparks & honey, has created a platform-based “cultural intelligence system,” that it uses to generate insights that can help its clients’ brands to “leverage culture in real time.” The company closely tracks cultural developments (“weak signals”) that enable it to forecast emerging trends and quickly develop and deploy targeted campaigns that play off of these trends.

At a daily noontime meeting, the staff convenes to share the signals they have picked up from the environment and brainstorm ways to leverage them. Each day, participants identify somewhere between 50 to 70 signals which are winnowed down to a dozen or so that are used to develop new campaigns built around these developments. The signals are logged in a “cultural database” that can be searched for larger patterns and trends. In addition to aggregating the insights of the people who meet daily in the company’s “newsroom” in its New York headquarters, the company uses the Internet to gather input from more than 2,000 contributors around the world, including a group of 50 key “influencers” from different domains (e.g., design, entrepreneurship, spirituality, corporate innovation) and some 70 “scouts” in 11 different countries who scan their local environments for similar signals.

The company uses multiple platforms to open up their scanning process, to aggregate and derive insights from the signals it gathers, and to accelerate the process of turning insights into campaigns for its clients. For Young, using platforms is about “the fast getting faster.”

The Limitations of Platforms

Platforms can accelerate innovation, but they are not silver bullets. To be effective, platforms need to strike the right balance between openness and constraint. George Dan Doney, Chief Innovation Officer at the U.S. Defense Intelligence Agency (DIA), sketched a curve that showed the relationship between the performance of an enterprise—which equals the sum of the individual performances of all of its individual contributors—and the extent of control that the enterprise attempts to exercise over its operations. Some degree of central control is necessary to provide a framework for and alignment of the efforts individual participants. But as soon as the degree of control exceeds an optimal point (point “2” in the diagram below), overall performance declines.

Figure 5. Control/Performance Curve

Source: Dan Doney

Gene Han, Director of Enterprise Strategy at Target Corporation, agreed with Doney’s analysis, noting that when companies get large, issues of command and control almost always arise and are difficult to resolve. In big enterprises, it is typical for innovation to get killed by “corporate antibodies.” While a few companies such as Google and Amazon have “embraced the power of the individual,” they remain the exception rather than the rule. Most companies still are organized with kings and fiefdoms.

The reason that virtually all large organizations perform sub-optimally is that they have gone well past the ideal point for enhancing performance (i.e., they are closer to point “3” than to point “2” on the curve). Doney noted that platforms, like formal organizations, can serve as “engines for coherence” that offer many benefits for individuals, including responding to the desire to belong, to be part of a larger movement. But they can also block innovation that is not consistent with the platform. In a variety of institutions—religion, unions, gangs, nation states—the desire for control can be stronger than the desire for change. At the extreme, these entities can behave like organized crime families, striving to hold onto their turf at all costs.

There are some telling examples of corporate responses to platforms that were perceived as shifting the locus of control too far in the direction of individuals and away from the corporation. John Hagel described how the giant furniture retailer Ikea reacted to the emergence of a lively “hacker” movement of people who were assembling the company’s products in creative, nonstandard ways or adding new features to them and sharing their designs publically. The movement began in 2006 when Jules Yap (a pseudonym for a young woman who lives in Malaysia), started IkeaHackers by setting up a website (www.ikeahackers.net) and a Facebook page (https://www.facebook.com/IkeaHackers) to post examples of customized Ikea products.

In June 2014, just one month before the Aspen Roundtable convened, Yap received a legal “cease and desist” notice from Ikea that demanded that she stop using the company’s trademarked name. When Yap shared the news about IKEA’s action, the result was an immediate “worldwide outcry” that criticized the company for acting like a bully and failing to appreciate the real value of the movement. A column on Gizmodo titled “Why Ikea Shutting Down Its Most Popular Fan Site is a Giant Mistake” was typical of the responses: it argued that “Ikea is a company that prospers from the devotion of its fans…. IkeaHackers is harmless fun, a burgeoning community of fans who are excited about Ikea and the hidden genius of its products. And what’s more, it gets people excited about the company (and into its stores).”iii Ikea (which Yap affectionately refers to as “the blue and yellow mothership”) quickly realized that it had overreacted and reached out to seek a compromise that would allow the site to continue to operate. As of the writing of this report, the site is still up and running under its original name and has undoubtedly gained additional followers as a result of the controversy.

