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Scalability and Technology Consulting Advice for SaaS and Technology Companies

Agile and Dealing With The Cone of Uncertainty

July 8, 2018  |  Posted By: Dave Berardi

The Leap of Faith

When we embark on building SaaS product that will delight customers we are taking a leap of faith. We often don’t even know whether or not the outcomes targeted are possible. Investing and building software is often risky for several reasons:

  • We don’t know what the market wants.
  • The market is changing around us.
  • Competition is always improving their time to market (TTM) releasing competitive products and services.

We have to assume there will be project assumptions made that will be wrong and that the underlying development technology we use to build products is constantly changing and evolving. One thing is clear on the SaaS journey – the future is always murky!

The journey that’s plagued with uncertainty for developing SaaS is seen throughout the industry and is evidenced by success and failure from big and small companies – from Facebook to Apple to Salesforce to Google. Google is one of many innovating B2C companies that have used the cone of uncertainty to help inform how to go to market and whether or not to sunset a service. The company realizes that in addition to innovating, they need to reduce uncertainty quickly.

For example, Google Notebook, a browser-based note-taking and information sharing service, was killed and resurrected as part of Google Docs and has a mobile derivative called Keep. Google Buzz, Google’s first attempt at a social network was quickly killed after a little over a year in 2011. These are just a few B2C examples from Google.  All of these are examples of investments that faced the cone of uncertainty. Predicting successful outcomes longer term and locking in specifics about a product will only be wasteful and risky.

The cone of uncertainty describes the uncertainty and risk that exist when an investment is made for a software project. The cone depicts the amount of risk and degree of precision for certainty thru the funnel. The further out we try to forecast features, capabilities, and adoption, the more risk and uncertainty we must assume. This is true for what we attempt to define as a product to be delivered and the timing on when we will deliver it to market. Over time, firms must make adjustments to the planned path along the way to capture and embrace changing market needs.

In today’s market we must quickly test our hypothesis and drive innovation to be competitive. An Agile product development life cycle (PDLC) and appropriately aligned organization helps us to do just that. To address the challenge the cone represents, we must understand what an Agile PDLC can do for the firm and what it cannot do for the firm.


Address the Uncertainty of the Cone

When we use an Agile approach, we must fix time and cost for development and delivery of a product but we allow for adjustment and changes to scope to meet fixed dates. The team can extend time later in the project but the committed date to delivery does not change. We also do not add people since Brooks Law teaches us that adding human resources to a late software project only delays it further.  Instead we accelerate our ability to learn with frequent deployments to market resulting in a reduction in uncertainty. Throughout this process, discovery of both what the feature set needs to be for a successful outcome and how something should work is accomplished.

Agile allows for frequent iterations that can keep us close to the market thru data. After a deployment, if our system is designed to be monitored, we can capture rich information that will help to inform future prioritization, new ideas about features and modifications that may be needed to the existing feature set. Agile forces us to frequently estimate and as such produce valuable data for our business. The resulting velocity of our sprints can be used to revise future delivery range forecasts for both what will be delivered and when it will be delivered. Data will also be produced throughout our sprints that will help to identify what may be slowing us down ultimately impacting our time to market. Positive morale will be injected into the tams as results can be observed and felt in the short term.

What agile is not and how we must adjust?

While using an Agile method can help address the cone of uncertainty, it’s not the answer to all challenges. Agile does not help to provide a specific date when a feature or scope will be delivered. Instead we work towards ranges. It also does not improve TTM just because our teams started practicing it. Company philosophies, principles, and rules are not defined through an Agile PDLC. Those are up to the company to define. Once defined the teams can operate within the boundaries to innovate. Part of this boundary definition needs to start at the top. Executives need to paint a vivid picture of the desired outcome that stirs up emotion and can be measurable. The vision is at the opening of the cone. Measurable Key Results that executives define to achieve outcomes allow for teams to innovate making tradeoffs as they progress towards the vision. Agile alone does not empower teams or help to innovate. Outcomes, and Key Results (OKRs) cascaded into our organization coupled with an Agile PDLC can be a great combination that will empower teams giving us a better chance to innovate and achieve desirable time to market. Implementing an OKR framework helps to remove the focus of cranking out code to hit a date and redirects the needed attention on innovation and making tradeoffs to achieve the desired outcome.

Agile does not align well with annual budget cycles. While many times, an annual perspective is required by shareholders, an Agile approach is in conflict with annual budgeting. Since Agile sees changing market demands, frequent budget iterations are needed as teams may request additional funding to go after an opportunity. It’s key that finance leaders embrace the importance of adjusting the budgeting approach to align with an Agile PDLC. Otherwise the conflict created could be destructive and create a barrier to the firms desired outcome.

Applying Agile properly benefits a firm by helping to address the cone and reducing uncertainty, empowering teams to deliver on an outcome, and ultimately become more competitive in the global marketplace. Agile is on the verge of becoming table stakes for companies that want to be world class. And as we described above noting the importance of a different approach to something like budgeting, its not just for software – it’s the entire business.

Let Us Help

AKF has helped many companies of all sizes when transitioning to an organization, redefining PDLC to align with desired speed to market outcomes, and SaaS migrations. All three are closely tied and if done right, can help firms compete more effectively. Contact us for a free consultation. We would love to help!


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Marriage counseling for technology and business partners!

July 8, 2018  |  Posted By: Dave Swenson

AKF often finds itself required to act as a marriage counselor trying to improve the relationship between technology and business ‘spouses’. In fact, we rarely find the relationship between these partners without at least some opportunity for a 3rd party, external, unbiased perspective to produce some suggestions. Given the backgrounds of the prototypical CEO or CTO, it is no surprise there are misunderstandings, miscommunication, and misalignment – there is a substantial experiential chasm between the two…

Experiential Chasm

Recognizing how big this chasm, where it is narrow vs. wide between the two partners is vital to bridging this gap. One of the key aspects we try to immediately ascertain is whether there is a true partnership in place, versus a customer / order taker mindset. How much trust is currently present? Is a single language being used by the two, or is it bits and bytes vs. $$$?

Whether you are a CTO or a business executive, we suggest you go through the following set of questions. Even better, ask your tech or business partner to do their side and discuss and compare! Additionally, this self-analysis shouldn’t occur only at the highest levels, but all throughout the organization, particularly if you’re organizationally aligned.

