Know these Rules to Rule SaaS

I’ve been a fan of Joe York since first getting introduced to his SaaS Rules of Thumb mathematics a few years ago. Start with SaaS Metrics Rule-of-Thumb #1 and read all 10 rules. It gets a little deep, but be sure to at least come away with the concepts and relationships. These are must knows around which to build successful software strategies and profitable businesses.

If you are familiar with his work, start anywhere in his chaotic-flow blog to continue to reap knowledge from his experience and insight.

 

It’s Time to Make Smart & Connected Part of Your Strategy

Smart Connected Products are Transforming Competition. So state Porter and Hemplemann in a recent HBR article by that title. And, you don’t have to look far to see the changes around you. Last week, I had a chance to test drive a Tesla and I challenge you to come away with any other conclusion. Upgrade to the latest release of the car’s operating system (yes, you can update it much like an app on your phone) and it will auto pilot itself through traffic following road bends, keeping pace with traffic and even change lanes when requested without driver assistance. The car is a showcase for what the article terms “The Third Wave of IT-Driven Competition.” Using embedded sensors, processors, software, and

Gartner Top 10 Strategic Technology Trends for 2016

Always interesting and fun to share. Here’s Gartner’s annual prediction of strategic trends shaping technology over next 4 years. Gartner groups these into three broad trends:

The first three trends address merging the physical and virtual worlds and the emergence of the digital mesh. While organizations focus on digital business today, algorithmic business is emerging. Algorithms — relationships and interconnections — define the future of business. In algorithmic business, much happens in the background in which people are not directly involved. This is enabled by smart machines, which our next three trends address. Our final four trends address the new IT reality, the new architecture and platform trends needed to support digital and algorithmic business.

See their press release for more definition and detail.

Agile Elements

Agile is a way of approaching business.  It is about delivering value in everything. It is about always learning and always doing better. It is about creative problem solving. It is about discovery as you go and drawing on experience. It is about having enough savvy to know that no two problems are quite alike and enough experience to confidently explore differences. Agility gives us room to maneuver and grow. It is in that spirit that, my blog, Agile Elements is published.

Strategic Context

I’ve used Balanced Score Card (BSC)  and similar approaches for a number of years to organize the elements of and facilitate teams in creating a Strategic Plan. Recently, a CEO suggested he preferred Objectives, goals, strategies and measures (OGSM). No worries, the terms are a little different, but the pieces are similar. I went about mapping the results we had gotten from our BSC facilitation to the OGSM model:

This exercise got me a little concerned since the result was missing much of the context in the strategic plan. We have objectives, but why do we have them and how do they tie to our mission? What customers will we target? How will we win in the market? How do we differentiate? What strategic themes do initiatives support? Have we covered all the business perspectives needed for long-term success?

To me, being able to communicate why we have the pieces of our strategy and strategic plan is as important as the pieces themselves. OGSM strips away the structure for this shared understanding. A recent article in HBR makes the resulting problem clear.  In Stop Distinguishing Between Execution and Strategy, Roger Martin makes a simple, but powerful observation. Strategy, he says, is about “making choices under uncertainty and competition.” Given this, we need to arm the entire organization with the ability to make the best choices at all levels. When we start taking pieces of the plan out of context, he reasons, we dangerously separate doing from making choices and therefore, from the strategy.

In the military, we were similarly fond of restating Field Marshall Helmuth von Moltke who famously said, “No plan survives first enemy contact.” To counter this, we made sure all operational orders communicated context by starting with a Situation Report, including a clear Mission Statement, which is always given twice, and communicating Intent and Concept of the Operation. This context is given before the more specific Maneuver Instructions. To maximize any unit’s chances of success, everyone, down to the lowest private, needs to know the context so they can make the right choices as unanticipated events unfold in the heat of battle.

OGSM’s short coming is that it starts with maneuver instructions. It stops short of asking and answering “Why?” I suggest keeping contextual elements from BCS (or a similar organizing structure) to add intent to strategic planning so that everyone, at all levels in the organization, can best accomplish the mission.

Different Metric Types Meet Different Needs

Enterprises should differentiate between different types of metrics and how they are used. Lagging, Leading and Diagnostic measures should be combined to ensure they are supporting long-term objectives while focusing on intermediate and daily activities that make a difference. As a quick reference consider the following table for getting the right mix:

Type	Definition	Review Freq	Examples	Baseball analogy
Lagging	Show results and attainment of goals. Typically take time to get outcome.	Quarterly, Yearly to Multi- Year	• Revenue • Profit	• Final Game Score • Win/Loss Record
Leading	Give early indication into trends.	Weekly to Monthly	• Average price • New Sales Booked	• Runs • Outs
Diagnostic	Show why results were achieved and how improvements can be made.	Real-time to Daily or Weekly	• Bookings by type, time, customer, region • Cohort conversion metrics	• Pitches thrown • Errors

Centers of Excellence Revisited

I first wrote about Centers of Excellence about 5 years ago and it remains one of the most popular topics here. This post summarizes and updates thoughts on Centers of Excellence (CoE) as a way to build a capability to deliver value when specialty skills are needed. It covers:

• The rationale for creation
• The qualities of a good CoE
• How to grow a CoE
• Getting started