GROWTH BLOG: Achieving Team Autonomy not Anarchy
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Scalability and Technology Consulting Advice for SaaS and Technology Companies

Achieving Team Autonomy not Anarchy

June 10, 2019  |  Posted By: James Fritz

Agile teams sometimes struggle with the meaning and value of autonomy within a team.  Is it the autonomy to decide how best 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 determine where autonomy drives value creation and where it destroys value within an enterprise.


Getting Team Autonomy over Anarchy

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-creation of autonomy within a team deals with what path 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 destroy value.  Also, 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 on their effect in an organization is significant.

Consider the matrix below which distinguishes between decision making (What path gets taken to a result and Why that path is taken) and governance (the rules around How and Who should do something).  In an Autocratic organization there is a high amount of Governance controlled via a Top-Down method of Management.  Agile teams here are bounded by how they can accomplish a goal and crippled by what path to take because of the heavy involvement of Management.  Here is where you find organizations that are described derogatorily as Bureaucratic.

On the opposite side of the spectrum, if an Agile shop finds itself unbounded by Governance and capable of making all decisions then you run into the possibility of anarchy.  This type of environment is what allows start-ups to thrive in their early days, but once you have moved beyond a handful of employees, it is necessary to start building governance. 

AKF Autonomous Teams

Where companies with Agile succeed is when Governance is in place and decisions are driven from the bottom.  Ownership and appropriately known boundaries allow Agile teams to deftly maneuver and get after the concept of “Build Small, Fail Fast”.  Lastly, it is important that the lessons learned from all of the Autonomous teams are continually brought up and shared across the multitude of products and teams you have.  It is a waste of time to reinvent the wheel when another team has already solved the problem.


Empowering Teams
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, “We still have executives developing strategy, functional teams (product management, etc.) defining subservient strategies and road maps.  But the primary identities of these folks are embedded within the teams that implement these solutions.”

It is also 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.



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 can help ensure that your organization is aligned to the outcomes it desires.

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The Crippling Cost of Distractions

March 19, 2019  |  Posted By: Pete Ferguson

The Crippling Cost of Distractions

Burst.com photo of woman trying to read a book, type on her computer, and look at her phone at the same time

Perhaps the biggest thief of progress is the misuse of time. Not talking about laziness here – I’m referring to what we often see with our clients – losing focus on what matters most.

Young startups are able to accomplish great things in a very short amount of time because there is rarely anything else to distract them from achieving success and everyone is focused on a shared outcome. Any money they have will likely be quickly exhausted. So food, sleep, vacations, and a life are all put on hold - or at least on the back burner - until products are built, tested, released, and adopted.

As a corporate survivor of 18 years at eBay, I’ve seen a few common themes within my own experience that are also exhibited at other companies where I’ve been involved in the Technical Due Diligence, three day technical architectural workshops, and longer term engagements where I’ve been embedded one of several technical resources. These distractions include:

  • Acquisitions
  • Supporting legacy applications at the cost of new innovation

Acquisitions

Often M&A teams are highly focused on the short term – what can be accomplished this year or this quarter.

I’ve been involved in many due diligence activities as an internal consultant and as a third-party conducting an external technical due diligence. There is a lot of pressure on the M&A team to sell the deal, and in my experience I’ve seen the positives inflated and the negatives – well, negated, to get the deal done.

Often the full impact on the day-to-day operations team is either not considered or underplayed – if not optimistically overvalued as to how much work can get done in a week realistically over time.

Acquisition Distractions Development is Required to Resolve:

  1. Integration of Delivery (How to ship, security requirements, etc.)
  2. Process (Agile vs. Waterfall, what flavor of Agile, etc.)
  3. Product (Sharing of technologies and features)

An older example, but one that has renewed relevance with the recent focus of another activist investor is the story of eBay’s acquisition of Skype in Q4 of 2005. For shared resources within eBay, this was a huge distraction of already overly leveraged operations teams having to take on additional tasks. The distraction from eBay’s core mission was the true tragedy as it lost focus and opened a window for Amazon to grow 600% over the next 7 years (during one of the worst markets since the Great Depression) while eBay struggled to rebound its’ stock price. When eBay reemerged, Amazon had become a market leader in online commerce and has since pulled significantly ahead in many additional markets.

AKF Partners Cost of Distraction for eBay with Skype Purchase

In our technical due diligences and three day architectural workshops, we can see how companies who were once lean and mean become quickly overwhelmed and distracted from innovation by trying to integrate a flood of acquisitions.

At winning companies, we see that M&A teams carefully evaluate:

  1. If acquisition will bring immediate ROI (PayPal immediately impacted eBay’s stock price positively and was able to sustain for several years, where Skype did the opposite)
  2. How much effort integrating the acquisition will require and build enough resources in the acquisition cost to accomplish a speedy induction
  3. How well the two companies’ cultures meld together

From an internal perspective in my time at eBay, the value Skype would bring wasn’t apparent, and externally most analysts were similarly scratching their heads. For Amazon, it was a godsend as it gave them an opportunity to bear down and focus and take a lot of market share from a sleeping and distracted giant.

Supporting Legacy Applications at the Cost of New Innovation

Legacy applications will keep every business from certain opportunities. We have seen multiple times where a company who was once a leader and innovator became too sales-focused and started squeezing out every last ounce of profitability from their legacy products. As a result, a large % of top developers were focused on building out new features into a declining market allowing a window of opportunity for new startups and competition to edge in.

Top of mind examples are Workday’s stealing of market share from SAP before they purchased Success Factors, or Apple’s edging into PC sales as they created a larger ecosystem of phones, tablets, laptops, TV boxes, etc.

Google is one of the best examples of being willing to dump legacy products - even successful ones - if they see support and maintenance as not keeping up with ROI or cutting into areas where they can innovate faster (Froogle, and Google+ and their capping of support of Chromebooks and Pixel phones at 5 years).

Reasons to sunset legacy products in favor of focusing efforts on developing the “next big thing:”

  1. Rising Maintenance and Talent Costs – Cost and scope creep happen suddenly and often are much greater than companies are willing to measure or to admit. One of the more informative questions we always ask is: “if you were to build a new product, what would it look like?” or “if you were to go out to market today, would you develop a new product the same way?” The answers are usually very revealing and conclusive - the legacy products have run their course.
  2. Longer Term Profitability – It takes a bold move to suspend the current cash cow in favor of focusing “all hands on deck” to develop the next big idea and future cash cow. Even when the potential future could be a 3, 4, or 5X revenue generator, companies get short-sighted and are only focused on this quarter’s revenue.
  3. Lost Opportunity Cost – Put aside your current quarterly projections for sales of legacy products, what is your current and potential competition building today that could greatly diminish your company in just a few years?

Conclusions

To compete with young, well-funded and high octane startups, legacy companies need to create a labs environment to attract top developers and free them from daily distractions of supporting legacy software to remain focused on emerging products and markets.

To succeed, teams must be focused on the highest possible ROI.

  • Ensure acquisitions have been properly evaluated for the amount of time and energy it will take to integrate their products and that the cultures of your company and that being acquired are compatible.
  • Supporting legacy applications is important for ongoing profitability, but likely can also be done by teams with less experience and expertise. What is often not factored properly is the opportunity cost of keeping legacy products in play long past their shelf life.
  • Keep your A-teams focused on new product development, not on keeping the lights on. Create a separate Labs organization and treat them like a startup, and free them from legacy decisions on infrastructure, coding languages, etc. Your competition is starting with a fresh slate, you should too.

We’ve helped many startups and Fortune 500 companies make the transition from legacy software and hardware to SaaS and cloud infrastructure to increase scalability while providing high availability. Let us help your organization!

(Photo Credit: Matthew Henry downloaded from Burst.Shopify.com)

 

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Seed, Feed, Weed

December 6, 2018  |  Posted By: James Fritz

USSOCOM Logo
The United States Special Operations Command (SOCOM) has 5 truths that they live by.  All of them have guided SOCOM to be the premier fighting force in the world and they all center around people:

-Humans are more important than hardware

Never prioritize your equipment over people.  Hardware is always easily replaced.  The same is true in technology.  Buying a new server is easy.  Replacing good engineers is not.

-Quality is better than quantity

Anytime you have the choice between one fully capable person and two okay people, always choose quality over quantity.  It gives you the ability to still get the job done and provides more overhead for future hires.

-Special Operations Forces cannot be mass produced

Just like SOCOM, engineers cannot be made in a factory.  Yes there are boot camps that help to fill the void in engineering roles but even those graduates still require time to get up to speed on what it is your organization does.  No two companies are the same.

-Competent Special Operations Forces cannot be created after emergencies occur

If you hire engineers based upon a disaster, they will be ready for tomorrow’s disaster, not today’s.  Always be prepared.

