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When’s the right time to adapt? This week Paul and Rich discuss how companies adjust to changing times and risks. They consider whether you need a culture of fear in a company to force change, or if innovation can come from a positive and aspirational place.

Transcript

Rich Ziade You can get a haircut and get a curler, a French curler, in one place. Amazon can’t don’t that.

Paul Ford Yeah, don’t get a French curler from Walmart. [music fades in, plays alone, ramps down]

PF Alright, rich.

RZ Yes, Paul. How are you today?

PF I don’t have time for that. Here’s what we got to do. I’ve written down everything that we’re going to deliver for this software product, we’re going to, it’s going to be it’s kind of like a content front end, you can put the words in there. And then it’s also kind of API. And I’m going to be able to use it to book tickets, and then it’s going to email that to all the people. So it’s really it’s doing everything we said it would. It’s a great product. And I’ve written every single aspect of what we’re going to ship down into this statement work. And so we need to sign that and get started tomorrow. Yesterday, frankly.

RZ Alright, Paul, that’s really interesting. I know you’ve been working hard on this, and you’re a passionate person. 

PF Yeah, yeah, yeah.

RZ First off, how was your weekend?

PF That’s not relevant to software development, but it was great, frankly, you know, and just getting through looking forward to everybody being vaccinated. But but don’t get distracted. Man. We’re gonna sign a contract here. And we’re going to get started. And this is exactly the software we’re going to deliver in six months. Right?

RZ Okay. And you’ve got you’ve got to greenlight for this? You’ve got the budget? You got everything you need?

PF Oh, hell yeah! All set. Good to go. Let’s go. This is what we’re going to build.

RZ Alright. Well, let’s just make sure we’re not moving too fast here. 

PF Okaaayy…

RZ I mean, everything is working. It’s all working. [Paul laughs]

PF I love when the when the client, oh, and the client says, “Okaaayy…” I’ve heard that. I’ve heard that “okay” stretched out about three minutes long. Woooo! Breaking character there. Now, look, here’s what I’m getting that we tell everyone over and over that too much specificity is the enemy of shipping your software, you think you’re going to be building one thing, and you’re going to find out about three, four months, and you’re building something different. And you and I say that like that is just the nicest most natural thing in the world.

RZ Well, and to clarify, we do say you should know directionally which way you’re going, that’s meaningful. But yes, don’t be too specific because it tends to shackle you.

PF So here’s the big question. Right? This is the big question. And this is a question with a terrible answer a lot of the time and never has–it sometimes has a good answer. Sometimes it is doesn’t. This is what I want to talk about with you. Are we building–we’re two months. Done a lot of work, giving a lot of presentations, maybe even shown some design comps. And then you really asked this question, ready? Are we building the right thing?

RZ Yeah, that takes the air out of the balloon doesn’t it? Like that that can really–when they ask that later in the game.

PF Six weeks before shipping, that’s absolute disaster.

RZ This is the 10th meeting in, we’ve narrowed down budget, we’ve narrowed down the shop we want to use, we’ve plucked the team, and then someone starts to show up later in the meetings. Like let’s say it’s a dozen meetings before full greenlight. And at meeting nine, someone starts asking questions.

PF Oh, the Angel of Death is the CFO.

RZ The CFO. Because the CFO has one very particular lens. And it starts with an equal sign to launch into a value equation. [Paul chuckles]

PF That’s right. It’s an Excel formula spreadsheet, that’s right. Yeah, that’s true. They’re very good at software it just and they’re really into and engaged with software, the CFOs office it just happens to be Excel. As long as it begins and ends with Excel. They think it’s great and then after that this is–

RZ I mean if you think about money, so a house, Paul. Okay, I decided it’s time to upgrade the windows spouse sets the spouse “We really should finally upgrade these. It gets getting silly at this point, one doesn’t open, one doesn’t close one doesn’t lock, half of them have weird mold around them. I got a lot of issues.” And then spouse number two says this. “I think we’re fine. Why don’t we talk about this next spring?” And the truth is spouse number two is kind of a party pooper. But suppose number two is saying something very sound which is we’re fine. The windows close, water is not coming into the house. We are actually okay, no risks.

