The Meaning of the Platform Organization
Value, Learning, Trust & extended Value Creation with Ecosystems
A few days ago I spent the day working at IQUII HQ, here in Rome. IQUII is a small but growing digital agency I have the chance to work with sometimes. On that day I wasn’t there for an ongoing project — like oftentimes — but just because I wanted to breathe the company culture and spend the day at the place, hanging out with the team while doing some work.
I’ve always knew that IQUII had its own culture, even years ago, when the company was just born and we had our first opportunities to collaborate: within time, they developed a stronger cultural awareness and even felt the need to consolidate it in a culture code (read it in english).
Of course, IQUII is just one among hundreds of companies that decided to write down their own culture codes: these codes are often no more than a declaration of intents but the effort to pin down the key values that make the cultural heritage that lies at the heart of your organization clearer, is an effort worth trying.
I’ve been involved a few times in discussions and activities related to exploring intrinsic emergent organizations’ cultures and values and I can tell you that few cultural elements — that you indeed also find in IQUII’s culture code — strongly resonate among today’s most innovative contexts; the contexts where I find myself often confident and thriving when working: these key elements of culture connect most of the organizations that are rocking today’s world of work.
The cultural elements of thriving, enabling organizations
First of all, these modern performing and creative organizations are essentially value driven: they don’t care about anything that is not producing tangible value towards their customers and partners. Furthermore, these companies are based on a strong growth mindset and focus on curiosity and continuous learning (as a mean to continuous improvement) through continuous experimentation. As Aaron Dignan once said, speaking about responsive organizations:
“These companies are lean, mean, learning machines. They have an intense bias to action and a tolerance for risk, expressed through frequent experimentation and relentless product iteration. They hack together products and services, test them, and improve them, while their legacy competition edits PowerPoint.”
The last of the three cultural ingredients is that of trust: often forgotten and underestimated, trust is instead essential for these enabling organizations. Indeed, these adaptive and modern organizations often have a different way of defining themselves: my friend Stelio Verzera sometimes uses the hawaiian metaphor of Ohana to describe what such a modern organization really is (or, at least, that’s my elaboration). In wikipedia’s terms, an Ohana is a “family (in an extended sense of the term, including blood-related, adoptive or intentional)” where people are “bound together and members must cooperate and remember one another” and that metaphor definitely fits.
Trust is a powerful collaboration enabler and we’re effectively understanding — more and more — that organizational intelligence can only be increased through collaboration itself. As Esko Kilpi puts it:
“the social capacity of cooperation is the foundation of human intelligence”
(Esko Kilpi)
Some advanced traits of thriving organizations (intended as “ways of organizing”) can therefore only be developed by means of interactions, conversations and collaborations between the people that make the inside (employees and collaborators), the outside (customers and providers) and the edge (partners) of the organizations. Modern intelligence IS inherently social and interactional (or transactional) and bureaucratic organizations which are used to think in terms of boundaries and competition often fail to have the right conversations across these very boundaries.
In the post-industrial age, bureaucratic organizations are bound to be less intelligent.
Why bother about people’s culture when you could just change the processes and deploy collaboration technologies?
During his recent participation to The Conference in Copenhagen, Indy Johar recently said: “every human is a phenomenally powerfully intelligent machine, yet we treat them as bad robots who won’t get it”.
Modern managers and organization designers must reflect and understand this sentence very deeply. Too often we think we can tweak an organization and bring it more potential by just working on the enabling technologies, such as re-engineering a process or acquiring new software.
We tend to think that a change in technology can drive the change we want to see in the organization behavior: this is just plainly wrong. I need to quote my friend Stelio Verzera again here, with his amazing schema (follows), inspired by fluid dynamics.
The picture explains very well a too often untold truth when it comes to organizational (digital) transformation efforts in companies: you can bring in new processes and technologies, work on creating new competences, but the only lasting and influential change in your organization will come from the actions you take to align your organization’s goals with the goals of your ecosystem of people, and your organization’s awareness with that of your people. Creating a context where they can express themselves in their wholeness, achieve their life goals and improve their capabilities and performance is a great deal of work that needs to be done.
In few words, change will definitely come when you’ll start investing on understanding and shaping people’s behavior and when they in turn will shape the organization’s behavior.
Changes in how your organization values, sustains and helps people to evolve will drive a lasting and powerful change as those people will be the continuous co-creators of your company’s culture: they will help your organization develop new competences (through curiosity, conversation and relationships) and, in the end, will drive the adoption of new processes and tools — both technological and organizational — that are functional to their way of relating and executing valuable work.
But why is this epochal change in how we create value inside and outside organizations happening?