Technology Leader

 

Questions for Technology Leaders:
  • When did you last come up with a proposal to increase revenue? The best and perhaps most extreme, example of this is AWS, where the technology team took an internal solution built to improve Amazon developer productivity, recognized that all developers must face the same infrastructure challenges, and proposed it to Bezos as a new business line. Are you constantly seeking out ways in product, marketing, sales, technology to generate additional revenue, or solely focused on cost containment?
  • Do you understand the balance sheet, statement of cash flows and income statement of your company? These artifacts describe how the overall business community, your investors, are measuring you. Learning the meaning of these documents aids in spanning the bits & bytes vs. $$$ language barrier. This is where getting an MBA provides the most value.
  • Can you represent the importance of addressing technical debt to your business peers? You are responsible for the technical debt in your codebase, not your business. If you can’t explain the true ongoing cost of the incurred debt, if you can’t justify the periodic pay down of that debt, you frankly are failing as a technology leader, at least if you have a business partner willing to listen.
  • Can you state the highest priority issues facing your business peers today? We love the following quote from Camille Fournier ( former CTO of Rent the Runway and author of The Manager’s Path):

    “If the CTO does not have a seat at the executive table and does not understand the business challenges the company is facing, there is no way the CTO can guide the technology to solve those problems”

  • Do you feel your team, your engineers, understand how their daily activities affect the business and your customers? I once left a company producing a relational database to then join a startup that had built its application on top of that RDBMS. I quickly found issues that I knew could easily and cheaply be addressed, but had never heard of these pain points until I personally experienced them! I vowed to never be so removed and distant from my customers again. Zappos requires all new employees to take a month long customer service stint, spending 40 hours on the phones. During the holiday peak, all employees are expected to jump on the phones to ensure the same level of response as the rest of the year. Don’t just “eat your own dog food”, but understand how your customers eat it.
  • Do your engineers understand what each functional product component costs to build, maintain, and support - relative to the value it brings to the business? Do they push back against product and business when there’s a minimal or even negative ROI? A great vehicle to explain revenue flow is a Dupont diagram, mapping out the user experience flow, and assigning value across that flow. That value makes it clear that say, a .5% improvement in relevant search results can turn into a .025% uptick in items in cart, that turns into $X increase in revenue.
  • Do you provide early feedback on the likelihood of making key dates? Is that feedback consistently incorrect? If you’ve ever had your house remodeled, you’ll agree that there’s little that is more frustrating than a contractor who consistently under-delivers, and it late on agreed to delivery dates. You’ve got plans hinging upon the construction completion date, and when that date slips, it destroys your plans. Your business peers feel the same way when your date slips, or scope gets cut. Are you actively seeking out the causes of such delays? How can you be transparent with your partners when you don’t understand the causes?
  • Does your technology team measure themselves against metrics that are meaningful to the business? Ensure your teams are measuring the outcome of their work, not simply the completion and delivery of that work. And, that outcome measurement should be made in business terms. Velocity should always be measured, but an increase in velocity is frankly less important than moving targeted business needles in the desired direction!
  • What are you least transparent about, and why? Typically, the issues we are most reluctant to share are those we ourselves are uncomfortable with. The answer to this question can show you the areas where you are paying the least attention.

Business Executive
Questions for Business Executives:
  • What is your reaction when you hear that a date has slipped? “Shit happens” is too simple of an explanation, but there are many reasons why a key date slips. There might have been a change in prioritization, driven from the highest levels. There could have been critical site issues that pulled the team away from new functionality. The scope could have been grossly underestimated, or have grown for innumerable reasons along the way. The key thing is that your technology partner should be able to explain the causes - so don’t be afraid to ask for an explanation. Just don’t start the conversation by pointing a finger.
  • Do you feel technology as a whole understands the business? Are engineers close enough to your customers to really understand the value you bring them? I am always dismayed when I find engineers who don’t understand what value, and how, your product provides the customer. An engineer shouldn’t only be motivated by technology problems, but should appreciate the value their product provides. I had the great pleasure of witnessing a company adopt Agile, resulting in tighter bonds between customers, business, and technology. A particular engineer had never understood the value of their product, not to just to their immediate customers but their customers’ customers. As this was a medically-oriented product, that end value was basically a better life. The engineer had worked at this company for a few years, yet never witnessed the true value of the product he had been building – a tragedy in my book. Make the effort to ensure everyone in your company understands the value your products provide, and the revenue stream flowing into the company – it will absolutely be worth the investment!
  • Do you as a business leader spend as much time attempting to understand the technology team as they are hopefully trying to learn to read financial statements? Any time? I absolutely love when a business leader is present at an AKF workshop/engagement. I certainly appreciate the dedication of time, but more importantly, the desire to better understand. Have you asked your technology team for a walkthrough of how the systems work? What their challenges are?
  • Do the business leaders understand how to ask questions to know whether dates are both aggressive and achievable? Your car has a redline. Do you typically exceed that redline RPM? Doubtful. Do you understand when your technology team has over-extended themselves? When they have relied upon heroics to meet a delivery?
  • Does the business spend time in the beginning of a product life cycle figuring out how to measure success? The entire company, business/support/sales/marketing/product/technology teams should be driving to achieve important business goals, and measure themselves by the progress, the outcomes, towards those goals. Delivering new functionality is critical, but more important are the improvements in business metrics that functionality brings. Are you measuring how you are affecting business metrics?

Questions for Both:
  • What are your shared goals? We are firm believers in OKRs (Objectives & Key Results), shared across the entire company. Alignment around these goals help frame discussions.
  • Who gives more than takes? How are compromises reached? There should be no real scorecard on this (classic passive/aggressive move, don’t go there), but can you provide examples of where you met in the middle? As in every relationship, it is critical to both give and take.
  • Do you meet mostly by exception? When was the last time you did lunch? I hated my dentist for years, until I met him on a soccer field and saw the whole individual, not just the guy that causes me pain. Commit to meeting your technology/business partner on a regular basis, including periodic out-of-the-office meetings.
  • What is your “Marriage Math”? Psychologist John Gottman, Ph.D., when trying to determine a methodology to predict which marriages will last and which will end in a divorce, found that when the ratio of positive to negative interactions fell below 5:1 (5 positive for every negative interaction), divorce was likely. Do you have a healthy line of communication with your partner, or does the communication quickly degrade into contempt and name calling?

