Software eats the organization

Marc Andreesen’s battle cry — software is eating the world — is true at both the macro and the micro level. As organizations become increasingly software- and data-powered, software development practices have escaped from IT to become organization- and process-design principles for the entire enterprise.

This point was driven home for me this week by Steve Blank’s funny and self-deprecating post. “When Hell Froze Over – in the Harvard Business Review“. In his (understated) words:

“The techniques invented in what has become the Lean Startup movement are now more than ever applicable to reinventing the modern corporation.”

This shift from top-down / waterfall business and product planning to the iterative, customer-centric lean / agile approach has unfolded at blistering speed — much faster than most large organizations have been able to cope with.

While thought leaders like Blank (and now HBR) have slowly won converts at the top of the organizational pyramid, line workers have led the first wave of culture change from below — aided by SaaS vendors who have made it easy (and cheap) to adopt lean practices at the departmental level.

When an individual contributor in a big company can improve his or her odds of success by adopting a lightweight SaaS product — whether in CRM, bug tracking, digital marketing or cross-team collaboration — the first cracks appear in the dam.

And when entire departments — and then cross-departmental teams — shift big chunks of organizational workflow to these tools — the dam is fully breached and organizational change must follow.

If it doesn’t — either because management doesn’t get it or IT won’t allow it (two symptoms of the same disease) — these intrapreneurs will start looking for roles in more forward-looking organizations where their efforts are more likely to be rewarded.

This shift from waterfall to lean organization design is most visible at technology-driven companies like Steve Yegge’s controversial (and now redacted) blog post about the company’s then-radical move to a Service Oriented Architecture (SOA) made a much larger point about the cultural change that followed:

Amazon’s org design mirrors its engineering design; it is cellular, autonomous, measurement-driven and accountable down to the team and project level.

This kind of change comes less naturally to organizations where IT is viewed as a necessary evil, a collection of nerds tucked away under the CFO organization and kept out of sight while the real heroes of the business go about their important work. And unfortunately for those organizations, the dawning realization that software is actually the heart of the business will probably come too late.

But for the great mass of organizations — big or small,  for-profit or non-profit — which are neither technology-adept nor technology-averse, the moment to embrace “software” practices like Lean and Agile as core organizational principles is right now. The ideas are free and the tools are cheap, but the ability to build an organization that survives and thrives in a software-powered future is priceless.