“The Rules of Platform Design” – An Interview with Simone Cicero
Simone Cicero is the original creator of the Platform Design Toolkit and an independent designer and a facilitator, speaker and entrepreneur with a special focus on open business models, both in software and in hardware. Former Chairman of the Open Hardware Summit, and program fellow of OuiShare Fest conference, Simone has extensive work experience in emerging, self-managed, and horizontal contexts – which he helped to design and create. Thanks to the work on The Platform Design Toolkit he has effectively contributed to launching a new design domain and has empowered hundreds of thousands practitioners worldwide. Simone had the chance to work with all types of organizations – from Fortune 500 to the United Nations, from social enterprises to start-ups – on the topic of platform design and ecosystem weaving.
How did the platform design toolkit come into its present form? How should companies use it?
So the platform design toolkit was created in 2013 as a fork of the Business Model Canvas and was mainly created as a tool for imagining business model innovations. The original platform design canvas was created to model an emerging business model that was precisely that of so called platforms or better that of multi-sided businesses that – at that time in 2013 – were starting to succeed by connecting demand and supply. In the last 6 years then it has been continuously improved and extended and has become a toolkit that today includes a few canvases and that can help companies not only to reinvent their business model but also to rethink their organizational model, and I would also say in general their role in society in the market.
Companies can use the platform design toolkit primarily to install a certain type of mindset in their workforce: this different way to look at things, allows employees see through boundaries, siloes. This will make it possible for the organization to avoid self inflicting boundaries and limitation to its own strategic thinking in an age where, as Rita McGrath once said, it’s no more about industries but large arenas.
What should companies be looking for along the way? Are there patterns you’ve observed that help companies decide what to do?
Well, yes there are different patterns and different recurring strategic approaches that we have called platform plays. The latter can be recognize even “visually” looking at the value chain. Among the most important recurring approaches there are standardization of transactions, bringing suppliers back to the top of the value-chain and treating them as users, creating mechanisms for managing identity reputation, creating software-as-a- service to replace complex bureaucratic processes and many more.
So there is a sort of playbook regarding the transformation of industries and market opportunities through platform strategies and this reduces even more the alibi that many companies give themselves by suffering of what I call the NAH (Not Applicable Here) syndrome. The truth is that these mechanisms are so pervasive today that they apply not only to all industries but also inside and outside company boundaries and inside and outside markets and finally within the whole of society.
You have been working with Haier – a leading platform/ecosystemic organization. What are they doing differently that changes the game?
First, Haier accepted immediately – from the first days of its existence – thanks to the vision of its iconic CEO Zhang Ruimin, the possibility of changing and reinventing itself continuously to avoid, as Ruimin says, becoming “a museum exhibit”.
Haier today is largely based on a structure made up of independent micro-enterprises that organize themselves into larger systems called “Ecosystem Micro Communities” which are also rather self-governed and organically defined. This network structure, combined with a faint difference between the “inside” and “outside” of the group allowed Haier to innovate fast and radically in spaces adjacent to – and even sometimes radically different from – its core business. To really get the best of the opportunities of the age of networks, organizations must transform accordingly, embracing a network structure.
This constant change has certainly come at the expense of the safety and certainties of many of its workers. Sometimes it remains difficult for me to think of a European company acting equally casually towards its workers. The Haier context has in fact always been very challenging – especially in recent years – for the workers who have participated in the transformation: they have been called to reinvent themselves as entrepreneurs and team-workers and to produce tangible value for their users. No bureaucracy has kept employees protected from internal and external competition and therefore the company has been able to accumulate less “cultural” debt.
My impression is that now Haier is not only having a very advanced organization but also a very ready and determined workforce, positioning the company among a set of worldwide leaders. It also has its limitation – as any other company as many of those limitations are cultural and attached to globalization: for example the core focus is still on user experiences something that I personally found limiting in an age like the one we’re living.
What advice do you have for a product-based company? Is it too late?
The day that a company defines itself as a “product-based” or in general when it attaches itself too much to what is currently providing to the market it’s making a very problematic mistake.
We know that today the market is becoming more and more defined by ecosystems, therefore a company’s mission is to find ecosystems to support, nurture help thrive and emerge, often it’s a calling more than an opportunity. But product based companies also have an obvious first strategic move to make: look up into the value chain and aim at capturing part of the value that the ecosystem is creating with those products.
Are you selling sailing boats? Maybe it’s time to organize regattas or just, sailing trips. Are you selling mortgages? Guess what: maybe it’s time for you to take a stab at organizing part of the housing market.
What is the future of the Platform Economy?
Well that’s such a huge question! I just wrote a blog about it (here) and to introduce a 6 months research project that should end up with a White paper in the summer. In any case 80 % of the consumer spending is still not managed with marketplaces and platforms, in the US alone Andressen Horowitz consider this a 8 trillion opportunity, and therefore this makes an easy guess for where the future of the platform economy lies. But we make a mistake if we only look at the market without looking at the broader picture of cultural and social aspects: platform-thinking is an expression of a wider moment of maturation on how we design organization that can use the internet at a different maturity stage. Mark Andressen lately said that the the internet is entering its “maturity” stage as a technological paradigm shift: would you guess what this means? It means that with words such as platforms, ecosystems we’re just talking about the future of organizing that is not something that just “happens” but something that happens through us and our showing up in the economy, in society, in our communities and in our landscapes.
What is Cicero’s Triangle, and how is it helpful?
That’s a interesting question because it allows me to touch one of our missions: to make great knowledge more available. The triangle connects the work of John Hagel, Simon Wardley and Ben Thompson and provides a vision of the digital economy as three-”layered”.
On top you’ve the niche markets and in the lower layers the aggregators and the infrastructures. Well, if you’re playing in the upper part your market size is shrinking and so is your size (not a great news for incumbents), if you’re playing at the other layers your market is concentrating, due to either network effects or economies of scale (or both).
Can public institutions be platforms? What’s holding us back?
I believe we’re entering an age of reinvention of such institutions, and probably the demise of some of them. I can see how new institutions are growing that are playing in a new space – that of openness, and community – that are leveraging on the mindset of platform thinking. I must also say that nothing is holding us back if not our lack of sovereignty as individuals, organizations and communities. We often rush around and behind the usual without even trying to find a moment to redraw our priorities. Now it’s time to do it!
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INTERVIEW by Christian Sarkar