Hopefully now you agree that a look at your relationship with your technology/business partner is of value. Every relationship requires investment and commitment on both sides. Consider bringing AKF to help facilitate these discussions – we are excellent marriage counselors.

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Crossing the People Chasm Within Your Organization

June 6, 2018  |  Posted By: Pete Ferguson

Crossing the People Chasm Within Your Organization

In Geoffrey Moore’s book “Crossing the Chasm,” he argues there is a chasm between the early adopters of a product (the technology enthusiasts and visionaries) and the early majority (the pragmatists).  He illustrates well the differences in each of their self-interests and their very differing needs for security verses willing to take on risk.

People’s talents, attitudes, and skills similarly must cross the rapid growth chasm within your organization if your company is to remain viable and competitive.

As AKF Partners assess fast-growing companies in technical due diligence engagements, we often observe Moore’s chasm principle in play with an organization’s people and the ability for legacy employees to make the jump to the “next big thing” and keep up with explosive growth.  Or conversely, we have also seen the “why change” attitude greatly hinder and blindside the scalability of a fledgling company. 

The Chasm From Startup to Established Company

Young, well-funded startups have a lot of flare that Millenials and corporate escapees love – free food, eccentric workplaces, schedule flexibility, and very little bureaucracy, policy, or procedure.  This works very well for small, talented teams during a very scrappy period of rapid growth where the common goals of the organization are well-known and lived and breathed on a daily basis and personal and group conversations with the CEO and CTO occur regularly, sometimes daily.  Often there is minimal rigor around Agile rituals – and during periods of startup and rapid growth, their likely is very little time to formalize processes and the outcomes - 100-200% customer acquisition and profits - can be mistaken as a “full steam ahead” desire to not make any changes.

Recently we worked with a company that was a decade old and was fairly large compared to many startups we see in our technical due diligences for investors.  The founders has seen the need to bring in experienced and open-minded senior leadership and it was inspiring to see the the vigor, enthusiasm, growth, and speed of a young fledgling company, but with defined metrics and compliance to set ground rules.

There was not an observed bureaucracy.  There was clear direction.

As unfortunately this is more of an outlier than it should be, I was impressed and wanted to know what set them apart from other more mature companies I have worked with or worked for and I found several differentiators.

My observations of companies who bridge the organizational chasm of growth:

  • Successful companies do not confine themselves to one segment of the market - they are thoughtful and disciplined when taking on new segments.  They follow Moore’s observations well and saturate one small subset of a new market with marketing, sales, customer service and provide steep discounts to get a foothold.  Once established, they expand horizontally within the subset and rinse and repeat until they are the market leader.  This allows them to fail forward fast through constant innovation and iterations.  This requires the people in their organizations to have an Agile mindset and not rest on their laurels.
  • Successful companies have teams with a good diversity of opinions, but are unified in how they execute on their plan.  The senior leadership are very successful in constantly communicating the vision of the company through desired outcomes and allow teams the autonomy to get there however they can.  Because the focus is on the outcome rather than the process, there is very little bureaucratic red tape, trust is very high, and teams are not afraid to fail fast, learn, and reiterate more successfully.
  • Successful companies keep things simple and team members are onboard with the company philosophy and understand how their role fits into the larger scheme of things.  Google pioneered OKRs - “Objectives and Key Results” - as how they measure success within their organization.  OKRs allow for nested outcomes to be defined, aligning teams with the broader company goal and successful companies have the common thread of how success is defined through outcomes from the top to the bottom of the org chart.

While some of the companies highlighted in Moore’s 1999 version of the book eventually could not cross the chasm with newer products (Blackberry, 3Comm/Palm Pilot), the principles he outlined are common to companies who are enduring today (Apple desktop to MP3 player to mobile phone/tablet to watch to … [insert Apple’s next category DOMINATOR here]). 

When looking at products, according to Moore, the marketer should focus on one group of customers at a time, using each group as a base for marketing to the next group to create a bandwagon effect with momentum that spreads to others in the next marketing segment.  The focus on each segment is intense and an “all hands on deck” blitz approach to include marketing, software engineering, product, customer service, sales, and others.

Similarly when it comes to what is going on inside of organizations, it is important to ensure your people cross the chasm of change required for your products to remain viable and enduring.  Successful companies know that either their people have to make the transition to new skill sets/mindsets or they will need to be transitioned out of the company.  Either way it’s important to inject new people with the experience needed into the organization.  At AKF, we refer to this as Seed, Feed, and Weed.

What we see in successful companies is an early focus on standardization but with freedom for exploration.  Allowing each team to use their own communication devices (Slack, Hive, Spark) and Agile methods is something that does not scale well.  But seeking input from team members and having each team follow a standard software development cycle with similar Agile methodology does scale well and allows teams to interoperate without administrative and communicative friction.

Conclusions

Successful companies endure because individuals are allowed autonomy to reach shared outcomes.  Tools are provided to help individuals succeed, fail forward fast, learn and share their learning, automate mundane tasks, and are not a bureaucratic bottleneck.  To remain successful, companies must constantly focus on how to take their team members with them through the chasms of growth into new and emerging markets by continually upgrading their skills and contribution to the company desired outcomes.

Measuring success is not just in the stock price (many failing companies - i.e. Palm Pilot - had a good stock price while the internal decay had been going on for several quarters), it must be a thorough measurement of all aspects of the company’s technical abilities - architecture, process, organization, and security. 

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We’d love your feedback and an opportunity to see how AKF Partners can help your organization maximize outcomes. Contact us now.

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Enabling TTM With Contributor Model Teams

May 6, 2018  |  Posted By: Dave Berardi

Enabling TTM With Contributor Model Teams

We often speak about the benefits of aligning agile teams with the system’s architecture.  As Conway’s Law describes, product/solution architectures and organizations cannot be developed in isolation.  (See https://akfpartners.com/growth-blog/conways-law) Agile autonomous teams are able to act more efficiently, with faster time to market (TTM).  Ideally, each team should be able to behave like a startup with the skills and tools needed to iterate until they reach the desired outcome.

Many of our clients are under pressure to achieve both effective TTM and reduce the risk of redundant services that produce the same results. During due diligence, we will sometimes discover redundant services that individual teams develop within their own silo for a TTM benefit.  Rather than competing with priorities and waiting for a shared service team to deliver code, the team will build their own flavor of a common service to get to market faster.

