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Build the Machine that Builds the Product

When we talk about the need for innovative companies, schools, governments, and others, we mean those which are consistently successful…

Build the Machine that Builds the Product

When we talk about the need for innovative companies, schools, governments, and others, we mean those which are consistently successful, not just lucky. However, this usually takes a bad turn into speculation about the sources of success (leadership, types of governance, timing, genius, etc).

What’s the secret?

It’s none of those things. The truth is well known and plainly visible. Understanding how things get made—that mechanical formation process —is the key for consistent success. The urge for simplification in the news can muddy understanding about how good institutions actually produce things. The best ones have a framework in place that behaves like a learning womb. It consistently gives birth to new inventions on schedule and conceives new ideas. It is a specific combination of stuff which defines how the company creates, learns, and adapts to new information.

I call that specific arrangement of stuff “the Machine.”

Actually bringing a product to market is a grueling process that transforms an abstract idea down into a very specific thing. The end of that process is increasingly mechanical, small, and expensive. While talent and craftsmanship are critically important at every level, they are not sufficient by themselves. Many people struggle with the tension between craftsmanship and ordinary manufacture because they don’t yet understand the Machine. A good Machine makes sense of those relationships and helps to navigate hard choices as they occur.

That Machine requires its own making.

Lots of people like to talk about “the creative process,” but whiff when it comes to having any insight about adaptive Machine structures. In fact, I think our culture generally has trouble seeing how strategy is directly connected with implementation. People often complain how management needs to “get out of the way” so “shit can get done.” But that’s a response to bad management, or more profoundly, a missing Machine. Properly utilized, the Machine connects strategy with implementation by coherently organizing everything in a way that can respond and adapt to the unexpected. New information —which is inevitable—actually makes the Machine smarter, better. Things that normally threaten fragility (time, change, volatility) actually improve the Machine.

Nassim Taleb has named this quality “AntiFragile.”

The type of company governance only matters if it fails in building a Machine which establishes the right patterns for research, planning, execution, and adapting to the unforeseen.

Misconceptions also lead to problems with how creativity gets discussed, studied, and valued. However you define that word, it’s ultimately a discrete action (or reaction) that gets exercised at a certain point in time, often intuitively. A predetermined process cannot be creative, it can only be adapted. And how a process adapts must be purposefully constructed ahead of time. Change is constant and new events are fundamentally unpredictable, so a framework must be in place for dealing with them. Simply guessing about how to adapt process (constantly) won’t work because it’s too slow and inconsistent. That turns into a mess really fast.

Charisma or genius can carry a company for a long time, but without a Machine, it will die from indigestion. Steve Jobs jumpstarted and carried Apple during his time with incredible vision and charisma. I don’t think he actually built the Machine. It sounds like Tim Cook is now attempting to build it which has resulted in some decisive changes. This may take a while, even turnover, but it is those changes which make me long on Apple.

The parts of the production funnel with the most press coverage are usually the open mouth and the final product. But it is the Machine inside that really counts. The initial stages of ideation and conception can be a messy process because it involves experimentation, intuition, and research. It seems artistic. But, that process doesn’t start without a context. Deriving new ideas is a vining and vatic process deeply connected with the Machine itself. It is those patterns of production —forming, learning, adapting, delivering—which ultimately hone the wisdom for capturing new ideas.

The Machine funnel is bi-directional. As new stuff happens, procedures are put into place for moving meaningful data back upstream so it can help gauge the realism of longer term releases and goals. How much can we complete in 3 months, 6 months, a year? Will our goals be met in time? Do we have the right size team for what we are trying to do long-term? Having some mathematical sense of those answers helps to make decisive decisions about hiring, goals, and much more.

From the outside, the process seems creative. In actuality, it is knowable and has describable parts. It weaves together data, people, practices, and tools. The way they get woven together comes from a purposeful conceptual arrangement for (re)establishing priority. This Machine can greet new impulses with a sharp blade if they don’t support higher level goals, or roll them into a hierarchy of priority which downwardly cascades into proper alignment of deadlines.

The Future

Someone recently asked me about the difference between the “reports” we’ve always had and the “analytics” of today. Is that just a language change?

Kind of.

Networked analytics are different because they have the potential to become infused with value while it’s being collected. When we begin to adjust the values of meaning based on insight, that has the potential to grow into ever more accurate analysis.

This works best when data is given relative value (like points) to specific events during the process of trying to achieve certain goals. While that happens, a data collection process is happening at the same time. If those values can easily be adjusted as time progresses (by people) while new things are learned, the interpretation of data gets ever more refined. Ideally this would bring reporting to life in real time way that is customized to our own circumstances and goals.

The future of software —and process management in general—will become about tools which combine action and insight. New actions generate data and that flows back upstream with certain values. That aggregates into information which is then compared with achievement goals to provide useful insight for adaptation. If all this happens within the same tool, that’s powerful.

Convenience is key. The best tools will conveniently collect data as organizations work, allow the assignment of value to certain data, and then combine them into practical insight for taking new action. Being in charge of determining those values is where the power of meaning resides.

Success will come to those companies who create tools that conveniently combine action and insight into the same place. This requires both beautiful design and powerful engineering. Without good design, the tool doesn’t get used. Without power, beautiful interfaces yield no insight.

The Agile development process symbolizes the kinds of patterns software products should facilitating for industry, and perhaps even individuals.

My metaphor of the Machine isn’t meant to diminish the importance of excellent people nor craftsmanship. Rather, it aims to put those things into the context of a structured process which isn’t whimsical about how effort gets allocated. Excellent people and practices are key for this process to work. The most influential business decisions come from choosing both wisely and consciously improving them on an ongoing basis.

Building complex things requires the Machine to manage critical assumptions and tactical direction in a way the provides clear structure for new decision making and accountability.

This funnel has implications beyond mere manufacture. The human life cycle is the ultimate expression of this process: conception, gestation, birth and new insight.

At the individual level, we often act purely out of intuition. However, there is still a funnel. Writing an essay is a process of whittling down ideas, responding to one’s own words, deleting, rewriting, and finally publishing. Even though data is not tracked, I think of intuition as a kind of pattern recognition which gives us certain feelings or impulses. We get better at that with time. Individuals improve by paying attention to what is happening and consciously adjusting course over and over again.

While there is no definition for “mental health” (only problems), I have come to believe it means the following:

Health = The ability to achieve personal goals through a process that accurately perceives consequences, develops insight, and adapts behavior in a way that produces continued learning.

That is certainly the definition for a healthy business, school, government, or any other social institution.