Agility is key to software-driven businesses
By Stefani Mans
Software – driven
In todays world most businesses are software driven or in the process of a digital transformation. Software is transforming the way business is done. This transformation brings new challenges in regards to the structuring and management of organisations. Software’s switch towards continues delivery has enabled us to create a continues conversation with the marketplace and as a result decisions and direction shifts can be made within a much shorter time span than before. Internal organisations need to evolve in line with these developments in order to support rapid iterative business optimisation. When it comes to fast paced business optimisation agility is key. Holding on to old fashioned ways can prohibit execution teams from reaching their full potential.
Most organisations pride themselves on practicing agile, but in reality is this agility can only be subscribed to their product development teams. However, to support software-driven businesses, agility needs to take root in infrastructural disciplines like HR and finance.
New hiring practices
Most HR organisations evolve around job requisition. Recruiters are urged to fill positions quickly and pass on a selection of candidates, that posses a certain skill set, to hiring managers. These hiring managers are then pressured to make a quick decision so HR can reach their quota on time.
This is not the right style of hiring to build organisational agility. Instead of rushing a selection proces of candidates who tick off all the boxes, HR should be looking to hire people that are creative, curious, collaborative and have an entrepreneurial mindset. These hidden gems don’t easily fit into a box but posses a diverse set of skills that is not necessarily related to their educational background. In order to attract these candidates the implementation of new hiring practices is vital. New hiring practices should enable organisations to acces if a new candidate is one of those hidden gems that can really push the company forwards.
An additional challenge is to incentivise and retain this new talent. Companies that want to attract innovators with an entrepreneurial spirit will need to rethink their compensation structure because these kind of employees are not mainly motivated by financial gain. If you want to attract and retain this kind of talent you should offer them the possibility to create something for themselves that holds meaning.
Project funding also needs to adapt to the changing business environment. CFO’s always want to know if an initiative is going to be worth funding before committing long term. Unfortunately they can’t dip their toes in the water before jumping in, because results can not be predicted upfront. A product roadmap should not be longer than six weeks because shifting customer behaviour, market disturbances and unforeseeable complexity levels wil increase the risk of it becoming outdated. To make sure the money is invested in the right places, CFO’s should task each team with solving a clear, calculable business problem by which the team’s success, and by extension their re-funding, will be evaluated. This evaluation wil take place at the end of each funding period. This will enable organisations to make better informed decisions based on real-time, market-based insights and allows them to re-evaluate their commitment to an initiative after a shorter period of time.
Decisions making structures
The existing decision making structures are very hierarchical, slow down the decision making proces, and need to be changed. For organisational agility, there should be as little time as possible between customer feedback and decision making. This is the only way organisations can actually benefit from real-time market-based insights. Currently a decision is run past an excessive amount of people to make sure everyone is on board before any further steps are taken. In case a mistake was made by someone this process should provide some damage controle. Time spend anticipating on- and trying to limit the risk of a possible mistake could far better be spend learning from those mistakes by quickly analysing them and use the new insights they provide to develop new strategies. Within software development culture, outcome measurement, learning and evidence-based decision making is allowed and encouraged. However the product development teams need organisational support in order to benefit from this.
The development team is required to keep the organisation informed about the proces and the progress they are making. Because the team members feel that there is no room to make mistakes and learn from them, they are less likely to think outside the box, be creative and try new things. They wil rather try to keep things predictable and safe, which will only undermine their agility. Managers should leave the daily tactical discussions to the development teams and concern themselves with the progression the team is making towards the strategic business goals.
Agility is key
Independent of the products or services that they provide, companies are becoming increasingly more software driven. This development requires a different management style. Real-time data analytics enable development teams to make better informed decisions based on real-time market-based insights and customer feedback. However it is vital that the development team is given the freedom to measure outcomes, make mistakes and learn from them. It is also important that traditional and outdated decision making structures do not prohibit them to act swiftly on new information and insights. To support rapid iterative business optimisation it is key that the funding- and decision making structures exhibit the same agility as the development teams.
For companies it becomes increasingly harder to find and retain the collaborative innovators that are needed to built organisational agility. The Dutch IT talent pool is dried up due to a huge shortage in skilled IT professionals. Esti developers, IT recruitment Amsterdam, contributes to the solution by recruiting international IT talent and helping companies find the skilled professionals that can really add value to their organisation and push their company culture to a higher level.