-Most special operations require non-SOF assistance

Engineers can’t work alone.  If QA, Security, Marketing, etc. are not present and supporting, then the work that is produced will not be what is required.
It takes an entire team beyond just engineers to get the job done.

People are what make organizations great, nothing else.  You may be known for a product, but it is your people that developed it and keep it running.

 

Seed, Feed and Weed

AKF has a principle of Seed, Feed and Weed.  Broken down into each component:

AKF Seed, Feed, Weed

Seed
Every day new technology and talent is being produced.  Additionally skilled individuals are always looking for their next challenge, particularly if they currently work in a non-favorable company.  Some companies use entities to find and evaluate new talent to see if they would be a good fit.  Others rely heavily upon their own brand to attract talent.  And still others network throughout the community to make sure they are constantly aware of locally available skill.

Given that every day distance from the workplace matter less and less for employees, using all three can be very integral to staying viable.  If using an outside entity to evaluate new talent isn’t feasible, make sure that you have a solid method in place for determining not only people’s skill, but their fit into your culture.  If you don’t have a strong name to fall back on, make your software the differentiator.  You may not be the biggest mass producer of widgets in the world, but maybe you are the only one who can make them blue.  Gravitate towards that for attracting talent.  And lastly if you can’t network then take some tips from marketing.  Figure out how to get out there and sell yourself and your company.  If you can’t talk excitedly about what you do with someone you meet, then they won’t be excited to work for you.

Feed
There are different facets to Feed.  An important aspect of Feed is feedback.  Continually communicating with your employees about how they are doing (and not just the wrong stuff) gives them a sense of direction for where you think they should be going.  It also lets them know that you pay attention and value their work.  Beyond feedback is also training.  Managers need to be aware of the required training that someone needs to do their job.  If they are managing your databases and have zero database knowledge that is an issue.  But employees need more than just required training.  They need something that stimulates them.  Leaders ensure that employees grow beyond what their role defines them as.  If they want to take Underwater Basket Weaving, well encourage it.  It may not always benefit the company, but if it benefits the employee it usually has a way of having positive returns for everyone.

Weed
Last, and certainly not least, is Weed.  No one likes to be the bad guy.  Firing people is tough - but getting rid of people with bad behaviors or repeatedly poor results is part of our duty as managers and executives.  Have you tried to make them better?  Maybe they were just in the wrong position or didn’t have the right training.  Or worse, they just weren’t a good fit for the company.  If someone has bad behavior it can be very difficult to remedy.  If someone is lacking experience, then it just takes training and mentorship.  9 times out of 10, experience can be fixed.  9 times out of 10 it is just better for everyone to part ways with behavioral issues.

The key to a good workplace is identifying which is most important to you at any given time as sometimes it can shift.  Which of the three to apply more focus on depends on the condition of your team.

People
So why are people so important?  Unless you have already developed Artificial Intelligence they are the ones doing the work.  The Special Operations Community is aware that money can be used to purchase new equipment but the right people take time and nurturing.  The same should be applied for your business.  If availability and scalability are your concerns, money can get you all the rack space or cloud storage you need.  But only time and effort can get you the right people to manage it. 

 

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The AKF Difference

December 4, 2018  |  Posted By: Marty Abbott

akf difference

During the last 12 years, many prospective clients have asked us some variation of the following questions: “What makes you different?”, “Why should we consider hiring you?”, or “How are you differentiated as a firm?”.

The answer has many components.  Sometimes our answers are clear indications that we are NOT the right firm for you.  Here are the reasons you should, or should not, hire AKF Partners:

Operators and Executives – Not Consultants

Most technology consulting firms are largely comprised of employees who have only been consultants or have only run consulting companies.  We’ve been in your shoes as engineers, managers and executives.  We make decisions and provide advice based on practical experience with living with the decisions we’ve made in the past.

Engineers – Not Technicians

Educational institutions haven’t graduated enough engineers to keep up with demand within the United States for at least forty years.  To make up for the delta between supply and demand, technical training services have sprung up throughout the US to teach people technical skills in a handful of weeks or months.  These technicians understand how to put building blocks together, but they are not especially skilled in how to architect highly available, low latency, low cost to develop and operate solutions.

The largest technology consulting companies are built around programs that hire employees with non-technical college degrees.  These companies then teach these employees internally using “boot camps” – creating their own technicians.

Our company is comprised almost entirely of “engineers”; employees with highly technical backgrounds who understand both how and why the “building blocks” work as well as how to put those blocks together.

Product – Not “IT”

Most technology consulting firms are comprised of consultants who have a deep understanding of employee-facing “Information Technology” solutions.  These companies are great at helping you implement packaged software solutions or SaaS solutions such as Enterprise Resource Management systems, Customer Relationship Management Systems and the like.  Put bluntly, these companies help you with solutions that you see as a cost center in your business.  While we’ve helped some partners who refuse to use anyone else with these systems, it’s not our focus and not where we consider ourselves to be differentiated.

Very few firms have experience building complex product (revenue generating) services and platforms online.  Products (not IT) represent nearly all of AKF’s work and most of AKF’s collective experience as engineers, managers and executives within companies.  If you want back-office IT consulting help focused on employee productivity there are likely better firms with which you can work.  If you are building a product, you do not want to hire the firms that specialize in back office IT work.

Business First – Not Technology First

Products only exist to further the needs of customers and through that relationship, further the needs of the business.  We take a business-first approach in all our engagements, seeking to answer the questions of:  Can we help a way to build it faster, better, or cheaper?  Can we find ways to make it respond to customers faster, be more highly available or be more scalable?  We are technology agnostic and believe that of the several “right” solutions for a company, a small handful will emerge displaying comparatively low cost, fast time to market, appropriate availability, scalability, appropriate quality, and low cost of operations.

Cure the Disease – Don’t Just Treat the Symptoms

Most consulting firms will gladly help you with your technology needs but stop short of solving the underlying causes creating your needs:  the skill, focus, processes, or organizational construction of your product team.  The reason for this is obvious, most consulting companies are betting that if the causes aren’t fixed, you will need them back again in the future.

At AKF Partners, we approach things differently.  We believe that we have failed if we haven’t helped you solve the reasons why you called us in the first place.  To that end, we try to find the source of any problem you may have.  Whether that be missing skillsets, the need for additional leadership, organization related work impediments, or processes that stand in the way of your success – we will bring these causes to your attention in a clear and concise manner.  Moreover, we will help you understand how to fix them.  If necessary, we will stay until they are fixed.

We recognize that in taking the above approach, you may not need us back.  Our hope is that you will instead refer us to other clients in the future.

Are We “Right” for You?

That’s a question for you, not for us, to answer.  We don’t employ sales people who help “close deals” or “shape demand”.  We won’t pressure you into making a decision or hound you with multiple calls.  We want to work with clients who “want” us to partner with them – partners with whom we can join forces to create an even better product solution.

 

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The Importance of QA

November 20, 2018  |  Posted By: Robin McGlothin

“Quality in a service or product is not what you put into it.  It’s what the customer gets out of it.”  Peter Drucker


Importance of QA - Team sitting at conference table

The Importance of QA

High levels of quality are essential to achieving company business objectives. Quality can be a competitive advantage and in many cases will be table stakes for success. High quality is not just an added value, it is an essential basic requirement. With high market competition, quality has become the market differentiator for almost all products and services.

There are many methods followed by organizations to achieve and maintain the required level of quality. So, let’s review how world-class product organizations make the most out of their QA roles. But first, let’s define QA. 

According to Wikipedia, quality assurance is “a way of preventing mistakes or defects in products and avoiding problems when delivering solutions or services to customers. But there’s much more to quality assurance.”

There are numerous benefits of having a QA team in place:

  1. Helps increase productivity while decreasing costs (QA HC typically costs less)
  2. Effective for saving costs by detecting and fixing issues and flaws before they reach the client
  3. Shifts focus from detecting issues to issue prevention

Teams and organizations looking to get serious about (or to further improve) their software testing efforts can learn something from looking at how the industry leaders organize their testing and quality assurance activities. It stands to reason that companies such as Google, Microsoft, and Amazon would not be as successful as they are without paying proper attention to the quality of the products they’re releasing into the world.  Taking a look at these software giants reveals that there is no one single recipe for success. Here is how five of the world’s best-known product companies organize their QA and what we can learn from them.

Google: Searching for best practices

Google Search Logo
How does the company responsible for the world’s most widely used search engine organize its testing efforts? It depends on the product. The team responsible for the Google search engine, for example, maintains a large and rigorous testing framework. Since search is Google’s core business, the team wants to make sure that it keeps delivering the highest possible quality, and that it doesn’t screw it up.

