Culture Eats Technology for Lunch

As entrepreneurs, we rely on innovation to capture market share. In today’s digital economy, it's the innovative application of technology that provides our best opportunity to differentiate.

Uber has clearly differentiated itself through an exceptional software experience, disrupting an entire industry in the process and spawning a steady stream of imitators. Hardly a day goes by without hearing another set of startups billing themselves as “the Uber of_____ (fill in the blank).”

USAA clearly differentiated itself as a preeminent bank when it introduced the first of its kind “Deposit@Mobile,” allowing consumers to deposit checks virtually. Zillow and Redfin are changing the face of real estate by providing data formerly available only to realtors directly to consumers. Software products rule the roost when it comes to most of the hottest companies around.

It would make sense, then, to assume that a robust technical application and exceptional user experience would be the key driver of entrepreneurial -- and product -- success.

Apparently not.

Late last year, a research study, conducted by the University of Maryland's Center for Excellence in Service at the Robert H. Smith School of Business and 3Pillar Global, established the industry's first index for product development success. The study identified six critical components to successful product development, with culture as the most influential. The research revealed that employees must truly believe that their contributions to their organizations are valued and feel as though they have room to grow.

The research resulted in the “ Product Development Success Index,” providing a benchmark for software product development readiness. The findings clearly show that culture, feedback, communication, staffing, collaboration and time/budget focus drive product development success more than any other factors -- including technical expertise.

If culture eats strategy for breakfast, as the great Peter Drucker once said, it apparently eats technology for lunch. An organization’s focus on allowing people the flexibility to take risks, be creative, challenge the status quo and be innovative -- what we refer to as “culture” -- is the leading factor that determines product success.

Organizations seeking to optimize their product development process should focus on creating a culture that fosters innovative thinking and strategy. According to the research, an innovative culture is defined by the following characteristics.

1. It makes known that every employee's contributions are valued

Leading organizations make it very clear that everyone’s contributions are valued. Individuals throughout the organization are treated with respect, and ideas are respected regardless of where in the organization they germinate. Within high performing organizations, there is a spirit of appreciation and a commitment to celebrating success. Leaders in these organizations are the team’s biggest cheerleaders.

2. The organization provides an opportunity for all team members to grow

Highly innovative organizations provide an opportunity for individuals to learn and grow. Google’s 80/20 rule is one well-known example of a company providing on-the-job freedom to work on something outside their normal day-to-day responsibilities. Atlassian, which makes the popular JIRA suite of products for project management, holds “FedEx Days” once a quarter, where employees get 24 hours to build and ship any product they’d like as long as it’s tied to an Atlassian product. Team members at the most successful companies regularly participate in new projects, take on new responsibilities and try their hand at new skills.

3. It embraces the idea of continuous improvement

Innovative teams are not afraid to take smart, calculated risks. They embrace the idea that perfect is the enemy of good, or that something can always be better. They release products early and often and embrace customer feedback to refine, reiterate and improve. High performance organizations are continually improving their products and their processes. They learn from mistakes and refine their performance over time.

4. It provides the flexibility to be creative

High-performance cultures provide the flexibility to think differently. They encourage out-of-the-box solutions and empower individuals to test new -- even obscure -- ideas. They foster creative thinking. Innovative teams respect the power of the individual and provide teams the opportunity to create new, differentiated approaches.

5. It embraces cross-departmental collaboration

The best product development organizations tear down silos. They work collaboratively across the organization, communicating and, more importantly, engaging, through both informal and formal channels. Individuals and teams are fully engaged.

Within the most innovative organizations, cross-departmental collaboration is standard practice and part of every day life. Cross-functional engagement is highly valued. Technologists work closely with marketing. Marketers work closely with product management. Communication is constant and established as the status quo.

6. Culture, not technology, is the driving factor behind innovative companies and products.

Software products are disrupting industries because strong cultures are challenging the corporate status quo. As the Product Development Success Index clearly demonstrates, it is the soft skills, not the technical capabilities, which organizations need to develop if they want to become leaders in their industries and proficient at developing successful software products.