Instead, we recommend a shared service team own common services. In this type of team alignment, the team has a shared service or feature on which other autonomous teams depend. For example, many teams within a product may require email delivery as a feature.  Asking each team to develop and operate its own email capability would be wasteful, resulting in engineers designing redundant functionality leading to cost inefficiencies and unneeded complexity.  Rather than wasting time on duplicative services, we recommend that organizations create a team that would focus on email and be used by other teams.

Teams make requests in the form of stories for product enhancements that are deposited in the shared services team’s backlog. (email in this case) To mitigate the risk of having each of these requesting teams waiting for requests to be fulfilled by the shared services team, we suggest thinking of the shared services as an open source project or as some call it – the contributor model.

Open sourcing our solution (at least internally) doesn’t mean opening up the email code base to all engineers and letting them have at it.  It does mean mechanisms should be established to help control the quality and design for the business. An open source project often has its own repo and typically only allows trusted engineers, called Committers, to commit. Committers have Contribution Standards defined by the project owning team. In our email example, the team should designate trusted and experienced engineers from other Agile teams that can code and commit to the email repo. Engineers on the email team can be focused on making sure new functionality aligns with architectural and design principles that have been established. Code reviews are conducting before its accepted. Allowing for outside contribution will help to mitigate the potential bottleneck such a team could create.

Now that the development of email has been spread out across contributors on different teams, who really owns it?

Remember, ownership by many is ownership by none.  In our example, the email team ultimately owns the services and code base. As other developers commit new code to the repo, the email team should conduct code, design, and architectural reviews and ultimately deployments and operations.  They should also confirm that the contributions align with the strategic direction of the email mission.  Whatever mechanisms are put in place, teams that adopt a contributor model should be a gas pedal and not a brake for TTM.

If your organization needs help with building an Agile organization that can innovate and achieve competitive TTM, we would love to partner with you. Contact us for a free consultation.

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The Top Five Most Common Agile PDLC Failures

April 27, 2018  |  Posted By: Dave Swenson
Top Five Agile Failures

Agile Software Development is a widely adopted methodology, and for good reason. When implemented properly, Agile can bring tremendous efficiencies, enabling your teams to move at their own pace, bringing your engineers closer to your customers, and delivering customer value
quicker with less risk. Yet, many companies fall short from realizing the full potential of Agile, treating it merely as a project management paradigm by picking and choosing a few Agile structural elements such as standups or retrospectives without actually changing the manner in which product delivery occurs. Managers in an Agile culture often forget that they are indeed still managers that need to measure and drive improvements across teams.

All too often, Agile is treated solely as an SDLC (Software Development Lifecycle), focused only upon the manner in which software is developed versus a PDLC (Product Development Lifecycle) that leads to incremental product discovery and spans the entire company, not just the Engineering department.


Here are the five most common Agile failures that we see with our clients:

     
  1. Technology Executives Abdicate Responsibility for their Team’s Effectiveness

Management in an Agile organization is certainly different than say a Waterfall-driven one. More autonomy is provided to Agile teams. Leadership within each team typically comes without a ‘Manager’ title. Often, this shift from a top-down, autocratic, “Do it this way” approach to a grass-roots, bottoms-up one sways way beyond desired autonomy towards anarchy, where teams have been given full freedom to pick their technologies, architecture, and even outcomes with no guardrails or constraints in place. See our Autonomy and Anarchy article for more on this. 


Executives often become focused solely on the removal of barriers the team calls out, rather than leading teams towards desired outcomes. They forget that their primary role in the company isn’t to keep their teams happy and content, but instead to ensure their teams are effectively achieving desired business-related outcomes.


The Agile technology executive is still responsible for their teams’ effectiveness in reaching specified outcomes (e.g.: achieve 2% lift in metric Y). She can allow a team to determine how they feel best to reach the outcome, within shared standards (e.g.: unit tests must be created, code reviews are required). She can encourage teams to experiment with new technologies on a limited basis, then apply those learnings or best practices across all teams. She must be able to compare the productivity and efficiencies from one team to another, ensuring all teams are reaching their full potential.

     
  1. No Metrics Are Used

The age-old saying “If you can’t measure it, you can’t improve it” still applies in an Agile organization. Yet, frequently Agile teams drop this basic tenet, perhaps believing that teams are self-aware and critical enough to know where improvements are required. Unfortunately, even the most transparent and aware individuals are biased, fall back on subjective characteristics (“The team is really working hard”), and need the grounding that quantifiable metrics provide. We are continually surprised at how many companies aren’t even measuring velocity, not necessarily to compare one team with another, but to compare a team’s sprint output vs. their prior ones. Other metrics still applicable in an Agile world include quality, estimation accuracy, predictability, percent of time spent coding, the ratio of enhancements vs. maintenance vs. tech debt paydown.

These metrics, their definitions and the means of measuring them should be standardized across the organization, with regular focus on results vs. desired goals. They should be designed to reveal structural hazards that are impeding team performance as well as best practices that should be adopted by all teams.

     
  1. Your Velocity is a Lie

Is your definition of velocity an honest one? Does it truly measure outcomes, or only effort? Are you consistent with your definition of ‘done’? Take a good look at how your teams are defining and measuring velocity. Is velocity only counted for true ‘ready to release’ tasks? If QA hasn’t been completed within a sprint, are the associated velocity points still counted or deferred?

Velocity should not be a measurement of how hard your teams are working, but instead an indicator of whether outcomes (again, e.g.: achieve 2% lift in metric Y) are likely to be realized - take credit for completion only when in the hands of customers.

     
  1. Failure to Leverage Agile for Product Discovery

From the Agile manifesto: “Our highest priority is to satisfy the customer through early and continuous delivery of valuable software”. Many companies work hard to get an Agile structure and its artifacts in place, but ignore the biggest benefit Agile can bring: iterative and continuous product discovery. Don’t break down a six-month waterfall project plan into two week sprints with standups and velocity measurements and declare Agile victory.


Work to create and deliver MVPs to your customers that allow you to test expected value and customer satisfaction without huge investment.

     
  1. Treating Agile as an SDLC vs. a PDLC

As explained in our article PDLC or SDLC, SDLC (Software Development Lifecycle) lives within PDLC (Product Development Lifecycle). Again, Agile should not be treated as a project management methodology, nor as a means of developing software. It should focus on your product, and hopefully the related customer success your product provides them. This means that Agile should permeate well beyond your developers, and include product and business personnel.


