Moving from Goods Dominant Logic to Service Dominant Logic?
In the book, The Reciprocity Advantage: A New Way to Partner for Innovation and Growth, the authors give examples and describe the success of TED, IBM, Microsoft, Global Food Safety Initiative, Google, Apple, Airbnb and Tech Shop on creating new partnerships in order to achieve extraordinary growth. They take a step further showing how we can do this ourselves at a low risk laying out at a model on how to engage in these disruptions to participate in evolving your company to this type of platform. It is one of the better books; I have read on platform creation.
The example they use is somewhat of a standard one that I have seen demonstrated about the rail industry. Only if they would have thought (100 years of hindsight helps) that they were really in the communication industry versus just the rail industry.
I enclosed this diagram, basically from the book, to allow you to get a visual description of the platform making steps that they describe in the book. In their summary, the basic criteria for deciding if a new venture is or is not a reciprocity advantage. From the book:
It will be a reciprocity advantage if it:
- builds from an existing right-of-way that you already own
- involves giving away some assets, while still retaining the right-of-way
- enhances your core business
- requires partnering with others who have resources that the founding partner does not have to do something that the founding partner could not do alone
- makes money
- is massively scalable
It will not be a reciprocity advantage if it
- requires you to buy a right-of-way that you do not already own
- cannibalizes the core business
- hurts your core mission
- is completely under your control
I think their description of what you can do boils down to several basic steps:
- Understand you core capabilities
- Seek to partner at what you cannot do alone
- Increase through the partnership(s) to scale
- Combining to create an advantage
It is still important for a company to continue developing its core capabilities. It still requires the efficiency and effectiveness of a traditional growth pattern. But the non-traditional growth will not only expand your business, your partners’ business and your customers’ business but the actual market you participate in. The way they do this is introducing growth by utilizing or even giving away under-valued assets that you have. When you think of the example of the rail industry, think of the permission to allow the rail right-a-way for telegraph poles. You can think of numerous undervalue assets of Amazon, Google, and Apple to name just a few. Below is an outline and modified by me from the book.
I think this outline not only satisfies the idea of the developing The Reciprocity Advantage: A New Way to Partner for Innovation and Growth but is a great basis for discussion on how you might build your own platform. I could also see it being used from transitioning from Goods/Product Dominant Logic to Service Dominant Logic.
Download a PDF with both Diagrams
Lean Marketing eBooks (More Info): Excerpt from the Lean Marketing House