PF No risk. No risk here.

RZ Contrast that with came home from vacation. They were in Aruba, all inclusive, sipping on sugary drinks and eating more shrimp than they really should every their lives. And they come home. They’re exhausted. Uber drops them off. They open the door. And there’s two inches of water in the kitchen. Right? A pipe burst. You know what’s not going to happen there? What’s not going to happen? There isn’t going to be much of a debate about the money they’re about to spend.

PF No, that’s true. All the money–

RZ No, nobody’s gonna tolerate it. It’s like this is our home. The water damage is the worst kind of damage. We’ll figure out what the insurance but no matter what, they’re not going to cover all of it, it doesn’t matter. We’ve got a right this ship. Software is approached in two ways, aspirationally to have a better world out there. Wouldn’t it be nice to have new windows? Yes, these windows “work” in quotes.

PF They’ve got some cracks, it’s hard to lift them up. You know, we should get the new windows because that would give us amazing window opening power. And that would actually be so good for everyone in this organization.

RZ There is no better way to neutralize and render impotent the CFO, then when the kitchen floods.

PF Because we’re gonna lose the whole house. 

RZ They don’t debate. They don’t argue. But when they are in a posture of someone putting forward something forward looking aspirational, quote, unquote “nice to have”, they sort of settle in to this warm bath of Excel formulas, and rationalizations and they seek out pattern or look for words that match the words of your project and say, well, “we’re spending that over here!” And it’s a very common thing you see, because it is the sort of hemming and hawing debate that happens among spouses. This is real, right? And it is the mistake that many often–I can’t imagine what was going on at Walmart. While they are watching the slow motion freight train of Amazon for probably 10 years, probably eight to 10 years. It took me years to get wind of the fact–

PF You know what’s going on, which is like yeah, but they don’t have a million storefronts at all. You know, they still, they’re there to “we can deliver stuff just fine!” And the first wave of people who are like, Hey, we got to watch out for this. And they’re just Cassandra’s and everybody’s like, “Yeah, come on. Yeah. Oh, boy, here comes old Amazon!” Amazon doesn’t have greeters. And then they, those people quit. They’re like, yeah, I’m gonna go over to Jet.com. [Rich laughs] I don’t really, this is ridiculous. 

RZ It’s frustrating, right? Like, you see the right thing. And you see actually danger ahead, and you’re trying to advocate for it. And everybody thinks you’re, you’re getting ahead of yourself, relax, dude, we just did six and a half billion dollars in revenue. And $180 million, like we decided to pivot towards potted plants. And we own the market now. 

PF But more than that, you’re the CFO, you’re the CFO. And you’re just like, Look, I actually have a real crisis over here, which is that we were going to expand into South America. And that’s going very, very poorly. So you know, life being short. Yeah, I’m sure that we’re going to do more with computers. But you know, Amazon is not really a threat. And you know, what I think about a lot, they don’t have the right newspaper, right? Like, they read the Wall Street Journal, and you know, or they read whatever, but they actually literally don’t have the newspaper that gives them good updates about what’s coming. They’re getting the news about everything else. And then so that’s how it sneaks up on you.

RZ I think they’re they have a very skewed view of the world. They can’t imagine anyone threatening their foothold, I think Verifone–

PF But you should really, like we should go out and subscribe to all the newsletters that say, “low code will destroy the services business” like you and me. And I mean, we do, which is good for us. We expect at any time that the technology industry will rise up and destroy everything that makes Postlight special. And we’ve actually kind of quietly reinvented the way we deliver services a couple of times since we started the company. But that’s–we’re small, right? Like if once you get to 1000s of people, you’re more focused on this kind of “let’s keep it stable, that one thing we tried over there, it didn’t work so good.”

RZ You know, what drives this Paul? You know, as I’m thinking about the companies that are able to nimbly adjust and the ones that don’t, I think the ones that nimbly adjust, learn to hate themselves, learn to be unimpressed with their success. 