Business owners or their delegates (product owners) must be involved at every step of the PDLC process. PO’s need to be embedded within each Agile team, ideally colocated alongside team members. In order to provide product focus, POs should first bring to the team the targeted customer problem to be solved, rather than dictating only a solution, then work together with the team to implement the most effective solution to that problem.



AKF Partners helps companies transition to Agile as well as fine-tune their existing Agile processes. We can readily assess your PDLC, organization structure, metrics and personnel to provide a roadmap for you to reach the full value and benefits Agile can provide. Contact us to discuss how we can help.


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Achieving Results, Culture, and the AKF Equation

April 24, 2018  |  Posted By: Marty Abbott

We can tell a lot about a company within the first hour or so of any discussion.  Consider the following statement fragments:

“We have a lot of smart people here…”

Or

“We have some of the hardest working engineers…”

Contrast these with the following statement fragments:

“We measure ourselves against very specific business KPIs…”

Or

“We win or lose daily based on how effectively we meet our customer expectations…”

There is a meaningful difference in the impact these two groups of statements have on a company’s culture and how that culture enables or stands in the way of success.  The first group of statements are associated with independent variables (inputs) that will rarely in isolation result in desired outcomes (dependent variables).  When used in daily discourse, they reinforce the notion that something other than outcomes are the things upon which a company prides itself.  Our experience is that these statements create an environment of hubris that often runs perpendicular to, and at best in no way reinforces, the achievement of results.  Put another way, when we hear statements like this, we expect to find many operational problems.

The second group of statements are focused on meaningful and measurable outcomes.  The companies with which we’ve worked that frequently communicate with these statements are among the most successful we’ve seen.  Even when these companies struggle, their effort and focus is solidly behind the things that matter – those things that create value for the broadest swath of stakeholders possible.

The point here is that how we focus communication inside our companies has an important impact on the outcomes we achieve.


Outcomes First

Success is often a result of several independent variables aligning to achieve a desired outcome.  These may include, as Jim Collins points out, being in the right place at the right time – sometimes called “luck”.  Further, there is rarely a single guaranteed path to success; multiple paths may result in varying levels of the desired outcome.  Great companies and great leaders realize this, and rather than focusing a culture on independent variables they focus teams on outcomes.  By focusing on outcomes, leaders are free to attempt multiple approaches and to tweak a variety of independent variables to find the most expedient path to success.  We created the AKF Equation (we sometimes refer to it as the AKF Law) to help focus our clients on outcomes first:

Two very important corollaries follow from this equation or “law”:

And…


Examples of Why Results, and Not Paths Matter

Intelligence Does Not Equal Success

As an example of why the dependent variable of results and not an independent variable like intelligence is most important consider Duckworth and Seligman’s research.  Duckworth and Seligman and associates (insert link) conducted a review of GPA performance in adolescents.  They expected to find that intelligence was the best indication of GPA.  Instead, they found that self-discipline was a better indication of the best GPAs:

Lewis Terman, a mid-20th century Stanford Pyschology professor hypothesized that IQ was highly correlated with success in his famous termite study of 1500 students with an average IQ of 151.  Follow on analysis and study indicated that while these students were successful, they were half as successful as a group of other students with a lower IQ.

Chris Langan, the world’s self-proclaimed “most intelligent man” with an IQ of 195 can’t seem to keep a job according to Malcolm Gladwell.  He’s been a cowboy, a stripper, a day laborer and has competed on various game shows.

While we’d all like to have folks of average or better intelligence on our team, the above clearly indicates that it’s more important to focus on outcomes than an independent variable like intelligence.

Drive Does Not Equal Success
While most successful companies in the Silicon Valley started with employees that worked around the clock, The Valley is also littered with the corpses of companies that worked their employees to the bone. Just ask former employees of the failed social networking company Friendster.  Hard work alone does not guarantee success.  In fact, most “overnight” success appears to take about 10,000 hours of practice just to be good, and 10 years of serious work to be truly successful (according to both Ramit Sethi and Malcolm Gladwell.)

Hard work, if applied in the right direction and to the right activities should of course help achieve results and success.  But again, it’s the outcome (results and success) that matter.


Wisdom Does Not Equal Success
Touting the age and experience of your management team?  Think again.  There’s plenty of evidence that when it comes to innovative new approaches, we start to “lose our touch” at the age of 40.  The largest market cap technology companies of our age were founded by “youngsters” – Bezos being the oldest of them at the age of 30.  Einstein posited all of his most significant theories well before the age of 40 – most of them in the “miracle year” at the age of 26 in 1905.  The eldest of the two Wright Brothers was 39.

While there are no doubt examples of successful innovation coming after the age of 40, and while some of the best managers and leaders we know are over the age of 40, wisdom alone is not a guarantee for success.


Only Success = Success

Most of the truly successful and fastest growing companies we know focus on a handful of dependent variables that clearly identify results, progress and ultimately success.  Their daily manners and daily discourse are carefully formulated around evaluation of these success criteria.  Even these company’s interaction with outside firms focuses on data driven indications of success time and time again – not on independent variables such as intelligence, work ethic, wisdom (or managerial experience), etc.

These companies identify key performance indicators for everything that they do, believing that anything worth doing should have a measurable value creation performance indicator associated with it.  They maniacally focus on the trends of these performance indicators, identifying significant deviations (positive or negative) in order to learn and repeat the positive causes and avoid those that result in negative trends.  Very often these companies employ agile planning and focus processes similar to the OKR process.

The most successful companies rarely engage in discussions around spurious relationships such as intelligence to business success, management experience to business success, or effort to business success.  They recognize that while some of these things are likely valuable in the right proportions, they are rarely (read never) the primary cause of success. 


AKF Partners helps companies develop highly available, scalable, cost effective and fast time-to-market products.  We know that to be successful in these endeavors, companies must have the right people, in the right roles, with the right behaviors - all supported by the right culture.  Contact us to discuss how we can help with your product needs. 

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How to write concisely

April 11, 2018  |  Posted By: Geoffrey Weber

The Three Sentence Rule

Variations of the Three Sentence Rule have been around for a long time.  The differences are multiplicative but the base rule is a useful and often necessary tool to teach concision to the wordy.

Say what you need to say in THREE sentences, or less.

Anyone who has been through flight school learns how to be concise on the radio.  Who are you?  Where are you?  What do you want?  That happens to be three sentences.  “Palo Alto Tower, Cessna 15957X; 5 miles southwest of SLAC with information Echo; request landing.”  The need to be precise, accurate and speedy is a requirement at a tower as busy as Palo Alto tower.  Controllers have no patience because there are 12 other aircraft waiting to communicate.

