From Push to Pull

JSB and I just published a new article in the McKinsey Quarterly – “Push to Pull – The Next Frontier of Innovation.”   I've also posted on my web site a longer working paper that I wrote with JSB on “From Push to Pull – Emerging Models for Mobilizing Resources” for those who want a more detailed perspective.

This material is the opening salvo in our research for a new book. Yes, I know, we’ve just barely published our previous one, but we're already starting to work on a new book. As we were writing The Only Sustainable Edge we became convinced that there is a much bigger story yet to be told. Since we are still at the earliest stages of this research and writing, I would welcome any input or suggestions to make the story sharper and more compelling.

“Push to Pull” is only one slice of this bigger story - it is not the whole story, but it is an important slice.  It describes a fundamental shift in the way we mobilize resources.  Organizational success depends upon effective mobilization of resources.  Getting the right resources to the right place at the right time makes the difference between desired impact and catastrophe – something we learned in graphic detail from Hurricane Katrina and New Orleans.

The distinction between push and pull

Over the past century, institutions have been perfecting highly efficient approaches to mobilizing resources.  These approaches may vary in their details, but they share a common foundation.  They are all designed to “push” resources in advance to areas of highest anticipated need.

In the past decade, we have seen early signs of a new model for mobilizing resources.  Rather than “push”, this new approach focuses on “pull” – creating platforms that help people to reach out, find and access appropriate resources when the need arises.

Now, when JSB and I talk about pull platforms, many executives immediately think of the lean manufacturing techniques pioneered by companies like Toyota back in the 1950’s. In fact, lean manufacturing represents a hybrid between push and pull models – it still contains significant elements of push. We are talking about something even more profoundly rooted in the principles of pull.

Pull and push approaches differ significantly in terms of how they organize and manage resources.  Push approaches typically use “programs” – tightly scripted specifications of activities designed to be invoked by known parties in pre-determined contexts.  Of course, all push approaches are not software programs – this is a broader metaphor to describe one way of organizing activities and resources.  Think of thick process manuals in most enterprises or standardized curricula in most primary and secondary educational institutions, not to mention the programming of network television, and you will see that institutions heavily rely on programs of many types to deliver resources in pre-determined contexts.

Pull approaches, in contrast, tend to be implemented on “platforms” designed to flexibly accommodate diverse providers and consumers of resources.  These platforms are much more open-ended and designed to evolve based on the learning and changing needs of the participants. Rather than seeking to dictate the actions that people must take, pull models seek to provide people on the periphery with the tools and resources (including connections to other people) required to take initiative and creatively address opportunities as they arise. Pull platforms are designed from the outset to handle exceptions, while push programs treat exceptions as indications of failure.

Push models treat people as passive consumers (even when they are producers like workers on an assembly line) whose needs can be anticipated and shaped by centralized decision-makers.  Pull models treat people as networked creators (even when they are customers purchasing goods and services) who are uniquely positioned to transform uncertainty from a problem into an opportunity.

Once again, we’re not using platforms in the literal sense of a tangible foundation, but in a broader, metaphorical sense to describe frameworks for orchestrating a set of resources that can be configured quickly and easily to serve a broad range of needs. Think of Expedia’s travel service or the emergency ward of a hospital and you will see the contrast with hard-wired push programs.

The value of pull models

Why are pull platforms emerging and spreading? Many organizations adopt pull platforms as a way to create more flexibility and cope with greater uncertainty. But early adopters are realizing that there is another more compelling value.  Pull platforms are particularly powerful in fostering innovation, learning and capability building.  In fact, pull platforms are creation platforms.  You can’t anticipate if you are going to innovate, so push programs are not useful in innovation environments.

Here’s the irony.  Push models were originally designed to promote efficiency, yet even here they are failing to deliver.  Advocates of these models acknowledged that these approaches might limit flexibility and constrain creativity, but they argued that was a small price to pay for the opportunity to cut costs.  Yet, as uncertainty increases and competition intensifies, it turns out that push models are less and less able to deliver efficiency.

Push models assume that demand can be predicted reliably enough to define the procedures required to deliver resources to pre-specified locations before the demand actually materializes.  Push models therefore require accurate forecasts to function effectively.  Uncertainty undermines the ability to forecast. This in turn undermines the ability to push resources to the right place at the right time. So, even if efficiency is the primary goal, push approaches are becoming less useful. Pull platforms become extraordinarily efficient in uncertain markets.

Pull platforms are highly scalable as well as flexible because they embed specialized capabilities into distinct layers that can evolve independently.  The lower layers of pull platforms, including such activities as communication and logistics networks tend to focus on high tech capabilities. Upper layers, concentrating on mobilizing individuals and communities to innovate and create new value, tend to focus on high touch capabilities.

