Creating the ‘lean corporation’ and avoiding startup mistakes

• Enterprises need to learn to become ‘lean corporations,’ says Pivotal exec
• But they also need to avoid the wrong ‘Silicon Valley’ style startup methods

 
SOFTWARE is eating the world, Internet pioneer and entrepreneur Marc Andreessen famously said back in 2011. In some ways it really is, and others have also said that today, every business is a software business.
 
Andreessen’s audacious statement has become a truism, according to Pivotal Labs vice president Drew McManus (pic above), speaking to Digital News Asia (DNA) in Singapore recently.
 
“If you are a CEO (chief executive officer) of a bank and you wake up one day and realise you have 4,000 software developers working for you, software has become a core part of your business – it has virtually become a core part of every business out there,” he says.
 
This is true across all sectors, as software has become the default way for people to interact, he adds.
 
Some businesses are responding to this new reality by establishing ‘innovation centres’ within their organisations, but this is only creating a silo around the issue.
 
McManus believes that innovation has to be present throughout the organisation. “From the way you do recruiting to procurement and budgeting, IT management has to change,” he says.
 
“One of the key challenges for CEOs and CIOs (chief information officers) is ensuring the entire organisation can support innovation,” he adds.
 
The ‘lean corporation’ way
 
Many organisations look to Silicon Valley for ideas on innovation, but McManus cautions against doing this blindly.
 
“It’s more of a state of mind – it is a set of values and behaviour, a set of processes you can apply to any company dealing with technology,” he says.
 
Startups have the saying ‘fail fast,’ but corporations have a harder time accepting it, especially since it can be easily misinterpreted, according to McManus.
 
“Nobody sets out to fail, but what we are seeing is more and more enterprise adopting lean approaches,” he says.
 
“Those principles that originate from [Eric Ries’] The Lean Startup book, apply more and more toward enterprises as well.
 
“The whole notion of building small feature sets or a minimum viable product that allows startups to learn and apply the learning as they build a product, applies just as well to an enterprise,” he adds.
 
This build-measure-learn cycle is compatible with the agile methodology, where requirements and solutions evolve through collaboration between self-organising cross-functional teams.
 
“Constantly iterating and continuously delivering software to clients, incorporating real-time learning into the prioritisation and feature roadmap, is part of the process and can be part of the product very quickly,” says McManus.
 
Corporations often see ideas only leave the production floor after months and months of planning, which misses out on the whole idea of agility.
 
“There is such a thing as over-planning – the extreme example is the waterfall process, where you define the entire product and you spend 18 months to two years building it … or it never even sees the light of day,” says McManus, referring to the traditional sequential software development process.

“The reason to adopt agile is you are able to deliver small and incremental bits of functionality in a tight feedback loop.
 
“It’s insurance against building things you don’t need and making investments you don’t need to make – it’s a way to ensure that every bit of productivity that comes out of your software team has ultimate business value,” he adds.
 
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