To that end, Google employs a four-stage testing process for changes to the search engine, consisting of:

  1. Testing by dedicated, internal testers (Google employees)
  2. Further testing on a crowdtesting platform
  3. “Dogfooding,” which involves having Google employees use the product in their daily work
  4. Beta testing, which involves releasing the product to a small group of Google product end users

Even though this seems like a solid testing process, there is room for improvement, if only because communication between the different stages and the people responsible for them is suboptimal (leading to things being tested either twice over or not at all).

But the teams responsible for Google products that are further away from the company’s core business employ a much less strict QA process. In some cases, the only testing done by the developer responsible for a specific product, with no dedicated testers providing a safety net.

In any case, Google takes testing very seriously. In fact, testers’ and developers’ salaries are equal, something you don’t see very often in the industry.

Facebook: Developer-driven testing

Facebook does not employ any dedicated testers at all. Instead, the social media giant relies on its developers to test their own (as well as one another’s) work. Facebook employs a wide variety of automated testing solutions. The tools that are used range from PHPUnit for back-end unit testing to Jest (a JavaScript test tool developed internally at Facebook) to Watir for end-to-end testing efforts.

Like Google, Facebook uses dogfooding to make sure its software is usable. Furthermore, it is somewhat notorious for shaming developers who mess things up (breaking a build or causing the site to go down by accident, for example) by posting a picture of the culprit wearing a clown nose on an internal Facebook group. No one wants to be seen on the wall-of-shame!

Facebook recognizes that there are significant flaws in its testing process, but rather than going to great lengths to improve, it simply accepts the flaws, since, as they say, “social media is nonessential.” Also, focusing less on testing means that more resources are available to focus on other, more valuable things.

Rather than testing its software through and through, Facebook tends to use “canary” releases and an incremental rollout strategy to test fixes, updates, and new features in production. For example, a new feature might first be made available only to a small percentage of the total number of users.

                            Canary Incremental Rollout
Incremental rollout of features

By tracking the usage of the feature and the feedback received, the company decides either to increase the rollout or to disable the feature, either improving it or discarding it altogether.


Amazon: Deployment comes first

Amazon logo
Like Facebook, Amazon does not have a large QA infrastructure in place. It has even been suggested (at least in the past) that Amazon does not value the QA profession. Its ratio of about one test engineer to every seven developers also suggests that testing is not considered an essential activity at Amazon.

The company itself, though, takes a different view of this. To Amazon, the ratio of testers to developers is an output variable, not an input variable. In other words, as soon as it notices that revenue is decreasing or customers are moving away due to anomalies on the website, Amazon increases its testing efforts.

The feeling at Amazon is that its development and deployment processes are so mature (the company famously deploys software every 11.6 seconds!) that there is no need for elaborate and extensive testing efforts. It is all about making software easy to deploy, and, equally if not more important, easy to roll back in case of a failure.

Spotify: Squads, tribes and chapters

Spotify does employ dedicated testers. They are part of cross-functional teams, each with a specific mission. At Spotify, employees are organized according to what’s become known as the Spotify model, constructed of:

  1. Squads. A squad is basically the Spotify take on a Scrum team, with less focus on practices and more on principles. A Spotify dictum says, “Rules are a good start, but break them when needed.” Some squads might have one or more testers, and others might have no testers at all, depending on the mission.
  2. Tribes are groups of squads that belong together based on their business domain. Any tester that’s part of a squad automatically belongs to the overarching tribe of that squad.
  3. Chapters. Across different squads and tribes, Spotify also uses chapters to group people that have the same skillset, in order to promote learning and sharing experiences. For example, all testers from different squads are grouped together in a testing chapter.
  4. Guilds. Finally, there is the concept of a guild. A guild is a community of members with shared interests. These are a group of people across the organization who want to share knowledge, tools, code and practices.

                            Spotify Team Structure
Graphic showing how team guilds are built with experts on each team

Testing at Spotify is taken very seriously. Just like programming, testing is considered a creative process, and something that cannot be (fully) automated. Contrary to most other companies mentioned, Spotify heavily relies on dedicated testers that explore and evaluate the product, instead of trying to automate as much as possible.  One final fact: In order to minimize the efforts and costs associated with spinning up and maintaining test environments, Spotify does a lot of testing in its production environment.

Microsoft: Engineers and testers are one


Microsoft’s ratio of testers to developers is currently around 2:3, and like Google, Microsoft pays testers and developers equally—except they aren’t called testers; they’re software development engineers in test (or SDETs).

The high ratio of testers to developers at Microsoft is explained by the fact that a very large chunk of the company’s revenue comes from shippable products that are installed on client computers & desktops, rather than websites and online services. Since it’s much harder (or at least much more annoying) to update these products in case of bugs or new features, Microsoft invests a lot of time, effort, and money in making sure that the quality of its products is of a high standard before shipping.

What you can learn from world-class product organizations?  If the culture, views, and processes around testing and QA can vary so greatly at five of the biggest tech companies, then it may be true that there is no one right way of organizing testing efforts. All five have crafted their testing processes, choosing what fits best for them, and all five are highly successful. They must be doing something right, right?

Still, there are a few takeaways that can be derived from the stories above to apply to your testing strategy:

  1. There’s a “testing responsibility spectrum,” ranging from “We have dedicated testers that are primarily responsible for executing tests” to “Everybody is responsible for performing testing activities.” You should choose the one that best fits the skillset of your team.
  2. There is also a “testing importance spectrum,” ranging from “Nothing goes to production untested” to “We put everything in production, and then we test there, if at all.” Where your product and organization belong on this spectrum depends on the risks that will come with failure and how easy it is for you to roll back and fix problems when they emerge.
  3. Test automation has a significant presence in all five companies. The extent to which it is implemented differs, but all five employ tools to optimize their testing efforts. You probably should too.

Bottom line, QA is relevant and critical to the success of your product strategy. If you’d tried to implement a new QA process but failed, we can help.

 

 

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The Domino or Multiplicative Effect of Failure

September 18, 2018  |  Posted By: Pete Ferguson

AKF Partners swim lanes
As part of our Technical Due Diligence and Architectural reviews, we always want to see a company’s system architecture, understand their process, and review their org chart.  Without ever stepping foot at a client we can begin to see the forensic evidence of potential problems.

Like that ugly couch you bought when you were in college and still have in your front room, often inefficiencies in architecture, process, and organization are nostalgic memories that have long since outlived their purpose – and while you have become used to the ugly couch, outsiders look in and recognize it as the eyesore it is immediately and often customers feel the inefficiencies through slow page loads and shopping cart issues.  “That’s how it has always been” is never a good motto when designing systems, processes, and organizations for flexibility, availability, and scalability.

It is always interesting to hear companies talk with the pride of a parent about their unruly kid when they use words like “our architecture/organization is very complex” or “our systems/organization has a lot of interdependent components” – as if either of these things are something special or desirable!  Great architectures are sketched out on a napkin in seconds, not hours.

Great architectures are sketched out on a napkin in seconds, not hours.

All systems fail.  Complex systems fail miserably, and – like Dominos – take down neighboring systems as well resulting in latency, down time, and/or flat out failure.

ARCHITECTURE & SOFTWARE

Some common observations in hardware/software we repeatedly see:

Encrypt Everything

Problem: Overloaded F5 or other similar firewalls are trying to encrypt all data because Personal Identifiable Information (PII) is stored in plain text, usually left over from a business decision made long ago that no one can quite recall and an auditor once said “encrypt everything” to protect it.  Because no one person is responsible for a 30,000 foot view of the architecture, each team happily works in their silo and the decision to encrypt is held up like a trophy without seeing that the F5 is often running hot, causing latency, and is now a bottleneck (resulting in costly requests for more F5s) doing something it has no business doing in the first place.

Solution: Segregate all PII, tokenize it and only encrypt the data that needs to be encrypted, speeding up throughput and better isolating and protecting PII.

AKF Scale Cube - Sensitive Data Segregation

Integration (or Rather Lack Thereof) Of Mergers & Acquisitions

Problem: A recent (and often not so recent) flurry of acquisitions is resulting in cross data center calls in and out of firewalls.  Purchased companies are still in their own data center or public cloud and the entire workflow of a customer request is crisscrossing the country multiple times not only causing latency, but if one thing goes wrong (remember, everything fails …) timeouts result in customer frustration and lost transactions. 

Solution: Integrate services within one isolated stack or swim lane – either hosted or public cloud – to avoid cross data center calls.  Replicate services so that each datacenter or cloud instance has everything it needs.

Monolithic Databases

Problem: As the company grew and gained more market share, the search for bigger and better has resulted in a monolithic database that is slow, requires specialized hardware, specialized support, ongoing expensive software licenses, and maintenance fees.  As a result, during peak times the database slows everyone and everything down.  The temptation is to buy bigger and better hardware and pay higher monthly fees for more bandwidth.

