Heed the Standard Disclaimer

April 6, 2003 by
Filed under: Agility, Leadership, Process 

We have all read and heard (and largely ignored) the disclaimer that resides in the fine print at the bottom of mutual fund ads, or is quickly whisked past us at the end of a 30 second radio-spot: “Please remember that past performance is not necessarily an indication of future performance.” Certainly valid for mutual funds these days, it is a disclaimer that is also applicable for software companies.

There is no company that succeeds by remaining the same in the sea of change around us. Geoffrey Moore has identified a progression of very different business models that successful organizations evolve through in their lifetimes, and even as we remain within a single model for some time, our competition is doing their best to pass us in the race for market dominance.

Software companies often fall into the trap of believing the practices that worked for them in the past should continue to work for them in the future, but this is often not the case. Informal communications that worked initially will fail miserably as the team grows, and the cost of the associated mistakes will grow with the team size as well. The innovation that gave you an edge as you entered the market will likely be in the competition’s next release, in addition to their differentiating features. Taking advantage of your staff with long hours and inadequate compensation may appear to provide short-term gains, but is not a solid ongoing policy.

Companies that believed they had the formula for success suddenly find they are losing step with the competition, wondering what went wrong. To succeed and maintain position, you need to be vigilant to adjust your business strategy and tactics to fit your environment. On the surface, this advice may seem to be at odds with the notion that project retrospectives are one of the strongest means of ongoing improvement, where you reinforce practices that worked on your previous projects. If you constantly need to adjust, then why bother identifying what worked?

The key here lies in appreciating the differences from one project to the next, and the evolving nature of the environment that these projects reside in. Reinforce practices that worked only if they continue to make sense in the new environment. Practices that failed previously may now make sense – ponderous documentation may kill a project that needed to be nimble and quick, while the next project may require the pomp and circumstance. Don’t blindly continue with the same practices regardless of the context. Proactively plan for future adjustments, rather than depending solely on retrospectives to reactively identify where you went wrong – retrospectives are good, but nothing beats solid up-front planning.

As Frank Lloyd Wright noted, “Business is like riding a bicycle. Either you keep moving or you fall down.” Don’t rest on your laurels if you wish to get to or remain on top of the heap. – JB

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