Platform Leverage

Platform-Levers and

Product Line Strategy

“Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.” Archimedes, c. 300 BC

If you want to sound savvy in a business conversation, add the word “Platform” behind a different term. Say “The blank platform.” You fill in the blank. Pick any term. It’s easy, and it’ll sound impressive. That’s because the word “platform” suggests a powerful force. Unfortunately, not all that fills the blank is a platform. Nor does the title mean it delivers platform results.

Real platforms play a significant role in strategy. Most of us recognize Google as a search platform. And we see Android, Amazon, and Apple iTunes as other great examples of platforms. Each enables interaction between producers and consumers. And each allows third parties to add and extract value. In my language, I refer to platforms with third-party contributors as Eco-system platforms. They’re controlled by, but work outside, the organization that created them.

Platform-levers in Product Lines

But a different notion of a platform plays out in a product line strategy. I call it a platform-lever. Notice the “-lever” at the end. I add this to distinguish it from a Eco-system platform. I also hope to drive home the need to use leverage to boost a product line. And in contrast to Eco-system platforms, platform-levers are internal to organizations. Plus, they’re specific to product lines. But before giving examples, allow me to describe more about platform-levers.

What’s important is how product lines gain mightily from platform-levers. That’s because of leverage, and you’ll see it play out in two ways. First is through faster development of individual products spawned from the platform-lever. And second gain is from delivery of higher product performance per unit cost. Quick development tied to improved cost-performance is valuable to any product line strategy. Few product line teams would shun an opportunity to gain greater leverage in their lines.

Shapes, Sizes and Effectiveness

You’ll also notice that platform-levers come in different types, sizes, and shapes. Some create more leverage than others. And because platform-levers go through life cycle stages, they’ll lose their leverage, eventually. Unfortunately, a mature, limp platform-lever can be a great burden to a product line.

In powerful strategies, products and services come from Platform-levers. But you’ll see how customers care only about the products and services, not the Platform-lever. No matter the case,  these sources of leverage can be enormously valuable to a company. They’re vital to a company’s well-being.

So now let’s look at some Platform-levers and their role in product lines.

Table 1 below shares ten Platform-lever types. I don’t mean to suggest these are the only kind. With time, intelligent product line teams have created many new types or classes. Go back fifty or a hundred years, and you’ll see production lines as the most common Platform-lever. Henry Ford taught us that production scale can create products at a lower price with higher performance. Move forward to today, and you’ll see many new Platform-lever types, variants, and combinations. And those who cast an eye to the future will see even more types. The list is not static.

TABLE 1: Ten Platform-lever Types

Platform-Lever TypePlatform-Lever ExampleLeverage Source
Production AssetA chemical reactor, paper-making machine, just-in-time automationScale or flexibility
Hardware DesignA computer motherboard, a system’s core controllerDesign reuse
Service SystemAn automated bank teller, an automated car washAutomation, speed
Software SystemsA software operating system, Integrated application softwareVersatility within the intended domain
Proprietary FormulaA unique pharmaceutical, molecular structure, formula, complex systemUniqueness
Embedded InfrastructureAn optical fiber network, social networkConnectivity
Modular SystemsA roofing system, a closet connection system,  integrated automation equipmentAdaptability in use, multiple uses
Algorithms, Artificial Intelligence, and Machine LearningBank loan screening models, search engines, voice recognitionRules, judgment, analysis,  decision acceleration, understanding
Connected Integration (IoT)Intelligent and integrated HVAC (heating, ventilation, and air-conditioning) controlsThe data structure, stack, queues
BlockchainAn NFT that assigns certification to a tangible or intangible product or object.Scale and meta transfer
Hybrid and CombinationAn automotive assembly (with engine and frames as separate platform-levers)Multiple

Platform-lever Example

To see a platform-lever in action, consider the Samsung “Smart TV.” Samsung uses the same motherboard and software, a system-design platform-lever, across many TV sizes and HD performance levels. And their LED screen production platform-lever produces many sizes to drive up volume and lower price. By combining these two platform-levers, Samsung enables a strong product line.

The gain sought by Samsung is to create different TVs faster and with greater performance at a low cost. This approach differs from single product development where every product is a unique creation.
Companies caught in “one-off and repeat” product development, can also find themselves in a weak spot when competitors introduce new platform-levers. Sadly, most academics and consultants write only about the “one-off and repeat” approach. Their advice for these situations is to double down by improving and adding more “one-off and repeat” development work. For these supposed experts, the notion of leverage is more an afterthought than a strategic move.

Genius Moves and Pivots

The variety of platform-lever types makes strategic moves both genius and necessary. When the move is to revamp a platform-lever completely or to change the type of lever, we call the move a Pivot. Consider an existing product line based on a design platform-lever. This product line’s playing field may change should a competitor carry out a Pivot using an AI platform-lever; let’s say machine learning. Such Pivots are becoming commonplace.

A friend who headed one of the world’s largest satellite companies shared with me how he sees the business changing. He was particularly impressed with how machine learning could change the industry.
Here’s the backdrop. Traditional large satellites have core designs to which auxiliary technologies add functions specific to customer needs.

