I Have Given You a Service, If You Can Keep it

In my world of technology operations, two major themes recur again and again (redundantly):

  1. Incentives
  2. Litmus Tests

I have written about incentives extensively on this blog. In short, as the saying goes, “you get what you measure.” Don’t expect extra customer handholding if you measure your support team by time spent on issues or minimizing average ticket time. Sure, you need to operate cost-effectively, but the key word is “operate”.

It is similar to security and compliance. I have very few security and compliance people whom I really respect. Most of them are either too technical to get the business, or so security and compliance focused that they’d be in heaven if we froze everything. No business, but definitely no security issues!

The goal, in both those cases, is to operate a business. If you are 100% secure but serving no customers, the security is worthless. Similarly, if you are closing tickets at the right of 500 per minute but every customer is dissatisfied, you have great metrics… and will be out of business soon enough.

The other theme that recurs is litmus tests, evaluating how well you really operate according to your stated principles.

No matter how much you say you may operate in a given manner, there are litmus tests, evaluations, you can apply to determine if you really are operating in that manner or not.

There are litmus tests for everything from a positive workplace environment to product vs sales driven to service levels.

Companies often struggle between being product-driven and sales-driven. Sales-driven companies chase each sale, and quickly become custom shops with consulting margins, operating costs, scale issues and valuation multiples. Of course, the best product-driven companies evaluate every major deal that does not fit within its parameters to see if it is this customer or a sign of the market, but if it doesn’t fit, they just don’t do it.

The litmus test for product-vs-sales is simple. You are at $10MM and pushing for growth. In your door walks a marquee customer, perhaps Google or JPMChase or GE. They are looking for a deal worth, say, another 5-10% of your top line. The only catch is that their requirements are so onerous, and their specific needs so different from what you have on offer, that you are likely to get sucked into it for months on end. The deal is unlikely to be profitable for some time to come, if ever.

Do you take it?

Product-driven company says “no”, sales-driven company says “yes”.

It is fine to be either kind of company, as long as you are honest about what you are and are structured for it. Which are you?

A great example of the service litmus test came courtesy of CloudFlare and their issues this past week. I respect CloudFlare’s transparency about the issue in their blog post here. However, my favourite line is in the sixth paragraph:

One of the advantages of being a service is that bugs can go from reported to fixed in minutes to hours instead of months.

The litmus test of being a service is precisely that. Without killing ourselves, without downtime, without “all hands on deck”, what is your lead time “from reported to fixed”?

Microservices (or nano-services) and DevOps help tremendously, but the fundamental difference is between being a product firm and a services firm. In a way, that is another litmus test. If we had to switch from monolithic and “walls of separation” to microservices and devops, could we do it? Product companies have great difficulty, services companies much less.

CloudFlare, clearly, not only is selling a service, but they are operating a service.

Conclusion

Ask yourself, do you have a litmus test for every part of your strategy that is crucial to your success? Do you pass it?

If you don’t have it, devise it; if you don’t pass it, change whatever is necessary.

If you need help, don’t hesitate to ask us.

About Avi Deitcher

Avi Deitcher is a technology business consultant who lives to dramatically improve fast-moving and fast-growing companies. He writes regularly on this blog, and can be reached via Facebook, Twitter and avi@atomicinc.com.
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