As technologists, we are generally rewarded for producing details, the more the better.  Engineers have to be obsessed with substance; their work is about precision and there are no shortcuts when it comes to building complex tools.  It wouldn’t make any sense to try and distill how Cassandra compares to a relational database, in three sentences, in a room filled with colleagues, at a meet-up.

But what if our CEO asks us about Cassandra?  How can we possibly explain to someone who is just a wee bit tech-illiterate the differences between two very different data stores? Moreover, why on earth would we try and distill that down to three sentences??  Let’s start at the beginning… before there were databases there were Hollerith Cards…

Lack of brevity is a death sentence to any technologist who finds themselves interacting with non-technologists on a regular basis.  We see this as a common anti-pattern for CTOs; some never learn the difference between a novel, a paragraph, or sentence and why each has utility.

The controller in the tower could care less about why we’re in an airplane today, that we’re stopping at the restaurant for the traditional $100 hamburger and that we need to be home for dinner tonight:

  • Who are you?
  • Where are you?
  • What do you want?

Rewind:

  • Cassandra is a new database technology.
  •  
  • It’s very different than what we use today.
  •  
  • It will lower costs in the next 12 months.
  •  

That is the CEO-version of Cassandra in three sentences.  “What is it called, why should I remember it, what does it do for me?”

At AKF Partners, we believe that technology executives need to start practicing a version of the three sentence rule as soon as they transition into their first leadership role.  Specialists in Operations roles have an advantage because of the daily chaos and need for ongoing communications: “Customer sign-in unavailable for 15 minutes; 100% of our customers are impacted for 15 minutes; we are restarting the service for 100% operations in 10 minutes—update in 20 minutes.”

  • What happened?
  • What is the impact?
  • When is it going to be fixed?

There’s a practical reason for such precision: most CEOs are consuming information on tiny screens, sometimes over really bad internet (Detroit Airport) at 2 in the morning, and news also just arrived about a sales crisis in Europe, there’s a supply-chain issue in India, and the Wall Street Journal is doing a feature about the product that’s going live next week.  If we mentioned Hollerith, or even thought about it for a second, we’re Exploring Alternative Employment.  If they have a moment to breath, they can ask for more detail.  Or maybe next week.

Sometimes we’re required to communicate when there’s no answer.  Try this:

  • Impact update,
  • Standard procedures failed, assembled SWAT,
  • Updates every 15 minutes until resolution.

An equally important rule for executives is the “No Surprise Rule” (stay tuned) and zero sentences are as fatal as 4 sentences at the wrong time.  Keeping a CEO waiting for 2 hours until root cause is determined is stupid.

The final place to consider the Three Sentence Rule is the boardroom itself.  Most boards members are not going to read through the 200 page board deck, and our ten minutes to discuss the Cassandra project is unlikely to resonate with most of the attendees.  Up and coming executives understand the need for absolute precision.  Steve Jobs could do it with a single slide:

Three sentences, if you count the background gradient as a sentence. 

For the Board:

  • We’re introducing new technology next fiscal year.
  • It’s called Cassandra.
  • A year from now I will demonstrate how it increased EBITDBA by $2M.

In summary:

  • Anything can be explained in 3 sentences
  • Even concepts so fantastic they seem magical
  • If you don’t believe me, Books in 3 Sentences

At AKF Partners, we can help with mentoring, coaching and leadership training. 

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Balancing Team Autonomy and Anarchy

March 19, 2018  |  Posted By: Daniel Hanley

Agile teams often seem to be confused with the meaning and value of autonomy within a team.  Is it the autonomy to decide review what path to take to accomplish a goal?  Is it the autonomy to choose what tools and processes they will employ to accomplish that goal?  Is it both?  To answer this, we need to first unlock the riddle of where autonomy drives value creation and where and how it destroys value within an enterprise.


Balancing Team Autonomy and Anarchy
As an aid to this discussion, consider the following analogy:  We have the autonomy to determine what roads and paths we will take to a destination when driving a vehicle, but we are governed by speed limits, right of way (which side to drive on, stop signs, stop signals and other road signs), emission standards, and both vehicle and personal licensing.  Put another way, we are completely empowered to determine WHAT path we take, and WHY we take it.  We are much more limited in HOW we get to a place (on road, off road, speed, only licensed vehicles, etc) and WHO can do it (only sober, licensed drivers).  How does this apply to a fully autonomous technology team?  The value-creating autonomy within a team deals with WHAT paths a team takes to accomplish a goal and the reasoning as to why that approach is valuable.  A failure to provide structure and rules for HOW something is accomplished through architectural principles, coding standards, development standards, etc. can start to escalate the costs of development and cause repeating failures maintenance.  Not sharing best practices through standards means that teams are bound to repeat mistakes and cause customer interruptions.  While there is a narrow line between autonomy and anarchy, the difference in their effect on an organization is significant.

Consider the matrix below which differentiates the notion of decision making (What path gets taken to a result and Why that path is taken) from governance (the rules around How and Who should do something).  Autocracy (complete top down decisions and governance) occupies the upper left and the spectrum moves toward Anarchy in the bottom right (bottom-up decisions with little to no alignment to organizational goals and vision, and a complete lack of governance and best practice adherence).  Autonomy (as in an autonomous agile teams) exists in the upper right quadrant of the AKF’s Team Autonomy 2x2 with a high level of innovation because teams share best practices through governance but are free to experiment with paths to achieve desired outcomes.  Freedom in deciding what path to take to a destination or desired outcome is valuable, however it should be balanced with the governance to validate that past lessons learned (be they security related, operationally related, or simply development related) are properly applied. 
AKF Autonomy v Anarchy

Similarly, we can plot the decision making authority for “WHO and HOW” something gets done as compared to the “WHAT (paths) and WHY (a path is taken)”.  In so doing, autonomous agile teams exist in the realm where leadership enforces standards, but the team is the deciding authority for what path to take.  Anarchy (bad) exists when the team makes all decisions as learnings codified within shared standards are not applied.  Warring tribes emerge when leadership defines a path but leaves the decision of who and how to the teams (similar to the “bad leadership” example in the prior matrix).  Autocracy exists when the leadership is responsible for all decisions.  The reason we identify this as “medium” innovation is that we assume the leadership is at least experientially diverse.  But innovation is low relative to autonomous teams because we aren’t tapping the innovation capabilities of the teams themselves - the intellectual capital in which we’ve so heavily invested.
AKF Autonomy v Anarchy Warring tribes


How to Find the Balance of Freedom and Governance
Teams should be built around the suggestions from AKF’s white paper on Organizing Product Teams for Innovation: small, cross functional teams built around a service, who are empowered to be autonomous and work independently on their own.  Autonomy should be defined within the rules of the organization, inform the organization’s architectural principles, and drive adherence through leadership.  This is by no means a notion that the organization should avoid cross functional empowered teams!  As we state in our white paper, Organizing Product Teams for Innovation, “We still have executives developing strategy, functional teams (product management, etc.) defining subservient strategies and roadmaps.  But the primary identities of these folks are embedded within the teams that implement these solutions.”