David Stern, the recently retired Commissioner of the National Basketball Association, commented that professional basketball has had to deal with a media environment that changed dramatically during his 30-year tenure, which required an ongoing consideration of how it should relate to various media. A key issue was how open or closed the league should be in relation to access to its multiple products. They decided that they needed to retain control of the broadcasting of games—which represented the league’s largest single source of revenue—and they granted distribution licenses to multiple outlets in order to grow ticket sales and viewership. But in order to increase interest in the game, they also decided that they should be as open as possible in allowing the use of game highlights and not try to control their use. Stern and the team owners seemed to have found a happy balance between closed and openness: during his three decades as commissioner, total revenues earned by the NBA grew from approximately $100 million per year to nearly $5 billion, while the collective value of the league’s teams increased from $400 million to more than $12 billion.iv

Confronting Disruption in Higher Education:
The Committee for Coherence at Scale

As noted earlier, after years of seeming to be immune to the impact of technology, the field of higher education has begun to experience real disruption, with the expectation of more to come. The rise of Massively Open Online Courses (MOOCs) has presented a direct challenge to the traditional model of how instruction is delivered. But while MOOCs may be the most visible manifestation of a digital revolution in education, they are literally just the tip of a much larger iceberg: Open Educational Resources (OERs), learning management systems, electronic textbooks, online journals and remote collaboration tools are a few of the digital innovations that are impacting higher education.

Different schools have reacted in different ways to the challenge posed by these technological innovations, and many experiments are underway to figure out their appropriate role in higher education. But rather than seeing new technologies as a threat, some educators have chosen to see the emergence of new capabilities as an opportunity to fundamentally rethink the way education is organized and delivered as it migrates from analog to digital: i.e., from a dependence on classroom-based in-person instruction to online instruction and from paper-based to electronic publication as the key means of communicating and preserving knowledge.

In the past few years, a series of new national initiatives launched that include participants from multiple educational institutions. They are working collaboratively to make use of technology to create resources that benefit all of them. Several of these initiatives involve efforts to rethink the roles traditionally played by university libraries and librarians and are focused on providing standardized means for the capture, storage, dissemination and preservation of the products of scholarly work. These projects can be seen as attempts to jointly create platforms that can provide standardized means for aggregating and sharing knowledge—a fundamental task of higher education. Among these initiatives are:

  • The Digital Public Library of America (DPLA) is intended to unify disparate digital collections in libraries to provide “open and coherent access to the country’s digitized cultural heritage.” Launched in 2013, the DPLA amassed a collection of over seven million items and is developing innovative tools for accessing and using these resources. Since many items are geo-coded, for example, users can search for resources by using a map. An interactive timeline allows users to find resources published in any given year going back to the year 1000. A recent initiative funded by the Gates Foundation will help local public libraries to work with patrons to digitize personal archives to create a shared digital history of their communities.v
  • HathiTrust is a joint effort of major research libraries to create an “above campus” digital repository that now includes more than 11 million volumes contributed by 28 institutions. The project is also engaged in research projects that include a review of various works in order to determine whether they are in the public domain, and an effort to expand legal access to in-copyright materials.vi
  • Unizin is a federation of universities working together to share access to large-scale, cloud-based services based on open standards. A key goal of the project is to define digital workflows for scholars and researchers that can “guide and route digital content to the appropriate destinations, complete with information about the rights that go with that content.”vii
  • Shared Access Research Ecosystem (SHARE) is an initiative to enhance access to and preservation of research outputs. SHARE’s goal is to make research results more “discoverable” and to enable researchers to make creative and productive use of these assets. SHARE will consist of four layers: a notification service to inform stakeholders when research is released; a comprehensive registry of research outputs; a discovery layer to help interested parties find research across repositories; and a content-aggregation layer that will facilitate data and text-mining and other value-added services.
  • Digital Preservation Network (DPN) is attempting to address the problem that “digital expressions, whether they are words, data, or images, are inherently fragile,” and that “digital collections are one catastrophic, economic, technological, or organizational failure away from irrevocable loss.” The DPN is designed to ensure the preservation of research and scholarship in digital form by providing for its replication “across diverse software architectures, organizational structures, geographic regions and political environments.” Initially, the DPN is building a “digital preservation backbone” that will allow content that resides in existing digital repositories to be replicated at a minimum of three different locations to ensure the integrity and retrievability of that content.viii

