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The Technology Secret Most Leaders Miss

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Illustration by Jon Han

(This article first appeared in the 2017 Techonomy print and digital Magazine.)

Technology is completely changing how we live our lives, and every company must make technology innovation a strategic priority for its business. This isn’t a huge surprise, so most leaders these days mouth words along these lines. But a surprising number of executives don’t understand something that is obvious to most of us technologists: companies that don’t establish the latest internal software development processes will fail to get and retain the best programmers. And then, those companies will lose.

Great engineers want to have an impact. But the talents of fantastic people are wasted by poor infrastructure and processes that squander their time. And they know it. By infrastructure, I mean things like internal software frameworks, development tools, cloud infrastructure, and the existing base of software code that new applications get written on top of. Getting these systems right is critical to business success. Companies that maintain state-of-the-art tools stand a much better chance of attracting talented engineers and programmers.

It’s not that much different from what happens in a factory in the physical world. If the workers are burdened by outdated equipment, they follow old processes and work in ways that haven’t changed for a generation.  Contrast that factory’s output against a modern agile environment, with a well-trained workforce that uses automation and streamlined manufacturing processes. Everyone knows which team will be more productive. But it’s not so obvious with today’s digital product “factories.” Internal software processes and infrastructure are not very visible, or sexy. So executives disregard them.  Typically, this seemingly-boring internal infrastructure is underfunded and unevolved.

Too many leaders chase innovation, but don’t think about the tools and processes that enable it to occur. Increasingly, senior executive teams are aware of the need to undergo digital transformation. One mistake many leaders make, though, is to assign blame for failures, rather than take ownership of the problem.  It’s easy to blame company culture, or point a finger at poor quality from product teams.  I often hear non-tech leaders say, “If we only hired engineers from from XYZ organization,” or, “We just don’t have that kind of talent.”

It’s true that the best programmers often want to go to the biggest and richest internet companies. But it’s not just because of the money. They’re also attracted to the tantalizing challenges and technical opportunities.  They like working with modern tools in an environment that encourages them to ship products quickly. They also know that in many traditional companies a lot of time is spent pushing back against friction and often an internal resistance to change.

Sometimes companies will hire a few top engineers, thinking that’s the solution to their software problems. But because this new talent has to work in the face of poor internal processes and frustrating, outdated infrastructure, the expected results don’t materialize and the engineers eventually leave.

Many companies are still lucky enough to have talented technologists. But rather than blaming them when they don’t innovate fast enough, you need to help them. And the great thing about quality infrastructure is that a rising tide lifts all boats. An average engineer with fantastic tools can outperform a genius working with outdated ones. If you compare a modern software engineer to one working in the 1960’s, their quality, pace, and productivity today is orders of magnitude greater than it was back then. But biologically and intellectually, engineers aren’t much different (and their wardrobes haven’t changed much either!).

What has evolved are the tools for productivity.  The systems, infrastructure and processes have improved to make possible radically new innovations and ever-increasing productivity.  So ask yourself what would be more valuable: spending money hiring away rock star engineers from Google? Or spending it instead on modernizing internal technologies to unlock the potential of your entire product development team?

Companies that focus here can see radical benefits. For example, Amazon Web Services (AWS) originated from internal work to build simple services, tools, infrastructure, and platforms.  That not only helped all of Amazon’s software teams move faster, but made it possible to create an entirely product that has helped turn the chronically money-losing company profitable. During the five years I was chief technology officer at PayPal, we prioritized improving the work environment, infrastructure, and tools. The resulting dramatic progress cut the time needed to take a software product from conception to market by 70% and unlocked a flood of innovation.

Every company needs to embrace the fact that, in crucial ways, it is a technology company. GE is a great example to emulate. Its CEO Jeff Immelt has a clear vision that GE needs to be more capable in software. He is investing heavily to make the 124-year-old company operate like an innovative startup. Part of that has meant building world-class software infrastructure.

Creating that environment and improving your company’s product-development and engineering capabilities doesn’t just happen. It takes significant investment, focus, and discipline. It may take years to move a company’s culture, technology, and its talent forward. But any company can do it.

James Barrese is an independent director, advisor, and the former CTO and senior vice president of Payment Services at PayPal.

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