Making a case for a technology initiative with Smartum’s CTO

“The CTO vs Standing Quo” collection is about drawing consideration to all of the methods by which CTOs problem the present state of affairs within the firm to push the enterprise in the direction of new heights … or to put it aside from doom. 

Learn how to make a enterprise case for a brand new tech initiative to the board?

One approach to problem the established order is to champion a brand new tech initiative, like a platform migration or AI. We’re speaking about it to Mika Peuralahti, CTO of Smartum. Get practice-shaped CTO insights about:

• Greatest practices of speaking to the board and workforce about new tech initiatives.
• The method for making a enterprise case.
• Now vs then – did the current international financial disaster change the entire recreation?

About Mika Peuralahti

Making a case for a tech initiative with Smartum’s Mika Peuralahti

Jakub Piłucki: Hello Mika. It took some time for us to lastly meet, however you have been busy in any case. I may need heard that you simply’ve obtained your self one thing very nice from the Tampere Chamber of Commerce. What’s it about?

Certainly, it’s been a busy interval. Along with my day job, I additionally sit on the board of a software program consultancy agency, managing round 60 builders.

Being a board member comes with a steep studying curve—you need to familiarize your self with a myriad of recent issues, together with authorized duties and acquire an in-depth understanding of written contracts.

That’s precisely what the course from the Tampere Chamber of Commerce lined. It’s structured to activate and develop board work, benefiting each seasoned board members and people who are simply contemplating moving into such a task. It’s not solely in regards to the legalities but additionally about honing strategic management abilities.

The lectures and case research from the Licensed Board Member (CBM) program have been notably enriching, providing substantial help in my present day-to-day function as a CTO and in my contributions to the manager workforce’s efforts in steering the corporate.

Tech initiatives within the post-COVID period

There was a time when to promote an thought in a company, all you wanted to do was inform a very good story. Everybody wished to develop rapidly. Then the post-COVID financial disaster hit and all of a sudden everybody wished to pivot, cut back, save what that they had. You joined Smartum within the COVID-obsessed 2021. Inform me the way you skilled this era.

Sure, I joined proper in the course of the pandemic. Actually, many companies have been reducing prices.

Smartum is in the advantages enterprise. Firms usually buy advantages for his or her staff originally of a 12 months. The January of 2021 was fairly good as a result of the COVID craze lessened. However then it got here again in full pressure within the autumn so we have been sort of fearful in regards to the 12 months 2022.

We determined earlier that to proceed our development, we have to begin specializing in buyer wants, on fixing actual issues they’ve, as a substitute of doing every part.

So that you centered on long-term methods that would profit you probably a while sooner or later, however then you definitely switched to extra short-time goals? 

You may say that. Earlier than COVID, we centered on promoting advantages to the employers. Throughout the pandemic, many venues closed their doorways. Sports activities advantages aren’t helpful when sports activities amenities are closed. The identical goes for cultural advantages when you possibly can now not go to the theater or cinema. 

We needed to concentrate on the worker facet and assume how to make sure that they’ll really use the advantages. We didn’t wish to present them with one thing they couldn’t use.

We determined to focus fully on this subject.

So it’s all in regards to the worth then. From what I can inform, you appear to place a variety of emphasis on enterprise income personally. I ponder to what extent creating worth for the person is well translatable into income. A number of corporations are investing in what’s referred to as RevOps – whole alignment of all departments for the sake of producing income and holding everybody accountable for it. What do you consider that strategy?

Once I joined Smartum, there was a enterprise unit after which there was a know-how unit – they have been separated. The enterprise unit ordered options and we constructed them. However we didn’t have any clue whether or not this explicit function was value constructing or not. To alter that, I got here up with an initiative to create end-to-end groups.

When you may have end-to-end groups it signifies that the workforce could make choices by itself. It allowed me to eliminate this entire “function issue”. 

As an alternative, we gave every workforce a enterprise supervisor who calculates the income of the present product.

Then we removed all of the roadmaps. As a result of I hate roadmaps. They often speak about options and set a date for every function to come back out. I don’t consider on this strategy in any respect. I consider in issues.

We uncover an issue and we attempt to estimate how a lot income fixing this downside may convey us. Then, we prioritize the issues and start engaged on them beginning with probably the most important ones.

I wish to know what number of prospects we get once we resolve a given subject and why this is a matter to be used within the first place. Solely then we will begin desirous about options and duties. And as soon as we’re completed, we analyze if the brand new launch introduced us the income we deliberate.

So that you’ve created a sort of precedence listing first. After which attempt to sort out probably the most painful points.

Completely. We had this intensive backlog filled with options, and but usually there wasn’t a transparent understanding of what we aimed to attain with each. As a CTO, it turned more and more necessary for me to understand what we have been really delivering to our prospects. 

Beforehand, our backlog tended to be only a assortment of options. I bear in mind questioning the workforce, ‘Why are we engaged on this function, like a “blue button”?’ The fast reply can be, ‘As a result of that’s what the shopper needs.’

However delving deeper with the workforce and questioning why the shopper wished that blue button, we found it was to streamline their course of, say for distributing advantages.

Upon additional probing into why the advantages distribution wanted simplification, we’d uncover an issue that would result in a totally totally different answer than simply including a ‘blue button.’ It would even end in eradicating all buttons from the interface, thereby addressing the shopper’s unique subject extra successfully.

This perception led us to a paradigm shift. We began practising and creating a mindset the place our backlog needs to be extra about issues and alternatives relatively than options. This manner, the answer may very well be something that evolves because the workforce picks up the issue from the backlog.

Now, we drive our improvement with a prioritized listing of alternatives and issues, specializing in the worth every answer brings to our prospects and to our enterprise when that downside is solved.

So principally you reverse-engineered the entire feature-making course of?

