Building a Great Software Company – Part I

Posted on Saturday, July 12, 2008

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Over the past couple of weeks I have been reading “Good to Great: Why Some Companies Make the Leap… and Others Don’t. Well, it is an amazing book and Jim Collins does a lot of research to find out what makes a company go fro good to great. I would recommend this book to anyone who wants to take his company from one level to the next or to potential job seekers who are looking for their kind of employers.

Good to Great - Book Cover

This book got me thinking into the direction on what would it take to make a software company really great. My thoughts are specifically targeted towards the small and medium software companies because there I see a lot of scope for putting the thoughts into action.

Some of the thoughts can be applied to the well oiled large companies too but many large companies, in my view, are too bloated to take note of greatness. The author talks of a flywheel, this flywheel can be thought of a large iron wheel, which needs to be moved rotation by rotation thus improving every time on people, thoughts and action. Initially it is difficult to move the flywheel but gradually it starts moving and then with very little effort it can start accelerating.

For those of you show want a quick walk through of the book, this summary would be helpful.

Anyway now applying some of the same concepts to the software organization. I feel any software organization has the following 5 critical components that it needs for success.

  1. People
  2. Brutal Facts
  3. Core Focus
  4. Revenues
  5. Branding

All 5 factors need to work in unison to make the flywheel move. The organization needs to have good people on board. It is the people who drive the software industry. Software is created by people not machines. The organization needs to understand the brutal facts about the business environment it operates in and needs to do a SWAT analysis to find out the facts. It should also have a core focus, if it tries to do too many things, then it might eventually become a good company but certainly not a great company. Next in line is the bottom line, revenues, the reason which keeps companies afloat. Great companies have been known to deliver more value to its employees, shareholders, stockholders etc. Finally, the organization needs to brand itself well. Branding would help in attracting the right talent, it would help in getting better projects and clients. There is a saying in India “When a peacock dances in the forest, there is no one to admire”, hence the organizations need to make their good things public so that the right set of people and work is attracted towards the organization.

In the next few posts I would try to cover each of the critical factors one by one.

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Posted in: Business