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Can your organization sustain a new product

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I’ve been in the product game for more than 10 years now and participated directly or indirectly in the creation of multiple software products, some small, internal products, with a user base of 10 people and very clear requirements or products used by hundreds of thousands which went to all the painful stages of market research, MVP and so on.

The organizations that started those products were rarely in the software business, some were manufacturers, shipping companies, education technology, travel agencies, pharma, and so on.

One thing all the organizations I worked with had in common was they strongly believed that if you put the right people on the project, then it will be a tremendous success. And that’s actually not true.

Of course, as a manager, you would never, consciously, put a person in charge of a project knowing that the person is not capable of finishing that task successfully.

We need to look at the organizations in the same way, does your organization have the necessary ability, motivation, resources, and capabilities to sustain the project? As people, organizations have capabilities and disabilities, and we need to understand first if they can be successful in an initiative.

Just to clarify, I am not talking about whether what they want to create is feasible, viable, and desirable in the market. For the sake of the argument, I would assume it is. The article will refer more to their ability to execute a project, being a software product or whatever else.

What contributes to the success of a project in an organization

There are basically 3 things that will tell you what your company can and cannot do. 

First, we have resources like people, money, infrastructure, information, partners and in general, everything that is tangible and can be hired or fired, sold, bought, built, and depreciated.

Resources tell you what you have on hand in order to get the job done.

The second group of factors are processes that define how those resources work together. Sometimes you know them, and they are written somewhere, sometimes they are just in the background as part of your organizational culture.

In the early days of a company, there are no real processes since you never really did things over and over again to create a process so it’s more likely that in the early days most of the capabilities rely on its resources (people. IP, equipment, product, etc). When a company begins to succeed and mature there is usually a shift from resources to processes.

Some processes are standard or almost standard like agile in software development but some of the most important processes, that can actually make a difference are lying somewhere in the administrative part like how budgets are set, how decisions are done, or how managers are held accountable for delivering the numbers. Some others are on the human resources side and determine how and if we train our people when we hire and what kind of people we are hiring.

If you look at a company that developed successful software which is on the market and makes money, the main question is not how they developed it, but do they have the necessary processes to be able to deliver in the future other, better systems? If not, it was pure luck and hard work.

In order to figure out what an organization can and cannot do we need to understand the processes that an organization follows when they make decisions Should we fund this or that, how would we sell a product, who will sell it, how will we price it?

The problem usually occurs when a process is asked to do a thing it was not meant to do. Imagine that you have a process that calculates the ROI of a building but now you need to use it in order to get the ROI of software or the process used to price a hotel room per night but now it needs to be used to price a software.

In order to understand what a company can and cannot do you need to be able to understand very complex processes and their underlying motives.

In conclusion, until now resources define things that are at your disposal to get things done, and processes define how the resources are put together and therefore the organization’s ability to get an outcome.

The last item that shows you what a company can and cannot do is how the company is making money. In a nutshell, this shows you how a company will prioritize its tasks and the criteria used in making the choice.

Imagine a manager who wakes up in the morning and needs to take a decision, should I fund this or that? He will make the choice based on some criteria, for him, most probably the budget that he needs to cover or the gross margin that he will be held accountable for. But that’s just an example, same applies to a salesperson who needs to call a customer or a developer who needs to solve a bug or work on a new feature.

There is no real place you can put a finger on in a company in order to determine its profit formula, rather this is a very diffused and complicated set of decisions. In bigger companies, this becomes even more complicated, and it becomes more important for the senior managers to be able to articulate clearly what criteria the people should use.

But if one-day things change, and people need to prioritize something else over the criteria used for several years it becomes an almost impossible task. That’s why the profit formula shows more of what an organization cannot do.

 Can you do it?

 So, in order for an organization to succeed we need to ask ourselves do we have the right resources to do the job, do we have the processes that can create the needed value, and do we have a profit formula that can allow us to prioritize things accordingly.

Works cited: Christensen, C. M., Raynor, M. E. (2003). The Innovator’s Solution. Boston: Harvard Business School Publishing Corporation.