Platform-levers Amp Up Product Lines
If you want to sound savvy in a business conversation, add the word “Platform” behind another term. Say “The blank platform.” You fill in the blank. Pick almost 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, though, play a major 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 enables 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.
Product Lines and Platform-levers
But a different notion of the 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 the common 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, 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 the opportunity to gain greater leverage in their lines.
You’ll also notice that platform-levers come in different types, sizes, and shapes. Some drive leverage more than others. And because platform-levers go through life cycle stages, they’ll lose their leverage, eventually. A mature, limp platform-lever can be a great burden to a product line.
Most products and services come from platform-levers. But customers don’t recognize platform-levers; instead, they see the products or services. The platform-levers means little to customers but a whole lot to a company producing products and services. OK. So now, let’s look at some platform-levers and their role in product lines.
Table 1 below shares a list of platform-lever types. I don’t mean to suggest these are the only kind. With time, smart product line teams have created many new types. Go back in time forty or fifty years, and you’ll see production lines as the most common platform-lever. The production scale enabled 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.
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.
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.
Strategy Moves and Pivots
The variety of platform-lever types makes strategic moves both genius and necessary. When the move is about an existing product line and platform-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 his industry is changing. 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. There is no leverage. This makes sense when serving the military with its unique performance needs and no large market appeal.
But the communication, broadcast, and data handling markets have many needs. The most common is reliability. That’s where machine learning comes to play. Smart analysis of sensor data enabled by machine learning can “predict” issues and failures. Then machine learning can create solutions before a problem takes hold.
Beyond Technology Add-ons
But adding a technology can cause a challenge in a product line strategy. Typically the first move is to add the new technology as an add-on to an existing design platform-lever. In this case, machine learning would be added to the satellite’s core design platform. But to gain machine learning’s full benefit, it must be built into the platform, not added on top of it. That means the core platform-lever must be a new “clean sheet” design with the machine learning set in. In the satellite business, a newly designed architecture with machine learning set in could be a game-changer.
Pivoting with new platform-levers is happening in every industry. Automobiles, medical equipment, consumer goods, services, and software are all changing. Should you find yourself with a mature platform-lever, you’re also likely to be a sitting duck. Your duck-hunting competitors have probably placed a platform-lever pivot target on your back.
Table 1: Platform-lever Types and Examples
|Production Asset||A chemical reactor, paper-making machine, just-in-time automation||Scale or flexibility|
|Hardware Design||A computer motherboard, a system’s core controller||Design reuse|
|Service System||An automated bank teller, an automated car wash||Automation, speed|
|Software Systems||A software operating system, Integrated application software||Versatility within the intended domain|
|Proprietary Formula||A unique pharmaceutical, molecular structure, formula, complex system||Uniqueness|
|Embedded Infrastructure||An optical fiber network, social network||Connectivity|
|Modular Systems||A roofing system, a closet connection system, integrated automation equipment||Adaptability in use, multiple uses|
|Algorithms, Artificial Intelligence, and Machine Learning||Bank loan screening models, search engines, voice recognition||Rules, judgment, analysis, decision acceleration, understanding|
|Connected Integration (IoT)||Intelligent and integrated HVAC (heating, ventilation, and air-conditioning) controls||The data structure, stack, queues|
|Hybrid and Combination||An automotive assembly (with engine and frames as separate platform-levers)||Multiple|
To learn more about platform-levers and product line strategy please check out these important resources.
- One Day Master Course: Newark 17 Sept; Orlando 6 Nov
- Book: The Profound Impact of Product Line Strategy
- Whitepaper: Good Product Line Strategy Matters. Here’s How to Create One
One Day Master Course: Newark 17 Sept; Orlando 6 Nov
Whitepaper– Good Product Line Strategy Matters. Here’s How to Create One.