How to lay the foundation for resilient digital platforms and innovative ecosystems with great governance

Globally, we are witnessing the rise of platform-based business models that capture and use data to create value for all participants. From Airbnb, Uber and Lyft to WeChat in China and Amazon Web Services, platforms are reshaping industries by creating new relationships between companies, consumers or suppliers. However, many platforms fail because they do not consider the legal framework that governs them. In particular, a successful platform requires clear rules about how key stakeholders interact with each other — rules that must be put in place at the outset of any digital transformation effort.

Leaders who want to create a platform that creates value for all participants.

If you’re a leader who wants to create a platform that creates value for all participants, there are some things you should know about the dynamics of platforms and ecosystems.

It’s true that platforms can be powerful instruments for creating value. But they don’t just happen; they require deliberate effort and management by the company at the center of them. Platforms are not passive systems that work themselves out; rather, they require active leadership to shape how they develop over time. And while this might seem like common sense on its face, many executives still think of their companies as “platforms” simply because they offer products or services through third parties (and sometimes even own those third parties).

Organizations in industries facing digital disruption.

Organizations in industries facing digital disruption will be challenged to re-imagine their business models and approach to innovation. These organizations need to be able to scale up and down quickly, adapt quickly to changing circumstances, and change their business model. A good starting point for managing the complexity of such an ecosystem is the design of a good governance framework.

Platforms that operate through partner networks.

Platforms that operate through partner networks are the most common type of platform. They’re characterized by a marketplace or network of partners providing goods, services or resources to consumers (or between other partners).

Examples include:

• Airbnb (rental accommodations)
• Uber and Lyft (transportation)
• OpenTable (restaurant reservations)

These platforms are complex because they require multiple parties—the platform, service providers and customers all need to interact with each other in order for the business model to work. Successful management is dependent upon establishing clear responsibilities for all parties involved in order to ensure transactions occur seamlessly.

Companies looking to develop ecosystems of value-added services.

As you consider how to lay the foundation for resilient digital platforms and innovative ecosystems with great governance, here are some questions to ask yourself:

• Are we creating value for all participants?
• Do we operate through partner networks?
• Are we looking to develop ecosystems of value-added services?

Put the right rules in place to orchestrate a platform that creates value for all participants — and helps manage risk.

The initial step in governance is to build the right rules. Governance is about how you make decisions, not what decisions you make. It’s about how you manage risk and uncertainty, not about eliminating them altogether. It’s also about ensuring that you have the right systems in place to orchestrate a platform that creates value for all participants — and helps manage risk.

But what does “the right rules” mean? What are they? How do they work? We’ll explore these questions next week at BSCA’s Big impact – a recurring event with discussions on topics on everybody’s lips. 

Conclusion

The governance of platforms is a critical component of success. It’s easy to see how the lack of clear rules can lead to confusion and conflict, but it’s also important not to make things too rigid. Creating a platform where everyone is working together toward a common goal requires flexibility and good communication. In short, if you want your digital platform to be successful, then it needs great governance!

Start something new. Grow your business or brand. A better way to do business.

Work with us. We can show you the way.

We’ll be your digital companion.

Be part of tomorrow.

#platform #ecosystem #governance #businessmodel #digitaltransformation #innovation #platformcooperation #platformcoopetition #collaboration #community