Early arenas for pull platforms

These new pull platforms are emerging in very diverse arenas:

• Pull platforms are helping to transform the production and distribution of digital media in areas like blogging and music remixing. But it would be a mistake to view pull platforms as limited to digital “fringes”.
• Global process networks built upon pull platforms are reshaping the global operations of such different and demanding industries as apparel, motorcycles and consumer electronics.
• Learning institutions as diverse as the University of Phoenix and Brown University are deploying pull platforms.

These are not just isolated examples - powerful forces are shaping the need for an alternative approach to mobilizing resources. These forces ensure that this new model will spread to all arenas of human activity.

Forces shaping pull platforms

Five broad forces are shaping the emergence and evolution of pull platforms:

• Increasing uncertainty
• Growing abundance
• Intensifying competition
• Growing power of customers
• Greater emphasis on learning and improvisation

In environments shaped by these forces, push models are breaking under the strain and pull models are beginning to fill in the gaps.

The push to pull spectrum

Of course, pull platforms and push programs are not mutually exclusive.  In fact, pull platforms often contain push programs that can be accessed through their platforms. For example, Amazon or eBay provide robust pull capability for consumers to access on demand an extraordinary abundance of products like books and CD’s. These products were originally made using traditional push manufacturing programs. On the other hand, reflect on the opportunities to further build upon these pull distribution systems by reconfiguring production processes to deliver publishing on demand.

More broadly, however, the forces outlined earlier make it more and more attractive to deploy pull models rather than push models.  At the same time, broader deployment of more flexible technologies, tools and infrastructures makes it more viable to design and manage pull models. As a result, pull models will increasingly displace or marginalize push models in broader arenas of human activity.

Look to the edge for pull platforms

Like many of the most profound business changes, this architectural shift is beginning at the edge:

• It is starting at the edge of enterprises, rather than deep inside of the enterprise, because it is here that the greatest uncertainty exists. It is also here that push models, with their assumption of centralized control, are less viable (unless a company has enormous market power like Wal-Mart).
• Pull platforms are also beginning to take hold in emerging economies like China and India because these platforms are particularly powerful in supporting bootstrapping activity.
• Finally, pull platforms are emerging at the demographic edge – younger generations more comfortable with the technologies and tools emerging on electronic networks are pioneering both the creation and use of pull platforms to create businesses that grow extremely fast with relatively modest investment.

Pull platforms require very different mindsets and management techniques.  At this point, they represent an opportunity for all institutions to embrace.  Over time, however, they will represent a significant competitive challenge for those who remain wedded to push programs. While pull platforms are emerging first on the edge, we all know that the edge eventually becomes the core.

Comments

[enquilenit]

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[Rohan Jayasekera]

I think there's a sixth broad force favouring pull models: increasingly sophisticated information technology. I see at least two reasons: (1) information about actual demand can be rapidly collected, transmitted, and incorporated into production activity, and (2) many variations of a product can be made available cost-effectively. In the most extreme case each unit can be produced only to order and only to spec, but one need not go that far for technology to assist pull models.

For push models, forecasting of demand is a "batch" process done almost as well with 1950s' technology as today's. Pull models by contrast gain sharply from modern real-time information networking.

[William Raiser]

Good paper. Key concepts. I look forward to the book.

I note in the body of the paper you shift from CRM to Customer Managed Relationships. Key for pull perspective.

I think a shift from supply chain management to demand network management fits in a similar manner.

An insight gained from an article read 20 years ago: the opposite of centralization is not decentralization, it is mutual adjustment. Key concept for understanding network operation.

I think you have hit on another key shift. The market economy is the economy of last resort. We are seeing, and you are talking about, the relationship economy. Fits better with European and Asian cultural patterns than US, so the US may be quite slow on the uptake.

[GrahamHill]

John

Another good thought piece.

You may find it interesting to look at John Arquilla & David Ronfeldt's research on "Swarm Warfare" available for free from the Rand Corporation. Their work looks beyond traditional aproaches to warfare such as massing forces to gain a numerical advantage or manoevering forces to take advantages of the enemy's structural weaknesses (both centralised push models), towards swarming where electronically networked but decentralised forces swarm together in response to a perceived threat (a decentralised pull model). Whilst not a replacement for traditional warfare, swarm warfare is much more effective when the enemy is dispersed.

I know many in business have a reluctance to learn from advances in military thinking, however I used some of the swarm thinking in the reorganisation of a major credit card company in the UK to great effect.

To relate to the "edgy" world you talk about, perhaps it is easiest to think of massing as being similar to corporations or their brands, manoevering to departments or marketing promotions, and swarming to stakeholders or customer innovation.

Just a thought.

See http://www.rand.org/pubs/documented_briefings/2005/RAND_DB311.pdf and http://www.rand.org/publications/MR/MR1382/ for more information on swarm warfare

Graham Hill
Independent Management Consultant