PF See, that’s why I’m ahead of the curve as a CEO. [Rich laughs]

RZ There you go! I mean,  let’s go through a couple of examples. The internet caught Microsoft flatfooted, because they swore that the desktop and all those DLLs that just keep talking to each other are the way to salvation. And little by little, they watched something profound happen. And then all of a sudden, an email in Gmail comes out. And it’s like, what the hell is going on? Outlook runs the world. Microsoft Outlook runs the world. And then they change leadership. And they change their mindset. And they stopped loving and stopped becoming impressed with themselves to take out the core rendering engine, the core parsing engine in Internet Explorer, a product of probably 20 years of software development, and to say, Hmm, chromium is better. Let’s just use that. And we’ll just call it Microsoft Edge. Nobody cares. That takes a lot, right? Versus the organization’s–and you know, there’s probably a long form story about Blackberry and how they swore the chiclet keyboard was going to be the most defensible piece of hardware ever in the existence of phones. And I think they went on this massive endeavor towards a flat, like a think a touchscreen phone did come out eventually and it was bad.

PF Look man, I’ll tell you what, don’t ever bet or invest on client or customer loyalty.

RZ There is no such thing. There is no such thing.

PF Like there’s no such thing. I mean, I love all of our clients. They’re like my family, I go to some of their houses sometimes, but it is, ultimately a decision can come down and they can call me in and they go. And it’ll be awkward, though, you know, we can at least that’s all we got, though. All that Postlight can really do, all that any company can do, is make it awkward. Unless you’re Salesforce, then you can just lock everybody in a jail called Salesforce. They can’t leave. That’s a hell of a thing.

RZ But even they are constantly looking around to see where competitive advantage lies. I mean, the Slack acquisition is telling people like, Huh, that’s weird. It’s not weird. They’re scared that Slack is gonna actually obliterate the CRM, and people are just going to talk to each other all day. And it’s like, shit, we have to be over there.

PF For it’s part, Slack is going head to head with Microsoft, which is just a beast to compete with. 

RZ Exactly, exactly. 

PF Like this is the thing. Don’t get it twisted that that rich is saying Microsoft, the gentle company. Microsoft is savage, giant kaiju monster that will destroy any city it sets its mind to that’s right just also knows that it can fail.

RZ You only have to go back 12, 15 years to know that, to have a meeting and say it’s time to bring the full Microsoft Office feature set to iOS was just tears are flowing. People are screaming, it’s just–

PF “What the hell? This isn’t Microsoft?!”

RZ Yeah, exactly. And then now you can you can get the whole thing. The whole thing is available on Mac on iOS, and they don’t care. That underlying thing doesn’t matter.

PF Yeah, I pay for Office every year. I have no idea why at this point. 

RZ You know, the ultimate example of being driven by self hate and paranoia is Amazon. Every day Amazon wakes up and feels and looks at a sector that has no business looking at like, I don’t know, independent films, and says, “Why are we failing there? Look at us abject failures.”

PF It’s true.

RZ So Bezos has this quote, which is attributed to him, which I think creates just a good warm, supportive, inclusive environment. And that quote is this “wake up every morning terrified.”

PF I mean, some people get to do that organically. But he’s not talking about that.

RZ No, he’s not talking about that. What he’s talking about is the fact that your lead your advantage fleeting. That things can turn in a minute. I think it speaks to a lot of the diversity, I think, I think that diversification that you see out of him, and there are a lot of failures, by the way, they don’t hit home run after home run, they have put out some of the shittiest hardware, like that fire stick, that fire stick is holding doors all around the world. It is holding doors, it is used as a wedge to kind of keep a window open. [Paul laughs]

PF Oh, you don’t think that you don’t think that a beautiful electronics product that is literally thrown in a bin at Best Buy like a like a stuffed animal at IKEA? [Rich laughs]

RZ It’s a dollar too! They should just put in cereal boxes. It’s the shittiest thing.

PF Remember when they did the phone? There was a point where Facebook and Amazon both did phones, and they were just they were gonna own it. It was, it was Android. They were all they were so so excited about themselves. And it was just [Paul makes explosion noise]

RZ Yeah, so that’s a pressure cooker environment. It’s known, I’ve known people interviewed people who worked at Amazon, I’ve known people worked at Amazon. It is a place where fear and a bit of anxiety just drives a lot of what happens there. That is real. That is a very real thing. It is not known for its kitchen, it’s like lunch room or it’s cushy beanbag chairs.