Solution: Break down databases by customer, region, or other Z-Axis splits on the AKF Scale Cube.  This has multiple wins – you can use commodity servers instead of large complex file storage, failure for one database will not affect the others, you can place customer data closest to the customer by region, and adding additional servers does not required a long lead time or request for substantial capital expenditure.

AKF Scale Cube - Swim Lanes


PROCESSES & ORGANIZATION

What sets AKF apart is that we don’t just look at systems, we always want to understand the people and organization supporting the system architecture as well and here there are additional multiplicative effects of failure.  We have considerable expertise working for and with Fortune 100 companies, startups, and agencies in many different competencies.  The common mistakes we see on the organization side of the equation:

Lack of Cross Functional Teams

Problem: Agile Scrum teams do not have all the resources needed within the team to be self sufficient and autonomous.  As a result, teams are waiting on other internal resources for approvals or answers to questions in order to complete a Sprint - or keep these items on the backlog because effort estimation is too high.  This results in decreased time to market, losing what could have been a competitive advantage, and lower revenue.

Solution: Create cross-functional teams so that each Sprint can be completed with necessary access to security, architecture, QA, and other resources.  This doesn’t mean each team needs a dedicated resource from each discipline – one resource can support multiple teams.  The information needed can be greatly augmented by creating guildes where the subject matter expert (SME) can “deputize” multiple people on what is required to meet policy.  Guilds utilize published standards and provide a dedicated channel of communication to the SME greatly simplifying and speeding up the approval process.

Lack of Automation

Problem: It isn’t done enough!  As a result, people are waiting on other people for needed approvals.  Often the excuse is that there isn’t enough time or resources.  In most cases when we do the math, the cost of not automating far outweighs the short-term investment with a continuous long-term payout that automation would bring.  We often see that the individual with the deployment knowledge is insecure and doesn’t want automation as they feel their job is threatened.  This is a very short-sighted approach that requires coaching for them to see how much more valuable they can be to the organization by getting out of the way of stifling progress!

Solution: Automate everything possible from testing, quality assurance, security compliance, code compliance (which means you need a good architectural review board and standards), etc! Automation is the gift that keeps on giving and is part of the “secret sauce” of top companies who are our clients.

Not Empowering Teams to Get Stuff Done!

Problem: Often teams work in a silo, only focused on their own tasks and are quick to blame others for their lack of success.  They have been delegated tasks, but do not have the ability to get stuff done.

Solution: Similar to cross functional teams, each team must also be given the authority to make decisions (hence why you want the right people from a variety of dependencies on the team) and get stuff done.  An empowered team will iterate much faster and likely with a lot more innovation.

CONCLUSION

While each organization will have many variables both enabling and hindering success, the items listed here are common denominators we see time and time again often needing an outside perspective to identify.  Back to the ugly couch analogy, it is often easy to walk into someone else’s house and immediately spot their ugly couch! 

Pay attention to those you have hired away from the competition in their early days and seek their opinions and input as your organization’s old bad habits likely look ridiculous to them.  Of course only do this with an intent to listen and to learn – getting defensive or stubbornly trying to explain why things are the way they are will not only bring a dead end to you learning, but will also abruptly stop any budding trust with your new hire. 

And of course, we are always more than happy to pop the hood and take a look at your organization just as we have been doing for the top banks, Fortune 100, healthcare, and many other organizations.  Put our experience to work for you!

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Effective Incident Communications

September 17, 2018  |  Posted By: Bill Armelin

military communications

Everything fails! This is a mantra that we are always espousing at AKF. At some point, these failures will manifest themselves as an outage. In a SaaS world, restoring service as quickly as possible is critical. It requires having the right people available and being able to communicate with them effectively. A lack of good communications can cause an incident to drag on.

For startups and smaller companies, problems with communications during incidents is less of an issue. Systems tend to be smaller or monolithic. Teams supporting these systems also tend to be small. When something happens, everyone jumps on a call to figure out the problem. As companies grow, the number of people needed to resolve an incident grows. Coordinating communications between a large group of people becomes difficult. Adding to the chaos are executives joining the conference bridges demanding updates about service restoration.

In order to minimize the time to restore a system during an incident, companies need the right people on the call. For large, complex systems, identify the right resources to solve a problem can be difficult. We recommend swarming an issue with everyone that could be needed to resolve an incident, and then release those that are no longer needed. But, with such a large number of people, it can be difficult to coordinate communications, especially on a single conference call bridge.

Managing the communications of a large group of people working an incident is critical to minimizing the restoration time. We recommend a communication method that many of us at AKF learned in the military. It involves using multiple voice and chat channels to coordinate work and the flow of information. Before we get into the details of managing communications, we need to first look at the leadership required to effectively work the incident.

Technical Incident Manager and Incident Communications Manager

Managing a large incident is usually too much for a single individual. She cannot manage coordinating the work occurring to resolve the incident, as well as reporting status to and answering questions from executives eager to know what is going on. We recommend that companies manage incidents with two people. The first person is the individual that is responsible for directing all activities geared towards restoration of service. We call this person the Technical Incident Manager. This individual’s main job is to reduce the mean time to restoration. She needs an overall architectural knowledge of the product and systems to direct the work. She is responsible for leading the call and deescalating after diagnosis informs who needs to be involved. She identifies and diagnoses the service issues and engages the appropriate subject matter experts to assist in restoration.

The second individual is the Incident Communications Manager. He is responsible for supporting the Technical Incident Manager be listening to the technical resolution chatter and summarizing it for a non-technical audience. His focus is on communications speed, quality, and accuracy. He is the primary communications channel for both internal and external messaging. He owns the incident communications process.

Incident Communications Process

This process involves using multiple communication channels to control information and work performed. The first channel established is the Control Channel. This is in the form of a conference bridge and a chat channel. The Technical Incident Manager controls both of these channels. The second channel created is the Status Channel. This also has a voice bridge and a chat channel. The Incident Communication Manager is responsible for managing this channel.

akf effective incident communications

The Control Channel is used for all communication related to the restoration of service. People only use the voice channel for immediate communication and to announce work that is occurring or address immediate questions that need to be answered. Detailed work conducted is placed in the chat channel. This reduces the chatter on the voice channel to command and control messages. It also serves as a record of actions taken that can be referenced in the post mortem/RCA process. If specific teams need to discuss the work they are performing, separate voice and chat breakout channels are created for them. They move off the main channel into their breakout channels to perform the work. The leader of these teams periodically communicates status back up to the control channel.

As the work is progressing, the Incident Communications Manager monitors the Control Channel to provide the basis for his messaging. He formulates updates that he delivers over the Status bridge and chat channel. He keeps executives and customers informed of progress and status, keeping the control channel free of requests for frequent updates and dedicated to restoring service.

akf effective incident communications

This method of communications has worked well in the military for years and has been adopted by many large companies to manage their incident communications. While it is overkill for small companies, it becomes an effective process as companies grow and systems become more complex.

Let us help your organization with incident and crisis management process.

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Expanding Agile Throughout

September 6, 2018  |  Posted By: James Fritz

In our experience we have seen how Agile practices provide organizations within successful companies many benefits which is leading to more and more companies adopting frameworks of Agile outside of software development.  Whether they are looking for reduced risk, higher product quality, or even the capability to “fail fast” and rectify mistakes, Agile provides many benefits, particularly in management.

While effort has been expended to identify how to create Agile product delivery teams (Organizing Product Teams for Innovation) and conversely why they fail (The Top Five Most Common Agile PDLC Failures) – a lot of the focus is on the successes and failures of the delivery teams themselves.  But the delivery is only as good as the group that surrounds that team. 

So how does Agile work beyond your delivery teams?  An essay published in 1970 by Robert K. Greenleaf, The Servant as Leader, is credited with introducing the idea of a Servant-Leader, someone who puts their employees’ needs ahead of their own.  This is counter-intuitive to a normal management style where management has a list of needs that require completion. 

Looking at an Agile team, the concept of waiting for management to drive needs is not conducive to meeting the requirements of the market.  A highly competent Agile team has all the necessary tools and authority to get the job done that is required of them.  If normal management tactics sit over an Agile team, failure is going to occur.

This is where the philosophy of Servant-Leadership comes into play.  If managers, all the way to the C-Suite, understand that they work for their employees, but their employees are accountable to them, then everyone is working towards one goal: the needs of the market.  Management needs to be focused on securing the resources necessary for product delivery teams to meet the demands of the market, whether from a high level of the CEO and CFO for additional funding or further down with ensuring that technical debt and other tasks are assigned out appropriately to meet delivery goals.  This empowerment for teams may seem risky, but the morale improvement and greater innovation that can be achieved far exceeds the level of risk that would be accepted.

