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Illuminated Mastercard

Brain Circuits

Open your company up to unexpected opportunities

IbyIMD+ Published 1 July 2024 in Brain Circuits • 3 min read

Treat your organization’s core capabilities as services in order to open up to new options for innovation.  

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.

Further reading:

Engineer your own luck


Mark Greeven

Mark J. Greeven

Professor of Innovation and Strategy at IMD and Chief Executive of IMD China

Mark Greeven is Professor of Innovation and Strategy, and Director of IMD China. As of 1 September 2024 he will be Dean of Asia. He co-directs the Building Digital Ecosystems program and Strategy for Future Readiness programs. Drawing on two decades of experience in research, teaching, and consulting in China, Greeven explores how to organize innovation in a turbulent world. He is ranked on the 2023 Thinkers50 list of global management thinkers.

Howard Yu - IMD Professor

Howard H. Yu

LEGO® Chair Professor of Management and Innovation at IMD

Howard Yu, hailing from Hong Kong, holds the title of LEGO® Professor of Management and Innovation at IMD. He leads the Center for Future Readiness, founded in 2020 with support from the LEGO Brand Group, to guide companies through strategic transformation. Recognized globally for his expertise, he was honored in 2023 with the Thinkers50 Strategy Award, recognizing his substantial contributions to management strategy and future readiness. At IMD, Howard directs the Strategy for Future Readiness and Business Growth Strategies programs.

Jialu Shan 2024

Jialu Shan

Research fellow at the Global Center for digital business transformation

Jialu Shan is a research fellow at the TONOMUS Global Center for Digital and AI Transformation, and an associate research director at the Center for Future Readiness at IMD Business School. Her research areas include digital business transformation, business model innovation and new practices, and corporate governance practices. She is particularly interested in the Asian market. Jialu has a PhD in economics (management) from the Faculty of Business and Economics at the University of Lausanne. Before joining IMD she worked as a lecturer at the International Hotel School of César Ritz Colleges in Brig, Switzerland.


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