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Digitalisation: The Pharmakon of Open Organisations

August 22, 2017 • INNOVATION, TECHNOLOGY, Emerging Ideas

By Albert Meige

The first industrial revolution saw the birth of the idea of an enterprisethe same entity we are familiar with today.1 The creative crucible of the third industrial revolution is in the process of giving rise to a new form of companies. I’m talking about “open organisations”. In this article, I will introduce three characteristics of these open organisations.

 

Last week, while I was in Oslo visiting a client, the receptionist at the hotel asked me if I wished to become a member of their “Club Carlson”. I automatically replied, “No, thank you”.

“But, sir, it’s free,”,he said, “and on top of that I’ll upgrade your room for free”, I’ll admit, I was seduced, and I agreed to join Club Carlson, just to have a better view from my room. But there was more. The receptionist explained that the next time I need to reserve a room, if I do it directly through the Club Carlson site, then, thanks to this magic key, I will be upgraded automatically, and for free! Wow! So… to what do I owe such a boon?

Club Carlson is, in fact, a survival kit. A kit for surviving what, you might ask? It’s a kit for surviving booking.com. Booking.com is twenty years old this year. But in all honesty, did you know this platform existed ten years ago? No, of course not. Today, however, I would bet that the majority of you use booking.com to reserve your hotel rooms. Booking has become a hub you can’t escape. What happened? When the service first appeared, hoteliers and hotel chains were salivating, because Booking was a synonym for new sources of business. Suddenly, everything was possible. Random Australian tourists could find a little bed and breakfast out in the middle of the Jura Mountains. But that was early in the game. Now that Booking is a hub, every hotel has got to be on Booking to survive, and they must pay for it. And now that every hotel is on Booking, the more visible a hotel wants to be, the more they must pay.2 Booking.com has captured the consumer connection, which used to be the province of the hotels – and in so doing, it has captured a great chunk of the profit margin that goes along with that relationship. Club Carlson is the hotel’s attempt to reclaim that connection with the customer.

Platform strategies are in fact one of the principal ingredients of a new form of enterprise. Of a new breed of organisation. I call them “open organisations”.

The example of booking.com perfectly illustrates the so-called “platform” strategy that is systematically implemented by digital stakeholders to disrupt a value chain. The interesting thing is that platform strategies are no longer the sole province of digital stakeholders. As we shall see, platform strategies are in fact one of the principal ingredients of a new form of enterprise. Of a new breed of organisation. I call them “open organisations”.



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About the Author

Albert Meige has been an entrepreneur since his teenage years, when he began by selling magic! He is now the founder and CEO of Presans, a global digital platform of experts. He is also the Director of the Executive MBA of the Institut Mines-Télécom. In 2008, the French École Polytechnique awarded him its Innovation Prize. He has authored several books in his area of expertise, including Innovation Intelligence (2015).

Notes

1. Before this, there were factories, one could use itinerant labour, certain legal structures regarding labour weren’t in place, etc.
2. com forces hotels to offer the cheapest possible room prices to satisfy their clients on the consumer end, while imposing higher commission fees on hotels that want to be listed prominently. This is the model followed by Online Travel Agencies (OTAs).
3. Innovation Intelligence. Absans Publishing (2015).
4. L’innovation ouverte est morte. Vive l’organisation ouverte. (“The Open Innovation is Dead. Long Live the Open Organization!”) Harvard Business Review France (2016).
5. Quand la transition digitale menace l’industrie traditionnelle. (“When the Digital Transition Threatens Traditional Industry.”) Harvard Business Review France (2016).
6. The other characteristic traits will be introduced in future articles; each of these traits will be the subject of detailed pieces.
7. “Industry 4.0 : The Future of Productivity and Growth in Manufacturing Industries,” Boston Consulting Group (2015)
8. https://www.quora.com/How-many-iOS-developers-exist-worldwide
9. Vincent Champain, bâtisseur de plateformes (“Vincent Champain, Platform Builder”), open-your-innovation.com (2017):
10. “Special-forces innovation: how DARPA attacks problems,” Harvard Business Review (2013)

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