One of the most interesting and ambitious “meta-projects” to reimagine education in the digital age is the Committee on Coherence at Scale for Higher Education founded in 2012 by the Council on Libraries and Information Resources (CLIR) and Vanderbilt University. The goals of the initiative are to support individual projects like those described above and “to encourage academic leaders to see their individual institutions as part of a larger digital ecology and to connect and coordinate existing projects so they can integrate all facets of the cycle of knowledge.”ix

Figure 6. The Cycle of Knowledge Creation and Use

Source: Committee for Coherence at Scale in Higher Education,
http://vimeo.com/103828743

According to Elliott Shore, Executive Director of the Association of Research Libraries and a member of the Committee, the group is attempting to “redefine the academic environment” by making more efficient use of excess capacity in the system. For example, university libraries compete to have the largest collections, which means that multiple copies of the same works are held in many different places. But when publications exist digitally and can be instantly accessed from any place, how many different copies will really be needed? By reducing the need for libraries to keep redundant copies of the same books and journals, it may be possible for universities to save millions or even billions of dollars in unneeded physical facilities—but only if they work together to create a common system. A fundamental assumption of the Committee is that one of the greatest opportunities offered by the new digital technology is for existing institutions to think collaboratively and imaginatively about how they can reinvent their operations. Its goal is to take advantage of current disruptions to build a new kind of coherent ecosystem in higher education.


ENDNOTES
i CouchSurfing, Wikipedia, http://en.wikipedia.org/wiki/CouchSurfing.

ii A classic example occurred several years ago when Procter & Gamble was exploring new business opportunities. In the process, it identified biotechnology as one highly promising area for development, but then discovered that none of the company’s senior executives were familiar with the field. In response, P&G created a Biotech Reverse Mentoring Program that paired the company’s twelve top executives with young PhD biotech scientists who met together monthly for a year. According to my IFTF colleague, Bob Johansen, who helped develop the program for P&G, “the result was a considerable increase in the biotech expertise of the top executives: they did not become scientists, but they certainly knew a lot more about the business implications of this new area of science. At the end of the year, P&G had a biotech strategy, and you can see the results in many P&G products.” Robert Johansen, Get There Early: Sensing the Future to Compete in the Present, Berrett-Koehler Publishers, 2007.

iii Kelsey Campbell-Dollaghan, “Why Ikea Shutting Down Its Most Popular Fan Site Is a Giant Mistake,” Gizmodo, June 16, 2014, http://gizmodo.com/why-ikea-shutting-down-its-most-popular-fan-site-is-a-g-1591401344.

iv Kurt Badenhausen, “David Stern To Retire After Delivering $12 Billion In Value To Owners,” Forbes, October 25, 2012, www.forbes.com/sites/kurtbadenhausen/2012/10/25/david-stern-to-retire-after-delivering-12-billion-in-value-to-owners/.

v Daniel Cohen, “The Digital Public Library of America: Collaboration, Content, and Technology at Scale,” EDUCAUSE Review, July/August 2014, www.educause.edu/ero/article/digital-public-library-america-collaboration-content-and-technology-scale.

vi Jeremy York and Brian E.C. Schottlaender, “The Universal Library Is Us: Library Work at Scale in HathiTrust,” EDUCAUSE Review, May/June 2014, www.educause.edu/ero/article/universal-library-us-library-work-scale-hathitrust.

vii James L. Hilton, “Enter Unizin,” EDUCAUSE Review, September/October 2014, www.educause.edu/ero/article/enter-unizin.

viii James L. Hilton, Tom Cramer, Sebastien Korner and David Minor, “The Case for Building a Digital Preservation Network,” EDUCAUSE Review, July/August 2013, www.educause.edu/ero/article/case-building-digital-preservation-network.

ix Committee on Coherence at Scale for Higher Education, August 2014, http://vimeo.com/103828743.

Share On