The economics, structure, and behavior of platform ecosystems and organizations

In mid-2018, I undertook a research project with the goal that is fairly well-expressed in what became the title of the project's final report: Evolution of the Platform Organization: What We Can Learn From Haier. I posted the talk I was honored to share at the 2nd International Rendanheyi Model Forum, held on 20 September 2018 in Qingdao, China Work (see Evolution of the Platform Organization), but I have not posted the report, until today.


Introduction

We live in a time of enormous change, confronted by an uncertain future. While it is hard to see ahead, we can anticipate the form of impending change by looking back to the past. We can look back at how communications and information technologies have impacted human societies, and led to the structure of our institutions and businesses. As has often been observed,

History doesn’t repeat itself, but it rhymes.

So we can tease out the lineaments of the future by sketching the patterns of the past, looking in the rear-view mirror while driving into tomorrow.

We are undergoing a major transition in the shape of our organizations -- as humans have at each wave of disruptive technological advance in the past. In this, the fourth industrial revolution, companies are being driven to adopt new ways to communicate, coordinate, and cooperate, and with an imperative to become more agile, flexible, and innovative based on an accelerating and globalized business environment.

How large of a change are we confronted with? Peter Drucker presciently said, in 2000,

The corporation as we know it is unlikely to survive the next 25 years. Legally and financially, yes. But not structurally and economically.

In this report, I am trying to explore this change, using the visionary adaptations that chairman Zhang Ruimin has instilled at Haier, the corporation that has become one of the leaders in today's revolution around organizational change.

In the following five sections, this report will explore the new calculus of business: the most successful firms of the next era of global business will be built on the emergent value of this formula: Networks + Platforms = Ecosystems. My goal is to make that shorthand make sense.

In section 1, Social Evolution, we will explore the social evolution of human advance, from the transition to agriculture in prehistory up to the fourth industrial revolution that we are living through today.

In section 2, The Era of Networks, we will characterize the state-of-the-practice in organizational thinking, today, as a transition from hierarchical command and control structures to networked organizations.

In section 3, Haier, Rendanheyi, and Zhang Ruimin’s Vision, we explore the history of organizational thinking at Haier, including the development of Zhang's Rendanheyi, and the transition toward the platform organization.

In section 4, The Future of Networks: Platforms and Ecosystems, we explore the transition to the platform organization and the economics of ecosystems.

In section 5, On The Horizon, we will restate some of the key principles explored in the report, and talk a bit about what's ahead.

Let's get started.


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