As good as it gets?

sv // aug 21 2024

There was a movie in the 90s with jack nicholson that was called As Good As it Gets. Notionally it was about midlife trials and tribulations of people who have a lot to be thankful for, but aren't, and need to be reminded of "the sunny side of life" as one reviewer notes.

It makes me think of the industry that exists around "fixing" software companies. There is a orbit of people around this - the "transformation" consulting crowd; private equity; endless authors and academics who document the innovators dilemma, zones to win, 5 dysfunctions; yadda yadda yadda. Copious writing on re-inventing companies in general, and software companies in particular.

This phrase - maybe this is as good as it gets - popped into my head yesterday in a conversation about the "ideal" state for a software team and what that means IN PRACTICE. If your goal is to get a product line or software company back to growth, after a long period of stagnation, then you spend a lot of time discussing this. Plays. Initiatives. Synergy. Investment cases. Value creation.

In the most assertive of cases you start building a masterpiece of corporate operational planning - V2MOM, OKRs, and so forth. Lots of examples here and honestly they all have some merit. But also they all are equally overwrought and the sheer weight of them will starting dragging you under the waves. Lord help you if your company seeks to use SAFe, but that is a post for another day. (for a primer, see Marty Cagan's supremely cranky but supremely excellent take on SAFe)

Many times this "renovation" problem arises in the late stages of a public company, or perhaps in a private equity context. But no matter what business container the product is inside, it's really just about a mature product. How the heck do you take a mature product and reinvigorate it??

Arguably, you can't. You can't turn a 1998 camry into a 2024 Tesla. Years ago in b-school I had the presence of mind to ask my marketing professor what he thought about Crossing the Chasm which was popular at the time. His response I thought was thoughtful - ultimately it's about the product lifecycle.

Here is one of my favorite visuals, which I refer to as "textbook marketing" because it is literally from the textbook we used.

Marketing Management (9th edition). 1997. John Kotler. p. 363

If you are at a company in the first two columns? Good for you. Keep going. There is so much written about this that I'm not even going to bother talking about it.

But if you are in the "maturity" or "decline" stage? What are your options?

Well, you could go back to the beginning - Zone to Win / Innovators Dilemma / 4 steps. This is always possible, maybe even desirable, but also risky and wildly expensive. Both. Lots of risk. Lots of cash.

Does your company have the tolerance for risk? Can you fail many times in a row until you find a way to succeed? Do you have cash? Do you have the tolerance to risk your cash on a bunch of dead ends and new problems?

My guess is no. Hence why VC exists. Most boards, most teams have an allergic reaction to the idea of "agile" and "learning" and "finding fit." Software innovation is not a straight path, and if you haven't lived this already, to a point where you understand the highs and lows, and what it really takes? You won't like it one bit. Nor will your investors and executives and board.

Ok, then what do you do. You have basically one option: make do with what you have. Sweat the asset. As long as you can.

I recognize how pedestrian this sounds. Keep in mind, though, that what is NOT shown in the textbook lifecycle above is how LONG these stages last. Maturity could go on for 15 years. (Go talk to IBM about their AS/400 business if you are unconvinced about this.)

Which leads me back to: "maybe this is as good as it gets." If you are in this situation, maybe you are looking at it wrong.

An alternative view

What I see happen in these kinds of teams:

Trying in vain to model the "ideal" operating model that is used by high growth companies, in the belief that that modeling this idea will result in the same high growth results

That's obviously not going to happen. The phrase "cargo cult" comes to mind.

In fairness I don't think this is a conscious choice. I think it is a lack of ... context. Experience. Perspective. Said simply - a lot of people in this business just don't know any better. They read X.com and listen to podcasts and conclude that they are "doing it wrong." You hear this framed as "we need to do [insert software function] the RIGHT way."

I hear anecdotally that some very successful software investors that I won't name go positively APESHIT when they hear portfolio companies say "we need to do this the RIGHT way" - as if there is some way that is right, other than the way that makes the company more successful.

If you agree that the platonic ideal is not the goal, then what is the goal? We'll never get to anything approaching an IDEAL state (and what is ideal anyway). So what can we do?

Maybe getting to a repeatable system is "as good as it gets."

1. A way to reliably set priorities

2. A way to put those priorities into development.

3. Have some amount of predictability on when your priorities will emerge.

4. Have confidence that when the execution of these priorities emerges (in the form of finished software), that they will be reliably marketable and useful

5. And lastly - when you do discover a problem / opportunity with something that was built, you can push it back to step 1, and start the cycle anew

The best term for this that I've heard is: control surfaces. Do you have the control surfaces that you need to run your business?

Maybe building these control surfaces is ... as good as it gets.