Constant Reinvention = Survival

Nothing lasts forever. Even the best-conceived business strategies eventually become constraints on growth.

Consider Dell. “Dell succumbed to complacency in the belief that its business model would always keep it far ahead of the pack.” But the competitors got better while Dell failed “to invest in new business lines, talent, or innovation that could provide another competitive edge.” * [see Business Week citation below]

As a leader in technology or product development, you may think that your entire job is to execute well on the development plans laid out by Marketing or a strategic planning group. But you can do more. You can help the executive staff recognize that the business has other opportunities.

Consider what the Business Week authors went on to say: “Long-term success demands constant reinvention.” This means that while you’re turning out products that meet the current set of goals for functions, price and quality, the viability of the company may depend on your pointing out where innovative products or services could come from, using the brains you already have on your staff. Reinvention means re-thinking the orthodoxies everyone has accepted as the characteristics of the company. Do you have some independent thinkers on your staff who keep coming up with off-the-wall ideas? Maybe some of those ideas are actually your ticket to survival.

“Nurture the next growth platform long before it’s needed.” This means you have to carve out the budget to support the radical ideas from the operating budget you’re supposed to use for mainstream development. If you can’t convince your executive staff to fund a skunkworks operation, then you should look at having some of your key contributors doing some off-the-record investigations. Is this risky in your company? Then maybe the company needs some shaking up.

“Most [companies] don’t [nurture the next ideas]. Distracted by the demands of their current success, they re lulled into a false sense of security.” It’s easy to focus only on the tasks that will satisfy the demands of current customers and current ways of doing business. And while it’s not easy to perform on those tasks at extraordinary levels, you can get lost in gunning for the immediate satisfactions of meeting this quarter’s goals. Can you be a VP or Director of Engineering and still make time for thinking about next year’s products and the businesses that you haven’t entered yet? Consider this: who else is better positioned to view what’s possible, who is out there needing better functions or services, and what can be combined to make a new business?

I suggest taking an advocate’s role as part of your commitment to the long term success of your company. You don’t have to be a marketer or business analyst to know what’s exciting and feasible in the next generation of products and services. Carve out a niche as a visionary and a keeper of the wild ideas that can open up new busineses for your company. Do it regularly, and you’ll be twice as valuable as the person who only meets the usual goals of Development. Besides, it may help your company survive.

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* “Where Dell Went Wrong” by Nanette Byrnes and Peter Burrows in Business Week, February 19, 2007, pages 62-63.

http://www.businessweek.com/magazine/content/07_08/b4022074.htm?chan=search

A + B + C ≠ D (The game changes at the fourth round of financing)

When a startup company reaches a certain size, a number of changes have to occur to allow it to survive. Here are some of them:

1. The founders have to choose new roles for themselves. Having been key idea-people or leaders of a particular part of the business process, they may have trouble envisioning themselves in a role that meshes with a larger company. This is OK — particularly if they are willing to go off and found another company. Where it’s not OK is in a company that desperately needs to establish processes that work for the long term, and a founder is standing in the way of moving in that direction. The impetus to change things may come from the venture investors, from other key executives in the company, or — rarely — from a founder him- or herself. ‘Tis a wise founder who knows his/her own limitations.

2. Product development has to become more predictable. While at this stage of growth a company often is launching multiple development projects at the same time, the need to know when the process will complete becomes more important as the customer base grows and Marketing starts implementing more sophisticated product introductions. In addition, the engineers who have survived the startup environment are often close to burnout, accustomed to an unstructured work environment, and unwilling to consider that in a larger company, risk has to be reduced. What kind of risk? Things like making sure that software backups are made, versions of code are archived, drawings are in fire-safe locations, and that the website is not offering free access to proprietary design information.

3. Knowing how long it will take to implement certain features, whether software or hardware implemented, is key to becoming predictable. Predictablity can be helped by agile development methods, which emphasize frequent demonstrations of working models, making regular estimates of output over the next few weeks and refining one’s ability to predict that output. This gives the developers a lot of say in the process, while also getting realistic “customer” feedback on features and functions on a regular basis.

4. The company management may have to pay attention to issues that aren’t so prominent during the early startup phase, such as infrastructure (development tools, website and equipment maintenance), retention & professional development, trade associations & standards, and intellectual property protection.

5. Scaling up the company is not just a matter of cloning the existing projects and production lines. As a new layer of management is brought in to allow expansion of the operating departments, the top management must examine its way of working, including values, culture, communications, and transparency. Plotting strategy without considering these factors can leave them wondering why the workforce isn’t following management’s lead.