Why should software executives have all the fun? By now, you may have heard many business thought leaders either talk about markets being disrupted by software-driven startups or companies that are learning to think and act like software companies. From Marc Andreessen’soriginal 2011 proclamation that “software is eating the world,” to a recent interview with Don Butler of Ford, who spoke of the auto manufacturer’s evolution to the software space, to GE’s well-documented metamorphosis from heavy-duty manufacturer to digital services provider.
“The current business environment requires all leaders to view their companies as software businesses — and think like software executives,” writes Vijay Gurbaxani in the latest issue of Harvard Business Review.
There’s no disputing that every business these days, no matter what business it may be in, is becoming a software business. The maker of stereo speakers now loads code into its products, and downloads regular updates to add new features. Cars now have more code running their systems than jet aircraft.
The following are ways to think like a software executive, to adapt to this new world:
Stop sweating disruption and start being the disruption. Dr. Vishal Sikka, CEO of Infosys, feels that too many companies are using disruption in their industries as an excuse for their lackluster performance. In a recent chat I had with Sikka, he observes that the disruption wave, rather than getting organizations to move in new directions, actually “absolves management of its responsibility to stay up with what’s going on. They did not have the ability to train their people to ride the next wave. Long-lived enterprises such as GE are embracing digital, and are ahead of the others. management needs to be awake and aware of what’s going on.”
Focus on continuous delivery and continuous improvement. Software has low barriers to entry, with the opportunity for new upstarts to jump in at any time. Barriers are even lower with the rise of cloud services. It’s important to always stay a step ahead. Always be testing and experimenting with new approaches and new technology.
Rethink the role of IT. This may seem counter-intuitive for thinking like a software executive, but it gets you to where you need to go, according to Derek Roos, CEO of Mendix. “The key to more quickly bringing innovative ideas to market isn’t simply a bigger IT department. The point is to make software-thinking a defining characteristic of your entire business, not just a separate department. Every employee in your company should be empowered to think—and act—like they work in an innovative startup.”
Think in terms of platform, not just applications. Platforms open up organizations to audiences and opportunities that never existed before. ”Software platforms have incredibly attractive economics,” says Gurbaxani. “They support profitable growth: a business can deliver margins that increase with scale as it adds each new user to the platform at modest incremental cost.”
Encourage partnerships. Digital technologies make it easy to integrate partners into various parts of operations, says Gurbaxani. One business can’t go it alone, it takes an ecosystem of partners to deliver value.
The transformation to the software business means a new way of thinking for many executives. Ultimately, it encourages an optimistic view of the world, that innovation can be readily delivered and customer needs quickly met.