Embracing Agile throughout a company is key to the company being able to survive beyond the first couple sprints.  Small changes in management can play a huge role in that.  Asking simple questions like, “what do you need to meet your goals”, or “what factors stand in your way of accomplishment” help to enable employees instead of limiting them.  Asking yourself why you are successful as a company also helps to identify what segment is responsible for your success. 

If the delivery of your services is what customers buy, then identifying ways to enable employees who create those services is vital.  This isn’t to say that other roles in the company aren’t important.  Without support from the entire company, no one particular segment can succeed.  This is why it is so vital for Agile to permeate throughout your entire organization.  If you need assistance in identifying gaps in Agile and figuring out how to employ it, reach out to AKF.

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Migrating from a legacy product to a SaaS service? Don't make these mistakes!!

September 4, 2018  |  Posted By: Dave Swenson

AKF has been kept quite busy over the last decade helping companies move from an on-premise product to a SaaS service - often one of the most difficult transitions a company can face. We have found that the following are the top mistakes made during that migration.

With apologies to David Letterman…


The Top 5 SaaS Migration Mistakes

5. Treat Your SaaS Migration Only as a Marketing Exercise

Wall Street values SaaS companies significantly higher than traditional software companies, typically double the revenue multiples. A key reason for this is the improved margins the economies of scale true SaaS companies gain. If you are primarily addressing your customer’s desires to move their IT infrastructure out of their shop, an ASP model hosted in the cloud is fine. However, if your investors or Wall Street are viewing you as a SaaS company, ASP gross margins will not be accepted. A SaaS company is expected to produce in excess of 80% gross margin, whereas an ASP model typically caps out at around 60 or 70%.

How to Avoid?

Make a decision up front on what you want your gross and operating margins to be. This decision will guide how you sell your product (e.g.: highest margins require no code-level customizations), how you architect your systems (multi-tenancy provides greater economies of scale), and even how you release (you, not your customers, control release timing and frequencies). A note of warning: without SaaS margins, you will likely face pricing pressure from an existing or entrant competitor who has achieved SaaS margins.

4. Tack the word ‘cloud’ on to your existing on-prem product and host it

Often a direct result of the above mistake, this is an ASP (Application Service Provider) model, not a SaaS one. While this exercise might be useful in exploring some hosting aspects, it won’t truly inform you about what your product and organization needs to become in order to successfully migrate to SaaS. It will result in nowhere near the gross and operating margins true SaaS provides, and your Board and Wall Street expect to see. As discussed in The Many Meanings of Cloud, the danger of tacking the word “Cloud” onto your product offering is that your company will start believing you are a “Contender”, and will stop pushing for true SaaS.

How to Avoid?

Again, if an ASP model is ‘good enough’, fine - just don’t label or market yourselves as SaaS. If you start the SaaS journey with an ASP model, make sure all within your company recognize your ASP implementation is a dead-end, a short-term solution, and that the real endpoint is a true SaaS offering.

3. Target Your Existing Customer Base

Many companies are so focused upon their existing customer base that they forget about entire markets that might be better suited for SaaS. The mistaken perception is

“We need to take customers along with us”,

when in fact, the SaaS reality is

“We need to use the Technology Adoption Lifecycle, compete with ourselves and address a different or smaller customer base first”.

How to Avoid?

Ignore your current customers and find early adopters to target, even if your top customers are pushing you to move to SaaS. A move to true SaaS from your on-premise product almost always requires significant architectural changes. Putting your entire product and code base through these changes will take time.

Instead, apply the Crossing the Chasm Bowling Alley strategy to grow your SaaS offering into your current customer base rather than fork-lifting your current solution in an ASP fashion into the cloud…

Carve out key slices of functionality from your product that can provide value in a standalone fashion, and find early adopters to help shake out your new offering. Even if you are in a ‘laggard’ industry (banking, healthcare, education, insurance), you will find early adopters within your targeted customer base. Seek them out; they will likely be far better partners in your SaaS migration than your existing ones.

2. Ignore Risk Shifts

It may come as a surprise to some within your company to find out how much risk your customers bear in order to host and use your product on-premise. These risks include security, availability, capacity, scalability, and disaster recovery. They also include costs such as software licensing that have been passed through to your customers, but are now yours, part of your operating margins.

How to Avoid?

Many of these “-ilities” are likely to be new disciplines that now must be instilled in your company, some by hiring key individuals (e.g.: a CISO), some through additional focus and rigor during your PDLC. Part of the process of rearchitecting for SaaS includes ensuring you have adequate scalability, are designed with availability in mind, and a production topology that enables disaster recovery. Where vertical scalability might be acceptable in your on-prem world (“just buy a bigger machine”), you now need to ensure you have horizontal scalability, ideally in an elastic form. The cost of proprietary software (e.g.: database licenses) is now yours to carry, and a shift to open source software can significantly improve your margins. These “-ilities” are also known as non-functional requirements (NFRs), and need to be considered with at least as much weight as your functional requirements during your backlog planning and prioritization.

And now, the biggest mistake we see made in SaaS migrations…

1. Underestimate Inertia

Inertia is a powerful force. Over the years spent building up your on-premise capabilities, you’ve almost certainly developed tremendous inertia - defined for our purposes as “a tendency to do nothing or remain unchanged”. In order to achieve true SaaS, in order to satisfy your investors and reach SaaS-like multiples, nearly every part of your company needs to act differently.

How to Avoid?

First, ensure your entire company is ready to embrace change. For many companies, the move to SaaS is the only answer to an existential threat that a known (or unknown competitor) presents, one who is listening to your customers say “Get this IT stuff out of my shop!”. Examples of SaaS disruptors include:

  • Salesforce destroying Siebel
  • ServiceNow vs. Remedy
  • Workday taking on Oracle/Peoplesoft

Is there a disruptor waiting to take over your business?

Many companies choose to disrupt themselves, and after switching to SaaS, drive their stock price through the roof. Look at Adobe’s stock price once they fully embraced (or made their customers embrace) SaaS over packaged software.

Regardless of how you position the importance of SaaS to your employees, there will still be some that are stuck by inertia in the on-prem ways. Either relegate them to stay with the on-prem effort, or ‘weed’ them out.

Once you’ve got some built up momentum and desire within your company to make the move to SaaS, make a concerted examination department-by-department to determine how they will need to change. All involved need to recognize the risk shifts as mentioned, and associated required mindsets. While you likely have excellent, seasoned on-prem employees, do you have enough SaaS experience across each team? The SaaS migration should in no way be treated solely as an engineering exercise.

It always comes as a shock how many departments need to break out of their existing inertia, and act differently. Some examples:

Sales:

  • Can no longer promise code customizations.
  • Need to address cloud security concerns.
  • Must ensure existing customers know they can no longer dictate when releases occur.

Finance:

  • Learn to speak ARR (annual recurring revenue).
  • Should look at alternative revenue schemes (seat vs. utility).
  • SaaS presents changes in revenue recognition. Be prepared.

Product:

  • Should focus in iterative releases that enable product discovery.
  • Must learn to balance the NFRs/”-ilities” along with new features.
  • Need to consider alternative customers and markets for your new SaaS offering.

Customer Support:

  • Will likely need to become continually engaged in the PDLC process, in order to stay abreast of releases occurring at far greater frequency than old.
  • Must develop (along with engineering) incident management processes that deal with multiple customers simultaneously having issues.

Security:

  • Better spin up this department in a hurry!

Professional Services:

  • As no code-level customizations should be happening, you might end up reducing this team, focusing them more on integrations with your customers’ IT or 3rd party products.

Engineering:

Hmm, so much change for this department. Where to start? Start by bringing AKF on board to examine your SaaS migration effort. Here is where we can help you the most.

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People Due Diligence

July 12, 2018  |  Posted By: Robin McGlothin

Most companies do a thorough job of financial due diligence when they acquire other companies. But all too often, dealmakers simply miss or underestimate the significance of people issues. The consequences can be severe, from talent loss after a deal’s announcement, to friction or paralysis caused by differences in decision-making styles.

When acquirers do their people homework, they can uncover skills & capability gaps, points of friction, and differences in decision making. They can also make the critical people decisions - who stays, who goes, who runs the various lines of business, what to do with the rank and file at the time the deal is announced or shortly thereafter. Making such decisions within the first 90 days is critical to the success of a deal.

Take for example, Charles Schwab’s 2000 acquisition of US Trust.  Schwab & the nation’s oldest trust company set out to sign up the newly minted millionaires created by a soaring bull market.  But the cultures could not have been farther apart – a discount do-it-yourself stock brokerage style and a full-service provider devoted to pampering multimillionaires can make for a difficult integration.  Six years after the merger, Chuck Schwab came out of retirement to fix the issues related to culture clash. The acquisition reflects a textbook common business problem. The dealmakers simply ignored or underestimated the significance of people and cultural issues.

