Wednesday, January 28, 2015

Software Quality: A Race to the Bottom?

Another Old Hand, whose opinions are based on very relevant experience, says that the software industry is trapped in a race to the bottom in software quality.

The trap is that investors' needs are divorced from software companies' mechanisms for producing value. Investors want the stock price or corporate valuation to improve in every reporting period; every year, every quarter, every month, every day. Investors are entirely uninterested in what a company did last month. They invest today to reap profit in the future. Companies, on the other hand, can only demonstrate their ability to produce value by completing projects; shipping disks, posting content, publishing interfaces. But it is hard to encode much value into a software product in a day or a month.

To impress investors, a company must ship, soon. Since investors aren't interested in what the software does, there is a strong incentive to ship early, but less incentive to ship complete or useful code. For a startup which has never shipped, it's all about who has the value story with the most zeros on the end of it and the shortest time to delivery.

To impress partners and customers, a company must ship. Customers are largely uninterested in what a company plans to do. They want products now. If a potential customer wants functionality, and there are competitors, the one who ships first wins the customer. Having won, it's a relatively smaller problem to keep the customer. Customers are used to defective software.

Thus, according to my friend, what wins is crazy, caffeine-fueled speed. Quality doesn't matter. By the time the customer finds out the product is imperfect, the sale is made, the money paid.

This reasoning depresses me. I hate what it means for my profession. Yet I can find no flaws in the argument, only small exceptions; established quality brands; software products (databases, kernels) that can never work in the marketplace if they aren't reliable; special customers who know what they need and write quality into their purchase agrements.

Monday, January 5, 2015

Reading Your Own Press Releases: A Management Antipattern

To customers, a new company is an unknown. A new company has no reputation. A new company must focus on providing innovative or cost-effective solutions to customer problems, because it's the only story they have to tell. Nothing wrong with that.

Well-established companies have more to say. In addition to presenting their latest product's features, they can tell customers about their previous products, their many years in business, their reputation for quality. Nothing wrong with that either. It's easy for a customer to choose an established company versus an upstart competitor, even without doing a bunch of homework, because the established company is a known quantity.

But sometimes, an established company loses its way. They begin to tell themselves about their reputation for quality, their years in business, and their leadership position. Their executives tell their product teams that they can charge a premium price because they are the "Cadillac brand", regardless of the strength of competitive products. If they say this often enough, it becomes received wisdom within the company. I call this behavior reading your own press releases.

A company that is reading its own press releases is already past its prime. When a company starts reading its own press releases, it stops worrying about solving customer problems, or being better, faster, and stronger than the competition. They may even get away with this for a few years if they really were market leaders. But eventually, they find themselves sidelined by their hungrier competitors, and their position of advantage evaporates.

I've worked for two companies who had this problem. One is now a division of a conglomerate, who fixed the problem by replacing complacent managers. The other annoyed its partners so much with slow product delivery that the partners made the company irrelevant. Last I checked, this second company was still in business, but they shed three quarters of their staff in a paroxysm of downsizing, and never recovered their former greatness.

I bet you can see some obvious examples in the news of large technology companies who have been reading their own press releases. Where are their new products? Missing in action or underwhelming critics and customers. When your division manager starts talking this way, tell them to wake up and smell the innovation.