IT pipeline management, or there and back
On the classification of projects and companies a lot of copies are broken. I have always been interested in the causes of sunsets and sunrises of small IT companies, since there are many examples. And in order to explain some of them, I used the classification based on the high uncertainty of the external environment, as well as the metaphors of the pipeline and scientific research institutes. Perhaps this approach will be curious to you. It is also interesting in him that the situation does not depend on whether the product is development or customized.
It is believed that each company has a certain growth curve. Here we are looking for market fit, here we are scaling, and here is the main profit.
This picture perfectly correlates with the ideas of classical management: here we have an immature organization, and here we have business processes and all that. But in IT, the market situation is changing rapidly, and the fact that yesterday was the giant of the industry and the unicorn is today a bent start-up. Despite the business processes.
For most capitalists, the pipeline seems to be the pinnacle of production efficiency: it’s easy to scale, mechanisms and employees are interchangeable. And having found its market fit, almost all companies start building it.
The pipeline really has many advantages, but it is important not to forget about its main drawback: it can produce only what it was built for.
At the stages of the market fit search, the company is most often managed by the owners. When there is a need for scaling, they build a pipeline and they quickly get bored. There is a need for managers.
Usually they become the usual workers of the IT pipeline: developers, testers, designers. They are offered a little more money and are asked to keep track of their section of the tape.
It is clear that the pipeline can work only in conditions of predictable sales, and in general - low environmental uncertainty (stable labor market, for example). We need even more product - we open a department \ branch, bring a conveyor there, recruit workers. Broke down the worker - replace.
Managers here - Mowgli, children of the conveyor. They can calculate the daily rate of parts on the conveyor, track the number of defects, give a kick to their yesterday's comrade, or repair a broken area of work, dismissing an employee and hiring another. The simplicity of the process does not require them to complex management skills, but only diligence.
But there comes a time when the belt of the IT conveyor is faced with uncertainty. The demand for goods falls, and the tape continues to move. And the owners begin to set tasks for Mowgli managers to develop new products and search for market-fit.
Most often, the owner himself at this moment does not know how to do it: his first conveyor usually turned out by chance. But he reasonably expects that for such a salary his managers should understand this.
However, the conveyor belt does not know how to release new products. Therefore, the manager-Mowgli in a panic shuffles workers at the tape, kicks them more than usual - in general, he uses all the tools he is used to. But as it is easy to guess, this does not lead to a result. The result does not lead to attempts to change the conveyor to another product.
In our metaphor, the other side of the coin is a scientific research institute.
What distinguishes scientific research institutes from the conveyor? First of all: the ability to work in a situation of uncertainty of the external environment. This is not a direct tape with input and output, but an endless loop “hypothesis - experiment - analysis”. Sometimes something worthwhile flies out of this whirlpool.
What product will be in demand by the market? How to analyze? What kind of employees to hire? How to accumulate knowledge? How to keep employees? How to defend before the authorities hypothesis? All these questions are not particularly in demand on the conveyor, but vital for managers in research institutes.
The manager at the scientific research institute finds classroom employees, slips questions, ideas and thoughts to them, and then does not interfere. His role is to abandon the laurels of creativity and the ambition of leadership in favor of helping to organize the work of its employees. He writes reports, justifies budgets, and seeks to ensure that the whirlpool of testing hypotheses does not turn into work for the sake of work.
Most of the startups at the beginning of their journey are compelled to be such a research institute on steroids: they are all the same, but there is absolutely no time and money.
Often an employee who is useful on a conveyor belt is completely useless at first at a research institute. Just because of the fact that the research institutes have less formal structures and it is not clear what to do. It is even more difficult for the manager to reorganize: to give up power and privileges in favor of servant leadership is a difficult test.
Usually at this stage the company is in a fever: the goods from the conveyor are no longer needed, and the development cycle started too late and does not give the owners a sense of stability. A keen desire to cut costs alternates with overestimated expectations from “loyal managers,” and emotional ups and downs.
Yesterday's owners of serious business at this moment are ordinary nervous startups. It ends with either a successful transformation or a failure. But the failure of the transformation does not always mean the failure of the business: sometimes the market requires only a little change of the conveyor and starts to consume products again.
It is right for a company not to close the internal scientific research institute at the scaling stage. If closed, it is better to reopen.