Another example can be found in the 2002 acquisition of PayPal by eBay.  The fact that many on the PayPal side referred to it as a merger, sets the stage for conflicting cultures.  eBay was often embarrassed by the fact that PayPal invoice emails for a won auction arrived before the eBay end of auction email - PayPal made eBay look bad in this instance and the technology teams were not eager to combine.  As well, PayPal titles were discovered to be one level higher than eBay titles considering the scope of responsibilities.  Combining the technology teams did not go well and was ultimately scrapped in favor of dual teams - not the most efficient organizational model.

People due diligence lays the groundwork for a smooth integration. Done early enough, it also helps acquirers decide whether to embrace or kill a deal and determine the price they are willing to pay.  There’s a certain amount of people due diligence that companies can and must do to reduce the inevitable fallout from the acquisition process and smooth the integration.

Ultimately, the success or failure of any deal has to do with people.  Empowering people and putting them in a position where they will be successful is part of our diligence evaluation at AKF Partners. In our experience with clients, an acquiring company must start with some fundamental question:

1. What is the purpose of the deal?
2. Whose culture will the new organization adopt?
3. Will the two cultures mesh?
4. What organizational structure should be adopted?
5. How will rank-and-file employees react to the deal?

Once those questions are answered, people due diligence can focus on determining how well the target’s current structure and culture will mesh with those of the proposed new company, who should be retained and by what means, and how to manage the reaction of the employee base.

In public, deal-making executives routinely speak of acquisitions as “mergers of equals.” That’s diplomatic, politically correct speak and usually not true. In most deals, there is not only a financial acquirer, there is also a cultural acquirer, who will set the tone for the new organization after the deal is done. Often, they are one and the same, but they don’t have to be.

During our Technology Due Diligence process at AKF Partners, we evaluate the product, technology and support organizations with a focus on culture and think through how the two companies and teams are going to come together.  Who the cultural acquirer is dependes on the fundamental goal of the acquisition. If the objective is to strengthen the existing product lines by gaining customers and achieving economies of scale, then the financial acquirer normally assumes the role of the cultural acquirer.

People due diligence, therefore, will be to verify that the target’s culture is compatible enough with the acquirers to allow for the building of necessary bridges between the two organizations.  Key steps that are often missed in the process:

• Decide how the two companies will operate after the acquisition — combined either as a fully integrated operating company or as autonomous operating companies.
• Determine the new organizational structure and identify areas that will need to be integrated.
• Decide on the new executive leadership team and other key management positions.
• Develop the process for making employment-related decisions.

With regard to the last bullet point, some turnover is to be expected in any company merger. Sometimes shedding employees is even planned. It is important to execute The Weed, Seed & Feed methodology ongoing not just at acquisition time.  Unplanned, significant levels of turnover negatively impact a merger’s success.



AKF Partners brings decades of hands-on executive operational experience, years of primary research, and over a decade of successful consulting experience to the realm of product organization structure, due diligence and technology evaluation.  We can help your company successfully navigate the people due diligence process. 


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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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SaaS Migration Challenges

March 12, 2018  |  Posted By: Dave Swenson

AKF scale cube cloud computing SaaS conversion

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.

SaaS Migration is About More Than Just Technology – It is An Organization Reboot
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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Tuckman’s Stages and Agile Development

November 8, 2017  |  Posted By: Bill Armelin

In 1965, psychologist Bruce Tuckman published his theory of group dynamics. This theory describes the stages (or phases) through which a team progresses enroute to optimal productivity.  While generally useful for any organization, and prescriptive as to what leaders should do when to boost performance, it has profound impacts to Agile development practices and how we build organizations around these Agile practices.

Forming
The first stage is forming. This is where the team first comes together. Here, the individuals are trying to get to know each other. They tend to be polite and cordial, but they do not fully trust each other.

In this stage, the team productivity and team conflict are low. The team spends time agreeing to what the team is supposed to do. This lack of agreement of the team’s purpose can cause members to miss goals because they are individually targeting different things. Team members rely on patterned behavior and look to the team leader for guidance and direction. The team members want to be accepted by the group.  Cautious behavior on the part of the team starts to depress overall team outcomes.  Good leadership, emphasizing goals and outcomes is important to set the stage for future team behaviors and outcomes.

Storming
Once the team’s goals are clear, they move into the next stage, storming. Here, the team starts to develop a plan to achieve the goal and defines what to do and who does it. Friction starts to occur as members propose different ideas. Trust within the team remains low and affective conflict rises as people vie for control. Cliques can form. Productivity drops even lower than in the first stage.

Once the team agrees on the plan and the roles and responsibilities, it can move to the next stage. Without agreement, the team can get stuck. Symptoms include poor coordination, people doing the wrong things and missing deadlines, to name a few.  Good leadership here focuses on fast affective conflict resolution, and serves to help reinforce team goals and outcomes in order to quickly move to more productive phases.

Norming
Once team members agree to the plan and understand their roles, they enter the norming phase. Affective conflict goes down, cognitive (beneficial) conflict and trust increase.  The team focuses on how to get things done and productivity begins to increase. The team develops “norms” about how to work together and collaborate. A lack of these norms can cause issues such as low quality and missed deadlines.

Leadership within the team becomes clear and cliques dissolve. Members begin to identify with one another and the level of trust in their personal relationships contributes to the development of group cohesion. The team begins to experience a sense of group belonging and a feeling of relief from resolving interpersonal conflicts.  Team identity starts to take hold and innovation and creativity within the team increases. The members feel an openness and cohesion on both a personal and task level. They feel good about being part of the team.

Performing
The final stage, preforming, is not achieved by all teams. This stage is marked by an interdependence in personal relations and problem solving within the realm of the team’s tasks. Team members share a common goal, understand the plan to achieve it, know their roles and how to work together.  The team is firing on all cylinders. At this point, the team is highly productive and collaborates well. They are trusting of each other and “have each other’s back.” Healthy conflict is encouraged. There is unity: group identity is complete, group morale is high, and group loyalty is intense.

Not all teams get to this phase. They can get stuck in a previous phase or slide back into them from a higher phase.  Leadership that focuses on affective conflict resolution, team identity creation, a compelling vision and goals to achieve that vision is critical to reaching the Performing phase.  It is usually not easy for teams to quickly progress through these stages, and it often takes 6 months or more for a team to reach the Performing phase. 


Impact to Agile Development
We often see companies make the mistake of coalescing teams around initiatives.  Sometimes called “virtual teams” or “matrixed teams”, these teams suffer the underperforming phases of Tuckman’s curve repeatedly, especially when these initiatives are of durations shorter than 6 months.  But even with durations of a year, six months of that time is spent getting the team to an optimum level of performance.

Tuckman’s analysis indicates that teams should be together for no less than a year (giving a 6 month return on a 6-month investment) and ideally for about 3 years.  The upper limit being informed by the research on group think and its implications to creativity, performance and innovation within teams.  Teams then should become semi-permanent and we should seek to move work to teams rather than form teams around work.  To be successful here, we need multi-disciplinary teams capable of handling all the work they may get assigned.  Further, the team needs to be familiar and “own” the outcomes associated with the solution (or architectural components) with which they work.  More on that in future articles discussing Conway’s Law and Empathy Groups.

AKF Partners helps companies understand and apply the extant theory around organizational development in order to turbo-charge engineering performance.  Wondering if your engineering productivity decreases as you grow your engineering and product teams?  We can help you fix that and get your productivity back to the level it was as a startup!


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What Google Got Right and Wrong with Firing James Damore

August 9, 2017  |  Posted By: Marty Abbott

We have a saying in AKF Partners that “an incident is a terrible thing to waste”.  When things go poorly in a firm, stakeholders (shareholders, partners, employees) pay a price.  Having already paid a price, the firm must maximize the learning opportunity the incident presents.  Google wasted such a learning opportunity by failing to capitalize on an incredible teaching moment with the termination of James Damore (the author of the sometimes called “Anti-Diversity Manifesto”).  While Google seems to have “done the right thing” by firing Damore, it is unclear that they “did it for the right reason”.  The “right reason” here is that diversity is valuable to a company because it increases innovation and in so doing increases the probability of success.  Further, diversity is hard to achieve, takes great effort and can easily be derailed with very little effort.  Companies simply cannot allow employees to work at odds with incredibly valuable diversity initiatives.

