Does Your Digital Service Offering Look Like Your Organization

Customers do not pay for your organization, nor are they interested in it. In spite of this a company’s offering is driven by its internal dynamics in many cases. One of the major challenges is to recognize the internal dynamics and fight actively against them. This is particularly important in digital service offering as launching a new service globally is a fast and simple process done over the internet. The challenge is even more topical in mobile service offering as creating new applications in addition to existing web-based services is very easy and relatively cheap.

“Products tend to “mirror” the architectures of the organizations in which they are developed”

However, the phenomenon of internal structures driving the service offering is not new. One of the most famous articles addressing the effects of internal structure to a company’s products was published already in 1968. The phenomenon has become to known as Conway’s Law. According to Conway’s Law “any organization that designs a system (defined more broadly here than just information systems) will inevitably produce a design whose structure is a copy of the organization’s communication structure”. (Source.)

Further studies have validated Conway’s findings and provided support to the hypothesis that products tend to “mirror” the architectures of the organizations in which they are developed. (see, for example, a study by the Harvard Business School)

Taking Conway’s Law a bit further, one could even claim that a company’s organization structure defines the technical architecture, which then defines company’s capability to create products and/or services, which finally defines the company’s competitiveness and determines in which businesses it can compete.

Measures to be taken to tackle Conway’s Law

The first thing to do to fight Conway’s Law is to recognize the challenge — curing can only start after the existence of the disease has been acknowledged. Companies that have recognized the problem have been trying to resolve this problem with various levels of success.

One of the most common ways is to create a role (a person or a team) with cross-functional authority to lead the design service offering from customers’ perspective. If the role of the cross-functional authority is strong enough in relation to the individual functions and the role is responsible for cross-functional business success, the basic conditions for success are in place.

Of course there needs to be other measures in place as well, such as wise technical architecture design and well-informed top-management team.

“Curing can only start after the existence of the disease has been acknowledged.

However, as always, the final outcome depends heavily on the ability to execute. Without a determined and sometimes stubborn execution to cross-functionally optimized service offering and thus the overall business results, you will end up with functional silo-optimized results, and your service offering will almost surely look like your organization.

Written by Niko Mikkola, Head of Mobile Channel at OP Financial Group

Originally published at

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