PF No, it’s stark opposition, right? Like Google, you know, hires a chef and you get the back rubs, you get to go down a slide to get to your office. They make it incredibly cushy. Amazon, the culture is, you know, the publicly expressed culture is are you good enough? And then you know, and I look, people get motivated in different ways. There are times in my life where I wanted that sense of, are you good enough? And I still have that internally. I’m still driven that way.

RZ I think no doubt that sort of a shared psychology that you have is part of the reason Postlight is as successful as it is. I’m convinced of that. I’m not saying it’s healthy. But I think that’s a real thing.

PF Here’s the problem with it. Right? The problem with building that into your culture, I don’t think that’s our culture. I think that’s you and me. I think we actually took some steps. Just like you try not to mess up your kids. We took some steps to build a healthier culture and post late and we empowered people to do that. And I’m sure there’s some of our anxiety is in the firm, that is life. But the great fault of this approach to management where it’s like “you’re just not good enough” is the minute somebody wakes up and says, “You know what, to hell with it, I don’t care. Yeah, go build your go build your API, I think actually, I’m gonna go over here, make a fine salary and not be miserable all the time.” The minute they say that out loud, you’ve lost all your power, right? To get them to do the next thing. And then they might as well just go the next day, because they’re never coming back. Right? So you set that dynamic cop into everybody’s kind of “gotta work harder, gotta get it, gotta go, gotta go.” And then the moment they go, “why am I doing this?” There’s no answer. And they leave. So to me, that is a risky culture. Certainly they did just fine. 

RZ Let me ask you a question. Do you think innovation can come out of just optimism and positivity? Or does there need to be some paranoia and anxiety? And by innovation, I don’t mean entrepreneur, I mean, within a company.

PF Here’s the lesson I’ve learned, and I’ve learned this from a lot of it’s from from my partnership with you, but also from the way that people work inside of the company. Like I’m just thinking about Chris LoSacco, who is one of the people who runs digital strategy. Lots of innovation and lots of creative energy is really, really good. As long as it’s married to really good execution. Really good execution doesn’t have to be negative. It doesn’t, but it does have to be critical. And it does have to be sincere.

RZ No, but let me kind of take a scalpel to what you just said. Execution makes the assumption that the mandate has been given. 

PF No, I don’t believe that.

RZ You got to give cover to good product leader to go do it. My point is, can somebody–does a good mandate like a “Clear the roads! We are doing this!” Does that come out of positivity and optimism? Or does that come out of some paranoia and anxiety? 

PF Okay, let me reframe this entire thing for you. Ideas are worthless, ideas are great, they’re wonderful, and they’re worthless. Have as many as you want. Sometimes people DM me and be like, Hey, can you you know, I got an idea for you. You want to build it? Yeah. And it’s like, seems like a good idea. But I’m gonna tell you what ideas are worthless. I can have 50, I can sit down with you right now, we could sit here and come up with 50 product ideas, any one of which, within 18 months would be in the market worth $100 million. So innovation, right? Don’t get it twisted. It’s all going to happen in that execution. It doesn’t have to be miserable. 

RZ No, it doesn’t. You know what it is, Paul, we see a lot of half hearted innovation we brought in, we’ve been brought into organizations that have just a hanging curveball opportunity in front of them, we are in the house now, we’re in in the room with them, because they think we can help them get there. And we’ve seen that momentum just fizzle out and just get ground down into like a fine, sugary dust enough times. And that happens, I think, because of and these are companies that have billions in revenue, and can’t see ahead, I want to, I want to close this with a quote by our friend Jeff Bezos, who by the way–

PF But before you give that quote, because close close it with a quote. But here’s, let me respond to what you just said. So the first thing is like, I think one thing is about to change, I really do, which is that the cost of building a new platform and testing it in the market is so low now, like, let’s say, let’s say it’s in the hundreds of 1000s of dollars and lots of money for an individual entrepreneur, but nothing for a large organization. That you can place a lot more bets in use to be able to. There is a scope of project where if you attempt to do it inside of a big organization, it will get nibbled to death by ducks. But then there’s another scope of project that’s almost like “Well just put it on the credit card!” Yeah, the closer you can get to that the more you can try new things, and then you can see what’s gonna change inside the organization. The problem is the committee when the committee gets in there, innovation has a hard day.