Diversity Drives Innovation and Success

My doctoral dissertation journey introduced me to diversity and its beneficial effects on innovation, time to market, and success within technology product firms.  Put simply, teams that are intentionally organized to highlight both inherent (traits with which we are born) and acquired (traits we gain from experience) diversity achieve higher levels of innovation.  Research published in the Harvard Business Review confirms this, indicating that diverse teams out innovate and out-perform other teams.  Diverse teams are more likely to understand the broad base of needs of the market and clients they support.  Companies with very diverse management teams are 35% more likely to have financial returns above the mean for their industry.  Firms with women on their board on average have a higher ROE and net income than those that do not.

Differences in perspective and skills are things we should all strive to have in our teams.  As we point out in The Art of Scalability, these differences increase beneficial cognitive conflict.  Increases in cognitive conflict opens a range of strategic possibilities that in turn engender higher levels of success for the firm.

We have for too long allowed the struggle for diversity to be waged on the battleground of “fairness”.  The problem with “fair” is that what is “fair’ to one person may seem inherently unfair to another.  “Fair” is subjective and “fair” is too often political.  “Success” on the other hand is objective and easily measured.  Let’s move this fight to where it belongs and embrace diversity because it drives innovation and success.  After all, anyone who can’t get behind winning, doesn’t deserve to be on a winning team.


Achieving Diversity is Hard

While the value of diversity is high, the cost to achieve it is also unfortunately high – especially within software teams.  As my colleague Robin McGlothin recently wrote, the percentage of computer science degrees awarded to women over the last 25 years is declining.  Most other minorities are similarly underrepresented in the field relative to their corresponding representation in the US population. 

As in any market with high demand and low supply, companies need to find innovative ways to attract, grow and retain talent.  These activities may include special mentoring programs, training programs, or scholarships at local universities meant to attract the group in question.  These approaches may seem “unfair” to some, but they are in truth capitalism at its best - the application of market forces to solve a supply and demand problem.  When a skill or trait is under high demand and short supply, the cost for that skill goes up.  The extra activities above are nothing more than an increased cost to attract and retain the skills we value. 

Companies desiring to achieve success in innovation through diversity MUST approach it in a steely, single-minded fashion.  Any dissent as it relates to outcomes detracts from the probability of success.  How many people with diverse backgrounds will leave or have left Google because of Damore’s missive?  How many candidates won’t accept offers?  Losing even one great candidate is an unacceptable additional cost given the already high cost to achieve success.

The Bottom Line
Structuring organizations and building cultures that tap the power of inherent and acquired diversity pays huge dividends for firms in terms of innovation, time to market, ROE and net income.  While the rewards are high, the cost to achieve these benefits are also high.  Success requires a steely, single-minded pursuit of diversity excellence. 

The successful company will allow no dissent on this topic, as dissent makes the firm less attractive to the ideal candidate.  Given a constrained supply under high demand, the candidate can and should go to the most welcoming environment available.

Put simply, Google did the right thing in firing Damore.  But they failed to fully capitalize on the unfortunate event.  The right answer, when asked about the reason for firing, would look something like this: “We recognize that diversity in experiences, background, gender and race drives higher levels of innovation and greater levels of success.  Our culture will not tolerate employees who are not aligned with creating stakeholder value.”

Interested in driving innovation and time to market in your product and engineering teams?  AKF Partners helps companies create experientially diverse product teams aligned with business outcomes to help turbo-charge performance and team innovation.

 

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The Dunning-Kruger Effect in Tech

August 1, 2017  |  Posted By: Dave Swenson

We all suffer from various cognitive biases, those mental filters or lenses that alter or warp the reality around us. With the election of 2016, one particular bias has gained widespread attention - the Dunning-Kruger Effect. Defined in wikipedia as:

“...a cognitive bias, wherein persons of low ability suffer from illusory superiority when they mistakenly assess their cognitive ability as greater than it is.”
(If you’ve ever wondered about the behind-the-scenes process of creating Wikipedia content, look at this entertaining discussion.)

In 1999, while a professor at Cornell, David Dunning joined Justin Kruger to co-author a paper titled “Unskilled and Unaware of It: How Difficulties in Recognizing One’s Own Incompetence Lead to Inflated Self-Assessments”, based on studies indicating that people who are incompetent in an area are typically too incompetent to know they are incompetent. Or, simply put, we are often in a position where we don’t know what we don’t know, and therefore cannot judge our level of expertise in a particular area.

This effect or bias, is also known as the ‘Lake Wobegon effect’, or ‘illusory superiority’, and is closely tied to the Peter Principle. Donald Rumsfeld put it this way:

There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns — the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.

And in John Cleese’s words, stupid people do not have the capability to realize how stupid they are.

The story of how Dunning came to posit the D-K Effect is an amusing one. He read about an unusual bank robbery that occurred in Pittsburgh. What was unusual was that the robber, McArthur Wheeler, made absolutely no effort to disguise himself, and in fact, looked and smiled directly into the security cameras. Yet, he was surprised to quickly be arrested, telling authorities “...but I used the juice!”.

The juice?

Wheeler told the police that they couldn’t arrest him based on the security videos, as wearing lemon juice, he was of course invisible. He had been told coating your face with lemon juice makes you invisible to cameras, perhaps similar to using lemon juice for invisible ink. Wheeler had even gone as far as to test the theory by taking a Polaroid picture of himself after coating his face with the lemon juice, and sure enough, his face didn’t appear in the print. The police never were able to explain this, but likely Wheeler was as incompetent at photography as he was at burglary. Clearly, Wheeler was too incompetent at burglary to know he was incompetent.

So, does Dunning-Kruger exist in the technology world? Absolutely…

Just as a typical driver believes their driving skills are Formula 1 worthy, until they’re on a track getting blown past by an inferior car driven by someone who has far better braking and cornering skills, we all tend to underestimate what is possible. We live in our own bubbles and are comparing our abilities only against those who also reside in our bubbles. Therefore, we don’t know what we don’t know - we don’t know there are far better drivers outside our bubbles.

You may think your organization is at the peak of efficiency, until you bring someone in from a Google, Facebook, Amazon, etc. who reveals what the true peak really can be - what fully Agile processes and cultures can do to reduce time to market, how effective SREs and DevOps can be, how to remain innovative, what continuous delivery can do to, etc.

AKF firmly believes in “Experiential Diversity” to cross-pollinate teams, injecting new DNA into a company or bubble that was grown in a different bubble. We see numerous companies with very static personnel, where the average employee tenure is over 15 years. There have been tremendous changes in the technology world in 15 years, and while reading a book or attending a conference on new processes brings some exposure to the latest and greatest, it isn’t enough. It is incredibly important to continually bring new blood into an organization, and to purposely tap into that diversity of processes, technologies, organizational structures that comes with the new blood.

Other techniques to mitigate the effect of D-K in technology, of eliminating our personal and organizational biases include:

  • 360 degree reviews - Dunning himself has said “The road to self-insight runs through other people”. What better way to get feedback than from periodic 360 degree reviews?
  • Code reviews - The likelihood that some percentage of your developers suffer from D-K means that you’re dependent upon code reviews to flush out their incompetence. Just make sure you’re not pairing up two D-K developers to perform the review!
  • Planning Poker - requiring, in true Agile fashion, a team to estimate a task or project reduces the chance of that D-K estimate from torpedoing your development planning.
  • Soliciting advice - the increasing utilization of open source software means there isn’t a vendor, with hopefully solid expertise, to turn to for advice. Instead of solely relying upon your own developer who only knows how to spell say Cassandra, leverage the appropriate OSS community. Just beware that you might not know whether that solicited advice is good advice.
  • Proper interviewing - Ensure your interviewing process can weed out “confident idiots”. Consider planting bogus questions to gauge a candidate’s reactions, like Jimmy Kimmel’s “Lie Witness News”. At a minimum, require team interviewing and consensus for new candidates.

In short, Dunning-Kruger is as rampant within the Technology sector as it is anywhere else, if not even more so. Expect it to be present in your organization, and guard against it. Look at it within yourself as well. Who amongst us hasn’t experienced the shock of discovering we’ve failed a test that we actually thought we’d aced? We all have suffered at one time or another from the Dunning-Kruger effect.

 

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Where have all the Women gone?

July 19, 2017  |  Posted By: Robin McGlothin

We hear every day that more and more jobs are disappearing, yet the technology job sector cannot keep up with the unprecedented demand. So why are women falling behind in this growing career track? 

When we look at the percentage of STEM bachelor’s degrees awarded to female students for the last two decades, based on NSF statistics, we find there are no gender difference in the bio sciences, the social sciences, or mathematics, and not much of a difference in the physical sciences. Great news for women scientists.  The only STEM fields in which men genuinely outnumber women are computer science and engineering.  What?  Why the stagnant numbers in computer science?