This direction will always seem like a waste of money: it earns nothing compared to the pipeline, creates a lot of mess, and the cost per unit of production exceeds all reasonable limits. But there may appear people who will provide competitive advantages and build a new pipeline if necessary.
Formation of maturity and the appearance of the conveyor
It is believed that each company has a certain growth curve. Here we are looking for market fit, here we are scaling, and here is the main profit.
This picture perfectly correlates with the ideas of classical management: here we have an immature organization, and here we have business processes and all that. But in IT, the market situation is changing rapidly, and the fact that yesterday was the giant of the industry and the unicorn is today a bent start-up. Despite the business processes.
For most capitalists, the pipeline seems to be the pinnacle of production efficiency: it’s easy to scale, mechanisms and employees are interchangeable. And having found its market fit, almost all companies start building it.
The pipeline really has many advantages, but it is important not to forget about its main drawback: it can produce only what it was built for.
Conveyor and management
At the stages of the market fit search, the company is most often managed by the owners. When there is a need for scaling, they build a pipeline and they quickly get bored. There is a need for managers.
Usually they become the usual workers of the IT pipeline: developers, testers, designers. They are offered a little more money and are asked to keep track of their section of the tape.
It is clear that the pipeline can work only in conditions of predictable sales, and in general - low environmental uncertainty (stable labor market, for example). We need even more product - we open a department \ branch, bring a conveyor there, recruit workers. Broke down the worker - replace.
Managers here - Mowgli, children of the conveyor. They can calculate the daily rate of parts on the conveyor, track the number of defects, give a kick to their yesterday's comrade, or repair a broken area of work, dismissing an employee and hiring another. The simplicity of the process does not require them to complex management skills, but only diligence.
Uncertainty and management
But there comes a time when the belt of the IT conveyor is faced with uncertainty. The demand for goods falls, and the tape continues to move. And the owners begin to set tasks for Mowgli managers to develop new products and search for market-fit.
Most often, the owner himself at this moment does not know how to do it: his first conveyor usually turned out by chance. But he reasonably expects that for such a salary his managers should understand this.
However, the conveyor belt does not know how to release new products. Therefore, the manager-Mowgli in a panic shuffles workers at the tape, kicks them more than usual - in general, he uses all the tools he is used to. But as it is easy to guess, this does not lead to a result. The result does not lead to attempts to change the conveyor to another product.
In our metaphor, the other side of the coin is a scientific research institute.
SRI as a way of working with uncertainty
What distinguishes scientific research institutes from the conveyor? First of all: the ability to work in a situation of uncertainty of the external environment. This is not a direct tape with input and output, but an endless loop “hypothesis - experiment - analysis”. Sometimes something worthwhile flies out of this whirlpool.
What product will be in demand by the market? How to analyze? What kind of employees to hire? How to accumulate knowledge? How to keep employees? How to defend before the authorities hypothesis? All these questions are not particularly in demand on the conveyor, but vital for managers in research institutes.
The manager at the scientific research institute finds classroom employees, slips questions, ideas and thoughts to them, and then does not interfere. His role is to abandon the laurels of creativity and the ambition of leadership in favor of helping to organize the work of its employees. He writes reports, justifies budgets, and seeks to ensure that the whirlpool of testing hypotheses does not turn into work for the sake of work.
Most of the startups at the beginning of their journey are compelled to be such a research institute on steroids: they are all the same, but there is absolutely no time and money.
Transformation from conveyor to research institutes
Often an employee who is useful on a conveyor belt is completely useless at first at a research institute. Just because of the fact that the research institutes have less formal structures and it is not clear what to do. It is even more difficult for the manager to reorganize: to give up power and privileges in favor of servant leadership is a difficult test.
Usually at this stage the company is in a fever: the goods from the conveyor are no longer needed, and the development cycle started too late and does not give the owners a sense of stability. A keen desire to cut costs alternates with overestimated expectations from “loyal managers,” and emotional ups and downs.
Yesterday's owners of serious business at this moment are ordinary nervous startups. It ends with either a successful transformation or a failure. But the failure of the transformation does not always mean the failure of the business: sometimes the market requires only a little change of the conveyor and starts to consume products again.
findings
It is right for a company not to close the internal scientific research institute at the scaling stage. If closed, it is better to reopen.
This direction will always seem like a waste of money: it earns nothing compared to the pipeline, creates a lot of mess, and the cost per unit of production exceeds all reasonable limits. But there may appear people who will provide competitive advantages and build a new pipeline if necessary.