In the first place because it’s possible. Technology has had such an incredible impact in the switch between industrial age and what we call post-industrial age. Two major effects of technology’s evolution brought us from the firm as a way to control production to the firm as a way of designing and sustaining interactions.
First and foremost, it’s because technology helped individuals regain access (and ownership) of the means of production: nowadays most of [knowledge] work can be performed with the help of portable phones and computers, you don’t need complex tools anymore.
Second, technology cut down the cost of providing most of the infrastructures of modern work that are complementary to personal means of production. I’m of course talking about connectivity, data storage capacity and computing power but, increasingly, we also see more tangible infrastructure being commodified and becoming ubiquitous, including logistics, financial tools, manufacturing capacity and energy production.
This process, essentially, made it possible for humans to collaborate and create at an unprecedented scale and with unprecedented level of self-coordination, even without sharing the same place, factory, workshop or formally belonging to a single organization. Technology gave humans the means to align interests and motivations and produce extremely powerful outcomes. The history of open source software and — lately — tangible cases such as that of the creation of public Distributed Ledger Technologies like Bitcoin’s Blockchain are there to manifest this.
In the second place the way we create value in organizations is changing because it’s needed: as the world increasing lives through growing uncertainty and unpredictability (there’s even an acronym for it VUCA, Volatile, Uncertain, Complex, and Ambiguous), reality demands organizations to evolve towards radical adaptability.
This new context asks us to rethink and redesign our organizational structures accordingly. The industrial age of Taylorism and Scientific Management brought us the perfect organization to cope with efficiency, repeatability, control and planning: the rigid structures of the corporate bureaucracy.
The uncontrollable, unpredictable (and a bit crazy), post-industrial age is asking us now to rethink our leading organizational model: organizations must now comply with long tails, transient needs and economies of scope, must give up planning and embrace adaptability, scalable experimentation and learning. Players that don’t find the energy to embark on the change, will just disappear.
In every industry, the old is going away faster than the new can replace it.
(Beth Comstock)
Does it make sense to think about the inside and outside of an organization?
In a recent post Niels Pflaeging describes the way these thriving organizations work. According to him, a triad of structures allows companies to “absorb complexity”: the first one is formal, and normally identified with traditional management hierarchies. This structure is somehow a relic of the past: it’s maintained — or at least it should — only because it ensures compliance with the law (be liable, receive investments, pay out shareholders, etc…).
A second structure, according to Pflaeging is the social one, mostly based on relationships, influence and social interactions: it’s inherent in organizations since social interactions are inherently there. You can befriend your CEO and this will eventually lead to you having more influence over the organization.
The third and most interesting structure that Pflaeging points out is the value-creation structure and it relates with how the organization organizes when it needs to provide value to customers and users.
“Value Creation Structures can be mapped as networks of cells, which contain functionally integrated teams, and which are interrelated by value flow, pay, and communication relationships. In the structure, any cell either creates value for other network cells (in case of the center) or for the outside market (in case of the periphery). Cells, or teams, respond to market pull — not hierarchy.”
In this context value is produced not only “inside” organizations but instead, essentially at the edge, in between inside and outside and, by the way, always in a relationship (being it internal or across the edge). The very concept of inside vs outside of an organization is losing its meaning and giving way to a concept of organizations with disappearing borders and made of loosely coupled elements.
Furthermore, here, I want to raise an essential question: are modern platform brands, such as the Airbnb’s and Apple’s of the world, really identifying themselves with their employees? The answer is no.
Apple’s footprint on the world extends to encompass the universe of application developers, the whole brand of Airbnb is personified by its hosts, Amazon’s Alexa iconic potential is dictated by the companies now building its skills. None of them are direct employees of the organizations mentioned.
One thing that Pflaeging doesn’t seem to see completely is that — at least for the organizations that are dominating this century — value creation often expands very wide in ecosystems through the creation of platforms and doesn’t remain confined in the realm of the strong ties that make an organization’s body (eg: employees and contractors).
These network orchestrators (the so-called platform businesses) discovered that they could design a scalable way to partnering (aligning the objective of the organization with that of many other entities): this allows value creation to happen directly inside market-ecosystems, with the platform’s support and mediation.
Platforms are scalable partnership agreements based on a shared galvanizing message.
Of course — at some extent — formal structures still count as they help the company comply with the law, execute and convey its market shaping messages: but, increasingly, it’s the whole ecosystem of one organization that defines it. If you’re not keeping this in mind when working on or steering your organization’s future, you’re really not only losing an opportunity to amplify your mission, shape markets, achieve impact and evolve, but you’re also taking the risk to soon be made obsolete.
>> If you liked the post you may also like what I consider the continuations <<
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