For this company, manufacturing each satellite is a people-intensive art form. They don’t have a scaled production platform because they customize each satellite to a specific and unique end-use. Consider how the military or spy market demands the latest and greatest for each purchase. This is more a “job-shop” than a Platform-leveraged approach.

Orbiting Products

Other satellite markets look different. You’d find the communication, broadcast, and data handling markets have many needs. Or, as we say in product line strategy, they have many Jobs-to-be-Done. And the most common theme for each job is a penchant for reliability, or as the JTBD experts would say, “to minimize downtime.” That’s where machine learning comes to play. Intelligent analyses of sensor data using machine learning can “predict” issues and failures. This early warning then enables the satellite service to take corrective actions before a problem takes hold.

But adding a unique technology like machine learning can present significant challenges. Typically, the first move is to add new technology as a bolt-on to an existing design, regardless of market or industry. It’s like adding artificial intelligence to the refrigerator already in your kitchen. The refrigerator wasn’t designed for the novel technology, but you’re doing it anyway.

New Technologies and New Platform-levers

The satellite company’s job shop and customization approach presents a dilemma. Every machine learning application will need to be customized to match each satellite’s data and sensor uniqueness. Since machine learning works on the principle of creating algorithms from randomized data, there may be some sense to this approach. But how many downtime failures would you need to build validity into the deep learning algorithm?

Perhaps a more effective approach might be for a core Platform-lever design with a machine learning component that cuts across multiple end applications and customizations.

And here’s the big reason the satellite firm needs a core new Platform-lever design. The Job-to-be-Done outcome is to minimize downtime. It’s not to predict problems. If they wish to fulfill the primary job, they must go beyond predictive machine learning. And they may want to rethink the system boundaries.

Jobs-to-be-Done and Platform-levers

Clearly, they’ll need the means to automate actions that mitigate predicted issues. And depending on how they wish to look at the Job-to-be-Done, they may also need to expand the system to include the TV in your living room plus the equipment to communicate with the satellite.

Notice the Platform-lever insights shared in the satellite example. Setting up a Platform-lever is a deliberate choice. While design engineers always seek component reuse, elevating a component to be a Platform-lever is a conscious strategic choice.

Leveraging The Jobs

The further a common product element takes multiple products toward fulfilling sets of Jobs-to-be-Done outcomes, the more leverage it’s delivering. And the more leverage that’s possible from a component, the more helpful it is to focus on the component as a Platform-lever purposely.

I don’t pretend to be an expert in satellites. But as a strategist, I wonder if a newly designed Platform-lever could be a game-changer. I also wonder how the playing field shifts as competitors purposely create small or mini-satellites with leverage in mind. Is the satellite industry being disrupted?

Disrupting with Platform-levers

Disrupting established businesses with novel Platform-levers is powerful. Consider how Tesla, with its multi-billion dollar battery investment, leaves General Motors’ engine designs and production infrastructure for dead. Or look at how Apple cut out Intel to create greater leverage form a combined M1 chip and IOS Platform-lever. These are serious strategy moves, not just one-off product innovations.

Major strategy moves and pivots by deploying new Platform-levers are happening in every industry. Company after company in automobiles, medical equipment, consumer goods, services, and software are all moving forward with new Platform-levers. And should you find yourself with mature leverage or none at all, your company could be a sitting duck. You may wake up to discover your duck-hunting competitors have already pinned their pivot target to your back.

An Intense Focus

In business, Platform-levers are potent tools. And lacking sufficient leverage may be the biggest reason to cause a business to collapse. Clearly, every company needs to master this powerful performance driver.

It’s one thing to say you understand Platform-levers. It’s an entirely different matter to create and then realize the potential of a superb Platform-lever.

The difference is the intense focus needed to conjure up and carry out the genius of a Platform-lever. This thinking goes beyond the single product innovation approach most managers learn in school or embrace in their jobs. You’ll see major Platform-lever moves require an intangible ingredient that’s never taught — courage. The reason is that an entire organization may be organized and staff to push in a direction that opposes the new Platform-lever.

Platform-lever Genius

The genius and execution work to implant a new Platform-lever into an existing product line doesn’t happen by chance. It demands deliberate investments and intelligent people. Plus, it needs organizational structures to change and processes to be re-worked. These giant steps can happen only when the Platform-lever is called out and managed as a core component of a product line’s strategy.

You’ll see excellence at leading such Platform-lever moves separates the real movers and shakers in a company from the rest.

Organizational Change

The role isn’t for an Intrapreneur or a lean start-up team. These much touted jobs call for end-runs around a core business. Instead, if you wish to advance Platform-levers within an existing product line, you must tackle organizational change head-on. This work isn’t an end-run. The work purposely seeks to change the core business.

It’s revealing when managers in a company disagree on how to define their Platform-levers. A lack of agreement shows the source of leverage is not central to a strategy. And it also suggests their company doesn’t have an intense, deliberate focus on any such product line components. In the product line strategy game, this shortcoming presents an enormous vulnerability. As much as these firms push on one-off innovations, they’re likely to fall to competitors more adept at building and sustaining leverage.

Platform-lever Fluency

I encourage all managers and leaders to learn about Platform-levers and their role in product line strategies. Please don’t expect this knowledge to come to you via trickle-down social media diffusion. Time matters. You don’t want to be the last to embrace Platform-levers in your product lines.

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