What corporate IT should learn from Startups: Part 1 – Process

I have spent well over 20 years in corporate IT environments, most of it working for IT shops in the 100-300 person range. In every company that I worked for, IT was seen as a bottleneck and IT struggled to satisfy the needs of the business. In many companies, this is the standard. The reasons for these struggles can be boiled down into the following categories:

1) Process – Too much, too little, or the wrong process for the organization
2) Architecture – No focus on EA (“Wild West”), vendor driven, or Ivory Tower Syndrome
3) Culture – Silos, change resistant, IT thought as a cost center, wrong or unmotivated people
4) Priorities – No portfolio type thinking, decisions made at the wrong level, lack of accountability/justification

In the last 18 months, I have worked in a startup with a  team of 10+ employees advisors, partners, and consultants. Many of the above issues are not a problem in our environment for the following reasons:

1) Process – Teams are small, easy to communicate, everybody depends on everyone else
2) Architecture – We see architecture as both a necessity and a competitive advantage
3) Culture – Survival depends on alignment, agility, and change
4) Priorities – Every penny spent better contribute in some way towards a penny earned

Established organizations can usually survive and sometimes thrive even despite their deficiencies in IT because their core business is bringing in sufficient revenue. For startups, I have seen some great business models fail because of the company’s inability to execute. Startups, especially those in early stages, rarely succeed if they are inefficient. So how can larger, established companies create that entrepreneurial environment that brings the same motivation, accountability, and alignment that comes naturally in startups?

What does success look like?

Often, companies like to create a profile of their most successful employees so they can use this profile as a hiring tool for identifying talent that matches the best people in the company. I recommend that any company who recognizes that it needs to make changes to improve delivery and business/IT alignment create a profile for what a successful startup looks like. Notice I did not say what a successful well established company looks like. The reason is simple. Startups typically deliver frequently, with little capital, with just enough features, and with more modern solutions. Isn’t that what established companies really want at the end of the day?

So why do startups tend to move faster and innovate more?

1) Smaller teams
2) Better communication/alignment
3) Smaller budgets = less features and shorter deadlines
4) Employee incentives (survival) are directly tied to results
5) Everybody matters, everybody contributes
6) Not married to legacy systems, processes, cultures
7) Everybody sees the big picture

So how can leaders in IT create this kind of environment that fits the profile of so many successful startups? Transforming an entire organization can be an ominous task. We have seen many companies fail implementing new technologies because of the inability to change the culture. It takes buy in at the highest levels and great transformational leadership to change a company’s culture and motivation. Maybe the solution is simpler.  Create a “startup” within your organization and ask yourself, “What would a startup do?”

WWSD?
A good startup would build a business plan that shows investors what it will build, how it will generate revenue, how it will keep its burn rate to a minimum, how it will deliver quickly, and why it is better than the competition. Then the startup would build a small team with its limited funds and create extremely aggressive goals and targets that are back loaded with incentives for employees pending on the outcome of their delivery and future funding. Then the team would be empowered to do whatever it takes to meet those deliverables within the limits of the existing funds and resources.  In a startup, it takes a certain mentality for an IT person to survive and thrive in this type of environment.  Make sure that only those types of people are included in this internal startup.  It only takes one corporate attitude to destroy a startup.

To meet the commitments, team members will have to heavily rely on one another. They will also need to innovate to figure out how to balance features, functionality, and quality. Decisions will need to be made quickly and documentation will have to be just enough. In my startup we call this JEJIT - Just Enough, Just In Time. Our requirements and design documents are more visual than textual. You won’t see any 150 page requirements documents because nobody has the time to create it. Instead you will see an iterative process where we get just enough requirements to throw a prototype together. Then we show the prototype to the product owner and iterate through changes until the requirements are good enough for a demo.  The first slide of the following presentation shows how we iterate through each phase.