RZ It kills it. It has a hard day.

PF Right? So let me let me take it back before you close this with that quote, let me take it back to the original question, which is, how do I know if I’m on the right path or not? 

RZ You’re asking me that question?

PF I’m doing my innovative project. I’m two months in three months, and what am I looking for that lets me know, yeah, I should double down and get this thing finished.

RZ The right answer is actually not that hard, because competitor across the street is doing it and you’re not, for example, which we’ve seen. So the actual path is not hard. The thing that causes them to lose steam is that there isn’t enough cover in the organization, which means there isn’t enough runway to get there. And when there isn’t enough runway, and people lose their patience, and they’re suspicious, it’s just, it’s demoralizing. It just loses steam 1000 different ways. It gets caught up in the wiring of the original org, of the of the host organism so to speak, and they can’t make their way out. And if you don’t have that cover, if you’re not able to walk into the right level of leadership and say, “Get this shit out of my way, or I’m never gonna be able to get there.” If you can’t do that, or if you don’t have that support, you’re gonna it’s just gonna end the same way. We’ve seen the same movie again and again. And this is manifested in the in the most pathetic corporate security blanket there is the Innovation Group that sits usually in the basement of large high rises, that is just there so that you can check off the innovation box, but they have absolutely no support to actually do anything that could actually have a material impact. It’s the shittiest thing in the world. And we’ve seen it there too. And we’ve been involved in those places as well. So I want to end with this quote, because I think it pretty much sums it up.

PF Alright, sum it up.

RZ What we need to do is always lean into the future, when the world changes around you, and when it changes against you. What used to be a tailwind is now a headwind. You have to lean into that and figure out what to do, because complaining isn’t a strategy.

PF Okay, please don’t be Henry Kissinger.

RZ Alright, that’s Jeff Bezos. 

PF Okay, fine. Well… okay.

RZ That’s actually, that’s Jeff Bezos, that’s his wedding vows. They leaked onto the internet. [Paul laughs]

PF Did you see his ex wife got remarried? 

RZ Good for her. She just unloaded billions to nonprofits. God bless.

PF I’ll tell you what, when she got remarried. I was like, Oh, it’s too bad. You know, she’s doing such good work! She’s so cool!

RZ So Paul, we are Postlight, you can check us out at postlight.com. We are a great partner for navigating big, meaningful change powered by technology, transformational change. We have a really talented group of strategists, product managers, designers, engineers, we ship some really, really cool things. We’ve been doing some really great stuff lately. We just had a demo meeting yesterday, which was a lot of fun. 

PF Oh, my God, it’s so good. [Paul laughs] It really is good stuff. Just all the way down to the platform level.

RZ I feel, you know what, you know, that’s a different podcast, but I feel so useless. [Rich laughs]

PF We should talk about that in the next one. We’ve talked about the changes that are coming. You know, what I realized we do. And this is the message we need to send out into the world is that we used to think we were just doing the build, it actually turns out that we’re doing the strategy by doing the build. People are coming to us and saying I need to get that digital transformation, that sweet, sweet digital transformation. Everybody else keeps selling me on the transformation part but no one will actually do the digital. And I’m like, sure we got that. Let me help you out. And that’s Postlight.

RZ Postlight.com. Reach out, a lot of good case studies on the site. We just put a new one up. There’s a form on the bottom of just about every webpage. So if you want to talk, have questions, have ideas. Reach out. 

PF If you ever want to see an optimized funnel for converting visitors into leads for digital transformation firm checkout postlight.com!

RZ Yeah, no live chat, though. We’ve spared you that. 

PF No, we talked about it for like five minutes. We’re like what are we? Come on!

RZ Exactly. Alright, everyone have a wonderful week!

PF Alright. Talk to you soon! [music ramps up, plays alone, ends]