Execution is the new innovation

Paradigm change is the next step in evolution

In a world where entrepreneurs have dime-a-dozen ideas and big companies invest in defending their beachheads and launching attacks, those who get it done faster and with high quality will laugh all the way to the bank, with millions of dollars in reward.

In the era of big data, where every company is sitting on many terabytes of data, the incremental improvement of feature-set, operations, and margins relies on translating these data into trends and numbers[1] and then testing alternatives to see if the impact is positive. If positive, then replace the old with new; if not, then continue working on the next idea. Simple, right? 

Well, this means that these days companies should be able to bring the cost of failure down and make testing cheap and fast. For those companies that maintain the belief that innovation is the key to success, they need to have enough leeway in their operation and budget to take bigger risks, as opposed to the small steps[2] of incremental change. No matter how one slices and dices it, the real winners are the companies that can execute effectively. Think Toyota in the 1980s, Dell in the 1990s, and Google in the 2000s.

Imagine a company with global reach that wants to release a new feature/service or improve an existing one. Typically, this involves a product managers, engineering teams consisting of developers, development managers, an architect, QA engineers, program/project managers, business analysts and user experience designers, copy writers, content adapters, translators, linguistic QA, internationalization QA, and regional legal and privacy experts. Then, they may have to work with other teams, such as vendors and third party service providers. In addition, there can be a lot of coordination and negotiation to be done among marketing, regional support, and partners before the release.

Adding to this complexity are the ever-changing technology stacks, new platforms, frameworks, and methodologies that are popping up in waves. Moreover, human factors, distributed teams, and service-oriented architecture contribute to the many horizontal layers that create a “mission impossible” situation with respect to rapid product development at the lowest cost.

 What is the way out? There are three major culprits: product development paradigm, unplanned and ad hoc tools, and complexity vs. complication.[3]

Product development paradigm

The movies and entertainment industry, established the paradigm a long before the technological revolution, making the producers the main driver of their projects and productions. The model subsequently followed by the video gaming industry. Nowadays, the value of product managers is widely recognized and almost everybody acknowledges the place of engineering manager who can “speak the geek” language and lead a bunch of nerdy engineers. The challenge always has been where do program/project managers fit? The answer really depends on the maturity level of the company’s product development and the engineering team.

The lower the maturity level the lower the expectations in terms of planning, dependency management, coordination, progress tracking, 360-degree communication, risk management, and impediment tackling. Program/project managers are only called in when nobody knows how the project progressing, plans are way off, communication is non-existence and product and engineering are not getting along.

 To complicated matter more, add one more dimension—scope—it becomes clear that program and portfolio managers are needed to keep strategic alignments, KPI definitions, quarterly and yearly planning resource allocation, cross-functional coordination, and build relationships.

History repeats itself

In the past, there was often disagreement between engineers and sales and marketing teams about who needs to get the bigger share of the budgetary pie. Engineering teams would claim they built the whole thing and sales and marketing would claim that without their magic no money would come in the first place. Since sales and marketing people were better salespeople, they got their way and got their big bonuses and commissions compared with the flat salaries and marginal bonuses earned by engineering teams.

 These days, technology companies are at the mercy of individuals. Program management is still viewed by some as an overhead expense, nice to have, or a second-rate activity. It is true that some capable product and engineering managers can perform most of the responsibilities mentioned; however, they would create more value by focusing on their areas of expertise, like product and solution simplification, understanding the industry and competition, reducing technical debt, mentoring, and cross-pollinating their wisdom instead of spending time on tasks that require their own champion and leader. In a highly specialized environment, it would be impossible for any product and engineering manager to bring the level of sophistication and focus to the most demanding part of the business: execution. This problem is exasperated by unqualified program managers, a lack of standards, weak on-boarding processes, and uncoordinated companies.

It is time to change our production-focused approach to an execution-focused one. Effective program management entails all the abovementioned responsibilities and keeps product and engineering managers as well as the contributing team members accountable and honest. The biggest cost of any complex program is in managing dependencies. In my estimate, meaningful business value creation costs between 25% and 40% of total cost development cost. Dependency management unravels into planning, coordination and cooperation, risk management, impediment removal, relationship building, and culture development. Therefore, it is not an easy feat; surprisingly, though, many CEOs, VPs, and senior managers do not emphasize its importance. Hence, their organizations do not consider the importance and the problem is propagated all the way to the tactical front, where the cost becomes exponential.

Tools

Ask any dentist, surgeon, oil explorer, or even athlete about the value of the right tool and they will tell you that it is invaluable. Due to the high level of business complexity today, technology companies have discovered the need for better management tools beyond those found in spreadsheet and word processing applications. There are many interesting tools in the market, but what is missing is an integrative tool to help manage business value creation from its inception to its delivery and maintenance. These offerings include Rally, Confluence, Sharepoint, Jira, Github, Jenkins, Altus, Fusion, and dozens of in-house tools.

 As mentioned earlier, almost no self-respecting company these days would make a decision without looking at the data, trends, and qualitative information; meanwhile, execution performance indicators are mostly very general, such as budget tracking and headcounts, or non-existent.

 The need for a toolset to address this gap gained attention around 15 years ago, with the Rationale toolset, which was too expensive and complex. Gradually, ticket management and smaller agile-based tools came about and, in recent years, more extensive solutions like Rally, Collanet, Visual Studio Team System have attracted followers. However, almost all these tools solve only part of the challenges out there.

 Flawless and high-caliber execution cannot occur without a high-caliber and highly integrated toolset.

Don’t deal with complexity by complicating[4]

Complexity is an interesting phenomenon; it is ignored by amateurs and worsened by the professionals. The smaller companies and startups either completely ignore complexity out of inexperience or do not bring it to the equation, citing lack of resources, whereas bigger and established companies deal with complexity by over complicating it through heavy processes, with multiple points for checks and balances.

Conclusion

Execution is hard and flawless execution is more art than science, but it all starts from a paradigm change toward an execution-focused company. Once that happens, putting together the right toolset and managing complexity effectively becomes a much more achievable goal.

[1] Business analytics

[2] In reality, this is why many market leaders lose their edge and eventually market to newcomers and startups. Executional constraints make it difficult to run the business and be innovative.

[3] “Silos are Killing Global Companies” is another article that I will be publishing soon.

[4] “How to Manage Complexity without Getting Complicated,” Yves Morieux and Peter Tollman, Harvard Business Review Press, 2014