It is easy to confuse the notion of empowerment and autonomy.  Empowerment is an action of delegation coupled with the assurance of resources and tools to complete the desired outcomes to the delegated party.  It is only through empowerment that autonomy can be achieved within an organizational hierarchy.  Further, it is only through empowerment that autonomous agile teams can be established.  But both empowerment and autonomy need to have rules governing their action or issuance.  Specifically, an agile team is empowered to be autonomous with the following constraints:  following development protocols and standards, adhering to architectural principals, adhering to established best practices regarding test coverage, etc. and ensuring that you achieve the “non-functional requirements” codified within the Agile Definition of Done (more on this later).


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Have your autonomous technology teams been free to make decisions that do not align with the vision of the company?  Are you fearful of switching to Agile because of the rampant anarchy they will exhibit?  AKF Partners has over 200 combined years of experience helping companies ensure that their organizations and architectures are aligned to the outcomes they desire.  We’d love to help you achieve the success you desire.

 

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SaaS Migration Challenges

March 12, 2018  |  Posted By: Dave Swenson

More and more companies are waking up from the 20th century, realizing that their on-premise, packaged, waterfall paradigms no longer play in today’s SaaS, agile world. SaaS (Software as a Service) has taken over, and for good reason. Companies (and investors) long for the higher valuation and increased margins that SaaS’ economies of scale provide. Many of these same companies realize that in order to fully benefit from a SaaS model, they need to release far more frequently, enhancing their products through frequent iterative cycles rather than massive upgrades occurring only 4 times a year. So, they not only perform a ‘lift and shift’ into the cloud, they also move to an Agile PDLC. Customers, tired of incurring on-premise IT costs and risks, are also pushing their software vendors towards SaaS.

But, what many of the companies migrating to SaaS don’t realize is that migrating to SaaS is not just a technology exercise.  Successful SaaS migrations require a ‘reboot’ of the entire company. Certainly, the technology organization will be most affected, but almost every department in a company will need to change. Sales teams need to pitch the product differently, selling a leased service vs. a purchased product, and must learn to address customers’ typical concerns around security. The role of professional services teams in SaaS drastically changes, and in most cases, shrinks. Customer support personnel should have far greater insight into reported problems. Product management in a SaaS world requires small, nimble enhancements vs. massive, ‘big-bang’ upgrades. Your marketing organization will potentially need to target a different type of customer for your initial SaaS releases - leveraging the Technology Adoption Lifecycle to identify early adopters of your product in order to inform a small initial release (Minimum Viable Product).

It is important to recognize the risks that will shift from your customers to you. In an on-premise (“on-prem”) product, your customer carries the burden of capacity planning, security, availability, disaster recovery. SaaS companies sell a service (we like to say an outcome), not just a bundle of software.  That service represents a shift of the risks once held by a customer to the company provisioning the service.  In most cases, understanding and properly addressing these risks are new undertakings for the company in question and not something for which they have the proper mindset or skills to be successful.

This company-wide reboot can certainly be a daunting challenge, but if approached carefully and honestly, addressing key questions up front, communicating, educating, and transparently addressing likely organizational and personnel changes along the way, it is an accomplishment that transforms, even reignites, a company.

This is the first in a series of articles that captures AKF’s observations and first-hand experiences in guiding companies through this process.


Don’t treat this as a simple rewrite of your existing product - answer these questions first…

Any company about to launch into a SaaS migration should first take a long, hard look at their current product, determining what out of the legacy product is not worth carrying forward. Is all of that existing functionality really being used, and still relevant? Prior to any move towards SaaS, the following questions and issues need to be addressed:

Customization or Configuration?
SaaS efficiencies come from many angles, but certainly one of those is having a single codebase for all customers. If your product today is highly customized, where code has been written and is in use for specific customers, you’ve got a tough question to address. Most product variances can likely be handled through configuration, a data-driven mechanism that enables/disables or otherwise shapes functionality for each customer. No customer-specific code from the legacy product should be carried forward unless it is expected to be used by multiple clients. Note that this shift has implications on how a sales force promotes the product (they can no longer promise to build whatever a potential customer wants, but must sell the current, existing functionality) as well as professional services (no customizations means less work for them).

Single/Multi/All-tenancy?
Many customers, even those who accept the improved security posture a cloud-hosted product provides over their own on-premise infrastructure, absolutely freak when they hear that their data will coexist with other customers’ data in a single multi-tenant instance, no matter what access management mechanisms exist. Multi-tenancy is another key to achieving economies of scale that bring greater SaaS efficiencies. Don’t let go of it easily, but if you must, price extra for it.

Who owns the data?
Many products focus only on the transactional set of functionality, leaving the analytics side to their customers. In an on-premise scenario, where the data resides in the customers’ facilities, ownership of the data is clear. Customers are free to slice & dice the data as they please. When that data is hosted, particularly in a multi-tenant scenario where multiple customers’ data lives in the same database, direct customer access presents significant challenges. Beyond the obvious related security issues is the need to keep your customers abreast of the more frequent updates that occur with SaaS product iterations. The decision is whether you replicate customer data into read-only instances, provide bulk export into their own hosted databases, or build analytics into your product?

All of these have costs - ensure you’re passing those on to your customers who need this functionality.