At the PhD. level, women have clearly achieved equity in the bio sciences and social sciences, are nearly there (40 percent) in mathematics and the physical sciences, and are “over-represented” in psychology (78 percent). More good news.  Again, the only fields in which men greatly outnumber women are computer science and engineering.  Why no growth?



As I started my research for this blog post, I was pleasantly surprised to find women scientist representation growing in almost all aspects of STEM. And at the same time, disheartened to find my major, computer sciences, is stagnate in growth for women over the past two decades. 

What’s different in the computer science & engineering aspects of STEM that seem to hold women back?  There are many conflicting reports on how our environment and upbringing are sublimely programming women away from engineering and mathematics. We were told from an early age, math and science are for boys.

My mother was a pioneer and a strong female leader.  She holds a PHD in Biochemistry, served as President for Academic Affairs and Provost at Salem International University.  She demanded her daughters rise to any challenge and deliver to the best of our abilities.  Never once did I doubt I had amazing talents and just needed to get busy using them.  So, is it nature or nurture that helped me stay with STEM?  Maybe a little of both.

I saw an article recently in the WSJ on Salesforce.com, where CEO Mark Benioff, is focused on ensuring women are represented fairly at every level in his company. Taking proactive steps like SFDC.com, to open doors for women, rings truer to me then the “poor little girl” theories on how to increase female participation in computer science and engineering. 

The cloud-computing giant is two years into a companywide “women’s surge” in which managers must consider women when filling open positions at every level.  They are also examining salaries for every role in the company to ensure women and men are paid equally.  And finally, ensuring that women make up at least 30% of attendees at management summits or onstage roles at keynote presentations.

With some nurturing at home during early years of development and progress in the corporate landscape leveling the playing field, I believe we are finally set to see an upward trajectory for the last two laggard categories in STEM.
 
Future women engineers can see a world where their hard work and discipline will pay off, a road-map to success if you will.  We no longer need to break through the old stereotypes, running faster and jumping higher to be considered half as good as our male counterparts.  Instead, there will be fair and equal opportunity for career advancement for women engineers and computer scientists. 

I would submit some of the best technology leaders today are women.  My personal experience afforded me the opportunity to work with several top female technology executives.  One of the best leaders I worked for is a power house that broke all the stereotypes, and worked circles around her male counterparts.  As I look back and try to understand what propelled these successful women, they all possess some classic traits that are needed in any leadership role.

Collaboration. Women are skilled collaborators, able to work with all different people. This is an important quality for any professionals, as cross-departmental collaboration is key. Technology impacts every function in modern business, and those most successful will be able to collaborate with all different teams and individuals.

Communication. For many of the same reasons, technologist must also be strong communicators. Communication is an area where many women traditionally excel and it’s an important quality to have. For example, communicating with the sales department may be different from communicating with the IT department. Good technology leaders will be able to speak to everyone.

Perspective. Being able to inspire a team and see the big picture are both equally important. A technology leader must be able to not only collect and analyze data but draw meaningful insights and understand what it means for the company. The ability to holistically view a situation is a competitive differentiation for organizations as well as a positive attribute that many women possess.

In the past, women had to fight a little harder to push through the barriers that have prevented women from entering STEM, but the tide is turning.  In today’s new business paradigm, with a strong technology sector jobs forecast, it’s a perfect time for young women to enter computer science and engineering field. 

And to help drive this point home, President Donald Trump signed two laws that authorize NASA and the National Science Foundation to encourage women and girls to get into STEM fields. The Inspire Act directs NASA to promote STEM fields to women and girls, and encourage women to pursue careers in aerospace. The law gives NASA three months to present two congressional committees with its plans for getting staff—think astronauts, scientists and engineers—in front of girls studying STEM in elementary and secondary schools.  The full name of the law is the Inspiring the Next Space Pioneers, Innovators, Researchers, and Explorers Women Act.  The second law is the Promoting Women in Entrepreneurship Act. It authorizes the National Science Foundation to support entrepreneurial programs aimed at women. 

The stage has been set – go forth future astronauts, scientist, coder girls!  Let’s rock the world. 

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Engineering Metrics

April 3, 2017  |  Posted By: AKF

A topic that often results in great debate is “how to measure engineers?” I’m a pretty data driven guy so I’m a fan of metrics as long as they are 1) measured correctly 2) used properly and 3) not taken in isolation. I’ll touch on these issues with metrics later in the post, let’s first discuss a few possible metrics that you might consider using. Three of my favorite are: velocity, efficiency, and cost.

  • Velocity – This is a measurement that comes from the Agile development methodology. Velocity is the aggregate of story points (or any other unit of estimate that you use e.g. ideal days) that engineers on a team complete in a sprint. As we will discuss later, there is no standard good or bad for this metric and it is not intended to be used to compare one engineer to another. This metric should be used to help the engineer get better at estimating, that’s it. No pushing for more story points or comparing one team to another, just use it as feedback to the engineers and team so they can get more predictable in their work.
  • Efficiency – The amount of time a software developer spends doing development related activities (e.g. coding, designing, discussing with the product manager, etc) divided by their total time available (assume 8 – 10 hours per day) provides the Engineering Efficiency. This is a metric designed to see how much time software developers are actually spending on developing software. This metric often surprises people. Achieving 60% or more is exceptional. We often see dev groups below 40% efficiency. This metric is useful for identifying where else engineers are spending their time. Are there too many company meetings not directly related to getting products out the door? Are you doing too many HR training sessions, etc? This metric is really for the management team to then identify what is eating up the nondevelopment time and get rid of it.
  • Cost – Tech cost as a percentage of revenue is a good cost based metric to see how much you are spending on technology. This is very useful as it can be compared to other tech (SaaS or other webbased companies) and you can watch this metric change over time. Most startups begin with their total tech cost (engineers, hosting, etc) at well over 50% of revenue but this should quickly reduce as revenue grows and the business scales. Yes, scaling a business involves growing it cost effectively. Established companies with revenues in the tens of millions range usually have this percentage below 10%. Very large companies in the hundreds of millions in revenue often drive this down to 57%.

Now that we know about some of the most common metrics, how should they be used? The most common way managers and executives want to use metrics is to compare engineers to each other or compare a team over time. This works for the Efficiency and the Cost metrics, which by the way are primarily measurements of management effectiveness. Managers make most of the cost decisions including staffing, vendor contracts, etc. so they should be on the hook to improve these metrics. In terms of product out the door as measured by story points completed each sprint a.k.a. Velocity, as mentioned above, is to be used to improve estimates, not try to speed up developers. Using this metric incorrectly will just result in bloated estimates, not faster development.

An interesting comparison of developers comes from a 1967 article by Grant and Sackman in which they stated a ratio of 28:1 for the time required by the slowest versus the fastest programmer to complete a task. This has been a widely cited ratio but a paper from 2000 revised this number to 4:1 at the most and more likely 2:1. While a 2x difference in speed is still impressive it doesn’t optimize for the overall quality of the product. An engineer who is very fast and with high quality but doesn’t interact with the product managers isn’t necessarily the overall most effective. My point is that there are many other factors to be considered than just story points per release when comparing engineers.

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PDLC or SDLC

April 3, 2017  |  Posted By: AKF

As a frequent technology writer I often find myself referring to the method or process that teams use to produce software. The two terms that are usually given for this are software development life cycle (SDLC) and product development life cycle (PDLC). The question that I have is are these really interchangeable? I don’t think so and here’s why.

Wikipedia, our collective intelligence, doesn’t have an entry for PDLC, but explains that the product life cycle has to do with the life of a product in the market and involves many professional disciplines. According to this definition the stages include market introduction, growth, mature, and saturation. This really isn’t the PDLC that I’m interested in. Under new product development (NDP) we find a defintion more akin to PDLC that includes the complete process of bringing a new product to market and includes the following steps: idea generation, idea screening, concept development, business analysis, beta testing, technical implementation, commercialization, and pricing.

Under SDLC, Wikipedia doesn’t let us down and explains it as a structure imposed on the development of software products. In the article are references to multiple different models including the classic waterfall as well as agile, RAD, and Scrum and others.

In my mind the PDLC is the overarching process of product development that includes the business units. The SDLC is the specific steps within the PDLC that are completed by the technical organization (product managers included). An image on HBSC’s site that doesn’t seem to have any accompanying explanation depicts this very well graphically.

Another way to explain the way I think of them is to me all professional software projects are products but not all product development includes software development.  See the Venn diagram below. The upfront (bus analysis, competitive analysis, etc) and back end work (infrastructure, support, depreciation, etc) are part of the PDLC and are essential to get the software project created in the SDLC out the door successfully.  There are non-software related products that still require a PDLC to develop.

Do you use them interchangeably?  What do you think the differences are?

Reach out to AKF

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