No matter what kind of company you have, at some point, its growth is likely to outstrip your technology. Here are the three things that determine how you can scale your technology.
It’s easy for the CEO of a rapidly growing tech company to be intoxicated by a stiff cocktail of enthusiastic customer feedback, rabid competition, and seemingly endless opportunity. The typical result is an eager-beaver, well-meaning back-and-forth of “yes” by sales and “do” by the product team.
This non-process eventually creates what I call The Tech Scalability Problem. Soon, your prospective customers are less impressed by what you have to offer. Your existing customers are complaining. Your efficiency is going down, the competition is pouncing on your shortcomings, and neither hard work nor duct tape will fix things.
At this point, the CEO usually dives in. The tech team generally responds with some variation of: “We can absolutely do the things you’re asking for, but we need to make major changes to the underlying technology. We don’t recommend outsourcing this critical initiative, so it won’t be cheap. Here’s the budget. We need to get started right away.”
The amount of grief resulting from this scenario depends on three things: the “flavor” of the CEO, the type of tech team leader you’ve got, and the organizational crutches you have at your disposal.
What “flavor” is the CEO?
Every CEO has a natural area of interest, or flavor. Emotionally and mentally, CEOs gravitate towards their flavors and know them well. For example, many founder/CEOs are sales- or product-flavored. They create a brilliant solution to a problem and tirelessly evangelize to a familiar customer base. They can learn other parts of the business but those are not their natural and first loves.
The flavor of the CEO is important because of its implications for those areas of the business where the CEO does not have a natural affinity. There, the CEO needs a leaders whom they trust not just as domain experts, but on a business level. These are the leaders who can look the CEO in the eye and say, “I know you don’t totally get this, but I understand what you want, and here’s my guidance.” The CEO trusts that person’s assessment implicitly when making hard decisions.
The tech leader
The challenge in rapidly growing companies is that the tech leader is usually the most experienced technologist and domain expert, but is not a business leader. This means the CEO won’t know how to weigh the tech group’s input in his or her decision-making. “Is the $500,000 investment more important than the extra sales guy, new marketing spend, and additional customer support?”
This results in fuzzier-than-necessary decision-making. The CEO knows the technology is a problem, but how big it is, how to solve it, how to prioritize it, what impact it will have on the rest of the business--those answers are not clear. Without a business leader of the tech team, the CEO must find other guidance to help make hard technology decisions.
Using a crutch
Just as crutches help people walk when they’re hurt, CEOs need crutches to help get through extra tough times. When confronted with The Tech Scalability Problem, CEOs have two crutches.
The first crutch is internal: the product management team. Even if you have a business-oriented technology leader, project management should be the co-pilot of any technology overhaul. Without a business technology leader, project management becomes the most critical internal voice on The Tech Scalability Problem.
The “why”--not just the “what” or the “how”--is the most important question project management must answer. The answers to “why”--to address a particular customer segment, to set up a long-term product strategy, to improve performance as more customers come onboard--are what the CEO needs to know to prioritize The Tech Scalability Problem among the zillions of other fires blazing in their business.
The second organizational crutch is external: outside development resources. While Jedi-ninja developers are important for technical quality, the business issue during rapid growth is finding the optimal combination of quality, cost, and timing.
External resources can help a non-tech CEO get to the optimal combinations in two ways:
First, they can provide a specific proposal. This gives a different perspective on the nature of the problem and how to solve it. Project management must be the anchor in defining the scope and goals of the project, and the tech team is the sherpa that educates the external team on the reality of the existing technology. This will give the CEO at least a comparison to the internal team recommendation.
Second, the CEO might actually use the external team. Whether onshore or offshore, these groups have improved tremendously since the horror shows of the early 2000’s. In addition to development, some outsourcers are actually strong organizations with more UI designer/psychologists than coders. With the internal project management lead and the outsourced development team, the internal tech team can focus on fires and near-term deliverables.
Whether you’re a high-flying social-media-web-wearable-tech startup or an old industry application company or a tech-enabled service business, if you grow, you will encounter The Tech Scalability Problem. Being self-aware about your flavor as a CEO, finding a business leader for the tech team, having a reliable internal product management team, and being open to outsourced development can help you survive the problem and even thrive.
ALAN YING: Alan is an owner and the non-executive chairman of KLAS Enterprises, a leading provider of healthcare information services. Most recently he was a Venture Partner at Chrysalis Ventures, a leading healthcare venture capital firm based in Louisville, Kentucky. He was formerly the founder of MercuryMD.