May I Upgrade Now?
Today, do your customers require permission for you to upgrade their installation? You’ll need to change that behavior to realize another SaaS efficiency - supporting of as few versions as possible. Ideally, you’ll typically only support a single version (other than during deployment). If your customers need to ‘bless’ a release before migrating on to it, you’re doing it wrong. Your releases should be small, incremental enhancements, potentially even reaching continuous deployment. Therefore, the changes should be far easier to accept and learn than the prior big-bang, huge upgrades of the past. If absolutely necessary, create a sandbox for customers to access new releases, but be prepared to deal with the potentially unwanted, non-representative feedback from the select few who try it out in that sandbox.

Wait? Who Are We Targeting?
All of the questions above lead to this fundamental issue: Are tomorrow’s SaaS customers the same as today’s? The answer? Not necessarily. First, in order to migrate existing customers on to your bright, shiny new SaaS platform, you’ll need to have functional parity with the legacy product. Reaching that parity will take significant effort and lead to a big-bang approach. Instead, pick a subset or an MVP of existing functionality, and find new customers who will be satisfied with that. Then, after proving out the SaaS architecture and related processes, gradually migrate more and more functionality, and once functional parity is close, move existing customers on to your SaaS platform.

To find those new customers interested in placing their bets on your initial SaaS MVP, you’ll need to shift your current focus on the right side of the Technology Adoption Lifecycle (TALC) to the left - from your current ‘Late Majority’ or ‘Laggards’ to ‘Early Adopters’ or ‘Early Majority’. Ideally, those customers on the left side of the TALC will be slightly more forgiving of the ‘learnings’ you’ll face along the way, as well as prove to be far more valuable partners with you as you further enhance your MVP.

The key is to think out of the existing box your customers are in, to reset your TALC targeting and to consider a new breed of customer, one that doesn’t need all that you’ve built, is willing to be an early adopter, and will be a cooperative partner throughout the process.


Our next article on SaaS migration will touch on organizational approaches, particularly during the build-out of the SaaS product, and the paradigm shifts your product and engineering teams need to embrace in order to be successful.

AKF has led many companies on their journey to SaaS, often getting called in as that journey has been derailed. We’ve seen the many potholes and pitfalls and have learned how to avoid them. Let us help you move your product into the 21st century.  See our SaaS Migration service

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Conway’s Law – The Rest of the Story.. and How To Fix It

December 14, 2017  |  Posted By: Marty Abbott

The Law that Almost Wasn’t

Conway’s law had a rather precarious beginning.  Harvard Business Review rejected Conway’s thesis, buried as it was in the 43d paragraph of a 45-paragraph paper, on the grounds that he had not proven it.

But Mel had a PhD in Mathematics (from Case Western Reserve University – Go Spartans!), and like most PhDs he was accustomed to journal rejections.  Mel resubmitted the paper to Datamation, a well-respected IT journal of the time, and his paper “How Do Committees Invent” was published in 1968.

It wasn’t until 1975, however, that the moniker “Conway’s Law” came to be.  Fred Brooks both coined the term and popularized Conway’s thesis in his first edition of the Mythical Man Month.  It has since been one of the most widely cited, important but nevertheless incorrectly understood and applied notions in the domain of product development.

Cliff’s Notes to “How Do Committees Invent” (the article in which the law resides)

Conway’s thesis, in his words:

… organizations which design systems (in the broad sense used here) are constrained to produce designs which are copies of the communication structures of these organizations.

Conway calls this self-similarity between organizations and designs homomorphism.  Preamble to the thesis helps explain the breadth and depth:

… the very act of organizing a design team means that certain design decisions have already been made, explicitly or otherwise

Every time a delegation is made … the class of design alternatives which can be effectively pursued is also narrowed.

Because the design which occurs first is almost never the best possible, the prevailing system concept may need to change. Therefore, flexibility of organization is important to effective design.

Specifically, each individual must have at most one superior and at most approximately seven subordinates

Examples. A contract research organization had eight people who were to produce a COBOL and an ALGOL compiler. After some initial estimates of difficulty and time, five people were assigned to the COBOL job and three to the ALGOL job. The resulting COBOL compiler ran in five phases, the ALG0L compiler ran in three.

There are 4 very important points, and one very good example, in the quotes above:
    1)   Organizations and design/architecture and intrinsically linked.  The organization affects and constrains the architecture - the opposite is not true.
    2)   Depth of an organization negatively effects design flexibility.  The deeper the hierarchy of an organization, the less flexible (or alternatively more constrained) the resulting architecture.
    3)   We will make mistakes and must organize to quickly fix these.
    4)   Team size should always be small – which also has an implication to the size of the solution part a team can own (think Amazon’s re-branding of this point of the “2 Pizza Team” (author’s side note – read Scalability Rules for how this came about).

Important corollaries to Conway’s law suggest that if either an organization or a design change, without a corresponding change to the other, the product will be at risk. 

Common Failures in Application of Conway’s Law and How to Fix Them

There are five very common failures in organization and architecture within our clients, the first four of which relate directly to Conway’s points above:
    1)   Organizations and architectures designed separately.  Given the homomorphism that Conway describes, you simply CANNOT do this.
    2)   Deep, hierarchical organizations.  Again – this will constrain design. 
    3)   Lack of flexibility.  Companies tend to plan for success.  Instead, assume failure, learning, and adaptation (think “discovery” and “Agile” instead of “requirements” and “Waterfall”).
    4)   Large teams.  Forget about these.  Small teams, each owning a service or services that the team can support in isolation.

There is a fifth violation that is harder to see in Conway’s paper.  Too often, our clients don’t build properly experienced teams around the solutions they deploy.  Success in low-overhead organizations requires that teams be cross functional.  Whatever a team needs to be successful should be within that team.  If you deploy on your own hardware, you should have hardware experience.  If you need DBA talent, the team should have direct access to that talent.  QA folks should be embedded within the team, etc.  Product managers or owners should also be embedded in the team.  This creates our fifth failure:

    5)   Functional teams.  Don’t build teams around “a skill” – build them around the breadth of skills necessary to accomplish the task handed to the team.

Conway’s Parting Shot and Food for Thought
Noodle on this:  Conway identified a problem early in the life of a new domain.  Yet what was true in Conway’s time as a contributor to the art is still true today, over 50 years after his first attempt to forewarn us:

Probably the greatest single common factor behind many poorly designed systems now in existence has been the availability of a design organization in need of work.

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AKF Partners helps companies ensure that their organizations and architectures are aligned to the outcomes they desire.  We help companies develop better, more highly available and more highly scalable products with faster time to market and lower cost.  Give us a call or shoot us an email.  We’d love to help you achieve the success you desire.

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