Original Study: Lechner, Ch. et al (2023): Obstacles and strategies ecosystem governance: a view form the orchestrator side. Journal of Strategy and Management, July 2023.
The study in one sentence
This comprehensive study, conducted in partnership with Boston Consulting Group, examines the key barriers to platform ecosystem governance and strategies for overcoming them.
Of interest to people who…
... want to set-up a digital platform business
and would like to get an overview of the obstacles and how to overcome them.
What to remember
With the rise of platform ecosystems like Airbnb and Uber, many companies and entrepreneurs are trying to create or transform their businesses into successful platform models, often by copying others or experimenting through trial and error. This study is a valuable resource for building and managing platform ecosystems, analyzing common barriers to growth and strategies for overcoming them. It identifies three main barriers: providing access, scaling, and ensuring fair measurement and distribution of rewards. For example, effective platforms often start with a small, focused offering rather than a full-blown service offering, and they create reward systems to drive loyalty among customers and partners, not just customers. While each platform is unique, this study identifies systematic challenges and solutions and offers a structured approach to managing platform ecosystems. A great first attempt at professionalizing the field.
The most insightful sentence
« New platform ecosystems will likely survive to new
ventures with a high failure rate. While it is often assumed that the scaling
of ecosystems happens somehow ‘automatically’ due to network effects, our
findings show that this understanding is too simplistic. »
The most provocative sentence
« […O]rchestrators should generally refrain from becoming too ‘greedy’ […and] should remember that ecosystems are not one-deal transactions […].Win-win outcomes are not a one-time, pleasant side effect, but they form the basis for ecosystems to sustain and flourish. »
Consequences for managerial practice
If you want to build your business as a platform model, this study provides useful guidance. It helps you focus on three key areas that can create barriers and define your governance around them: 1) Access: Who can use the services and how to ensure efficient and valuable interactions. 2) Scaling: How to onboard more customers smoothly, both technically and process wise. 3) Reward distribution: How to share the value created on the platform, including the typical question of how to split margins for partners and the platform orchestrator.
This study can also serve as a benchmark if you are a partner working with an ecosystem, helping you evaluate the onboarding process, continuous technical improvements, how loyalty is rewarded, and how conflicts are managed. Overall, following these insights can help you avoid conflicts, failures, and risks when building platform businesses, leading to more effective and sustainable growth.
Food for forward-thinking…
The emergence of partnering business models, such as ecosystem platform models, is accelerating: Do we need a new legal entity to structure this type of collaborative value creation, which may be better suited to consider its collective ownership than within the confines of a single company's ownership? We welcome your thoughts and ideas!
PS: I was honored to host a podcast with the author Christoph Lechner on partnering strategies which you can access over our Partnering Leadership Academy site.
