Open your company up to unexpected opportunities

How might MasterCard – the global payment company known for its tightly controlled operations and 99.999% (“the five nines”) reliability – open itself up to fresh new business opportunities?

The short answer is “application programming interfaces” – better known as APIs. “The way we constructed products was API-first,” explained Michael Miebach, who served as Mastercard’s chief product officer from 2016 to 2020 and currently serves as its CEO.

With dedication, APIs and other digital tools were made available to external developers so that they could then integrate their innovations into the company’s network. Thanks to this initiative, Mastercard eventually established what it calls the Single Front Door, a one-stop shop for all modular services.

The benefits? With a modular setup, flexible scaling on demand became possible, offering new opportunities to meet varied regulatory requirements and global needs. In November 2023, Mastercard received authorization to have its cards linked to China’s biggest payment apps after years of being limited to cross-border services.

Four challenges first

If attaining optionality and speed is important, why don’t more companies do it? Because it’s not easy, it requires grappling with four distinct challenges, described briefly below.

(1) Identifying core capabilities

Look for your company’s capabilities that are (a) relevant to value creation, (b) frequently deployed by your partners, and (c) reflect what your company does best. In short, seek out relevance, frequency, and uniqueness.

(2) Codifying process knowledge

Begin with a narrow, well-defined scope. Here your goal is to make a handful of internal processes available to customers and partners to innovate faster. First, focus on processes that are less sensitive. (You don’t want to start with your most secret and critical process.)

(3) Breaking down complex, monolithic systems into modules

Separate the component elements of your processes and systems. Use APIs to enable modularity by providing a standard way for software applications or components to communicate and exchange data or functionality. That modularity allows for fast changes, such as adding new functionality to a software suite without affecting other components.

(4) Opening your system to the external ecosystem

Your open APIs and other digital interfaces can slash the cost of collaboration and speed up innovation. So, fling your doors open and share your tools with others. We call this engineering your own luck to seize unexpected opportunities.