How to scale if nothing is for free

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HOW TO SCALE IF NOTHING IS FOR FREE

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ANDRÉ NEUBAUER - CTO 2 „Technology enthusiast, org development fanatic and strong advocate on modern leadership. Motivated by 'Y'! Love to work as CTO for @Misterspex“ @devpg

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EVOLUTIONARY THEORY FOR COMPANIES How to scale if nothing is for free

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EVOLUTIONARY THEORY FOR COMPANIES How to scale if nothing is for free „Pioneers, Settlers, Town Planner“ by Simon Wardley Link: http://blog.gardeviance.org/2015/03/on-pioneers-settlers-town-planners-and.html

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SCALABILITY IS THE FOUNDATION OF GROWING A BUSINESS How to scale if nothing is for free Economies of scale „Scalability is the capability of a system, network, or process to handle a growing amount of work, or its potential to be enlarged in order to accommodate that growth.“ https://en.wikipedia.org/wiki/Scalability

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SCALING IN THE „INDUSTRIAL AGE“

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ASSEMBLY-LINE WORK

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„The Principles of Scientific Managment“ Mister Spex Company Profile, Status Mai 2016 FREDERICK WINSLOW TAYLOR

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•  Repetitive work •  Separation of thought from action •  Standardisation of tasks •  Scaling by repeating without thinking Mister Spex Company Profile, Status Mai 2016 ASSEMBLY-LINE WORK

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STEAM ENGINE

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STEAM ENGINE •  One of the most important technologies of the Industrial Revolution •  Enabled faster production •  Replaced staff from heavy physical work

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Mister Spex Company Profile, Status Mai 2016 ECONOMIES OF SCALE

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LEARNINGS •  Scalability (with proportional/ positive effects) is an exception •  Most systems don’t scale (in a meaningful degree) •  Optimize (till you drop) to scale constant •  Change the way of doing things on a different level to achieve disproportionately effects

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WELCOME TO THE „INFORMATION AGE“

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•  Discontinuous change •  Short product life cycles •  Continuous price declines •  Little customer loyalty •  Based on knowledge work INFORMATION AGE

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KNOWLEDGE WORK IS DIFFERENT FROM ASSEMBLY-LINE WORK AND DOESN‘T SCALE CONSTANT •  Requires creativity •  Relies heavily on collaboration between individuals •  Doesn’t repeat itself •  Is unpredictable but emerges over time

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SCALING THE TRADITIONAL WAY AKA. „ADDING MORE CAPACITY“

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COLLABORATION IS HARD TO SCALE

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ECONOMIES OF SCALE

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HOW TO SCALE ANYWAY?!!

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SCALING THE OTHER WAY Economic principle: •  Minimum: Variable input, fixed output (default option ... unfortunately) •  Maximum: Fixed input, variable output Do not ask how much resources you need to make X, but what you can achieve with existing resources. Scaling does not necessarily mean adding more resources. You can also just use the existing resources more efficiently.

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10 BEST PRACTICES TO SCALE BEFORE ADDING MORE RESOURCES

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#1: FOCUS, FOCUS, FOCUS!

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•  Strive for throughput rather than (local) utilization (Culture of done) •  Don‘t worry about things that don‘t belong to your value proposition •  Use external services/ support/… •  Decide for (de-facto) standards •  Focus on what moves the needle/ makes the difference #1: FOCUS, FOCUS, FOCUS!

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#2: CUT PROJECTS!

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•  Most projects are “black hole projects” •  Overloaded with features •  Consider maintenance! #2: CUT PROJECTS!

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#3: ESTABLISH BUSINESS REVIEWS!

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•  Compare expectations with actual impact •  Understand deeply what drives success an what causes costs •  Derive lessons learned and apply them to the next projects #3: ESTABLISH BUSINESS REVIEWS!

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#4: (N)ONE PROCESS TO RULE THEM ALL!

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•  Conway’s law for processes —> You will run projects that match the process but not necessarily your needs. •  Don’t underestimate costs of process! •  Different processes for different project •  Focus on impact rather than utilisation #4: (N)ONE PROCESS TO RULE THEM ALL!

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#5: ORGANIZE FOR COMPLEXITY!

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“You already have the right people. You have a bad organisation” Niels Pflaeging •  Take cross-functional, self-organized and market-driven teams into account #5: ORGANIZE FOR COMPLEXITY! http://www.slideshare.net/npflaeging/organize-for-complexity- keynote-by-niels-pflaeging-at-spark-the-change-torontoca/15 http://www.slideshare.net/npflaeging/organize-for-complexity- keynote-by-niels-pflaeging-at-spark-the-change-torontoca/16

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#6: DON’T MIX UP INNOVATION WITH DAILY WORK!

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•  Distingush between cash cow and the rising star of tomorrow •  Have separate standards (regarding sustainability, etc.) #6: DON’T MIX UP INNOVATION WITH DAILY WORK!

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#7: RETHINK “THE RIGHT TOOL”!

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•  Strive for small technology stack, don’t increase accidentally •  Stay with what you can do aka. “Schuster bleibt bei deinen Leisten” •  Create space for “experiments” #7: RETHINK “THE RIGHT TOOL”!

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#8: KEEP IT STUPID SIMPLE! “Complexity is your enemy. Any fool can make something complicated. It is hard to keep things simple.” Sir Richard Branson

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•  … not only on software level but solution level •  Business is complex enough •  “Indeed, the ratio of time spent reading versus writing is well over 10 to 1. We are constantly reading old code as part of the effort to write new code. [… Therefore,] making it easy to read makes it easier to write.” Robert C. Martin #8: KEEP IT STUPID SIMPLE!

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#9: KNOW YOUR COST DRIVER!

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•  Important for capacity planning •  Distingush between fixed, variable and stepped-fixed costs •  Stepped-fixed: Fixed over a certain range; at particular point, step increase in fixed cost #9: KNOW YOUR COST DRIVER!

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#10: CONSIDER MAINTENANCE & LIVE THE LIFECYCLE! https://www.researchgate.net/figure/236189469_fig1_Development-of-Software-maintenance-costs-as-percentage-of-total-cost-Floris-and-Harald

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•  Quality and automation are not negotiable (in core business) •  Effort for maintenance will eat up capacity •  Maintenance shouldn’t be the reason for scaling •  Plan removal of features like new projects #10: CONSIDER MAINTENANCE & LIVE THE LIFECYCLE!

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LONG STORY SHORT ... •  Just adding more resources doesn‘t work in a knowledge work environment ... At least not in a proper way •  Give maximum principle at try and rethink way of working continuously •  Optimize till you drop before considering additional resources

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THANKS! ANY QUESTIONS? How to scale if nothing is for free