I used to be eager on the concept that builders and improvement groups needs to be those to conceive options that greatest match an answer for a given downside, given their experience on this area.

We keep that the understanding of the shopper’s points ought to come from the shopper interface and the enterprise facet – these are important insights we will’t overlook.

It’s important to carry onto the precept that we’re striving to grasp the issue completely and extract it from the enterprise builders, guaranteeing that the answer we create will not be solely technically sound but additionally successfully resolves buyer points.

Greatest practices of creating a enterprise case

To push any initiative ahead, you want the buy-in of the board. How a lot of this help will depend on the pitch itself and the way a lot on sluggish and regular relationship constructing with the board?

We aimed to additional improve our product improvement, which was additionally a directive from the corporate’s board. In our case, it wasn’t troublesome to justify the necessity for modifications to the board, because the effectivity features from the modifications have been simply measurable.

We additionally started to concentrate on measuring the worth created for the shopper in product improvement and the extent to which this worth creation was mirrored in our enterprise development.

Our focus has shifted away from merely implementing options. As an alternative, we’re centering on measuring the worth generated and its impression on our enterprise.

Is there ever a scenario although the place you wish to implement one thing particular no matter whether or not you possibly can measure the enterprise impression?

We’re considering the event of a brand new cell app. However is the brand new app really going to be higher? How can we decide that? Generally the reply may be subjective, prefer it has a greater look. Nevertheless, is our subject actually in regards to the app wanting unattractive, or is there a deeper downside with the present app?

Typically, if the choice to revamp relies solely on a subjective feeling, we find yourself merely replicating the outdated app with a special appear and feel, inadvertently preserving its points as a result of we haven’t absolutely grasped what we really wish to enhance.

It’s essential that after we perceive what must be enhanced, we set clear, measurable targets and confirm them concurrently as the brand new app is developed.

There all the time should be an excellent cause for doing something, particularly one thing huge. The purpose of a product improve is to generate extra buyer worth and thru that, it impacts positively for income. If that’s the case, it is best to do it.

How do you foster a tradition that enables for each totally different opinions and discovering a standard floor throughout the board and the entire firm?

I believe that my whole strategy that I described could be very open to innovation. We do have some long-term strategic targets. Let’s say we wish to get to the highest 10 largest employers by a sure date. After which the query is what issues hold us from getting there. 

Then, we go to our workforce and current it as a problem. And you’ll give you any thought you need so long as you assume you should use it to face this problem and measure it. If the numbers say it doesn’t work, it is best to cease what you’re doing straight away. So the workforce doesn’t have to ask for any permission so long as they’ll measure their work.

Now we have very extremely motivated builders now that the function issue is gone. They develop into extra considering innovating. They implement small modifications of their work and observe the consequences. They should analyze the change and why it was constructive in order that they’ll try this once more sooner or later.

Smartum presents itself because the supplier of well-being to companies and their staff. How necessary is that this open alternate of recent initiatives to the well-being of your individuals?

It’s crucial, inside sure limits, just like the know-how stack, which must be unified throughout all groups in order that we don’t find yourself with an enormous mess. However with regards to concepts, options, ideas, they’ve a variety of freedom and we wish them to have enjoyable with it.

We all know how Smartum’s IT pushes new initiatives ahead. Is there one thing CTOs or their groups ought to NOT do when coping with new tech initiative concepts?

By no means make enjoyable of a coworker’s thought. There are actually no silly concepts. Some simply want refinement.

However that doesn’t imply you shouldn’t have conflicts. Conflicts are good.

Do you may have any?

Sure. Conflicts, the way in which I consider them, are wholesome. When you may have a brand new thought, it is best to have a dialogue about it.

You shouldn’t be frightened of a battle, as a result of this can be a nice approach to validate the concept. If the concept is acquired nicely, it should discover its allies. Whether it is flawed, you’ll get new insights.

However when one is allowed to push an thought with out dealing with a battle, one can discover out too late that the workforce doesn’t really feel it. They hold it inside. And whenever you hit the wall, they might be like: “ha, I knew it!”.

If everybody takes half within the possession of the concept from the start, they are going to be extra motivated and really feel higher about it.

However what in case you are unsuitable? What if the initiative doesn’t work out? Neglect and transfer on? Personal the failure? How can a CTO hold his status intact within the face of defeat?

I wish to perceive why I used to be unsuitable. What I missed and what new issues I realized. So principally I wish to stroll by way of it, so we will all study from it.

And the identical is true for fulfillment as nicely. Even when we succeed, we have to discuss it by way of, analyze it, perceive why we succeeded and study from it. In any other case, the success gained’t be simple to repeat.

For me, evidently the CTO also needs to be answerable for saying: maintain your horses! Say a CTO talked to the lead developer and concluded {that a} huge overhaul of the legacy platform is required. In the event that they don’t do it, it gained’t be scalable. However to somebody non-technical “legacy” or “scalable” could really feel imprecise. What can a CTO do about it?

I solely cease new concepts once I’m not happy with the reply I hear once I ask: how does it relate to our present technique and focus?

If it’s completely out of focus, then it’s not the correct thought in the mean time. We have to hold our present focus. That’s essential. Even when the concept is fascinating, I’m not going to let it undergo if it doesn’t have an effect on the numbers we go for.

Making a case for a tech initiative – the method

Let’s say you see an issue inside your group and a technological answer for it. You bought some allies amongst builders and different staff. What’s subsequent? Many CTOs should be questioning if there’s an efficient course of for acquiring buy-in.

So we’ve got OKRs, which make a significant a part of our technique. Now we have tips that inform us what we’re attempting to unravel in the course of the 12 months, however the person groups set totally different goals to assist the technique go on.

Let’s say that this quarter we have been attempting to boost the utilization of a particular profit as a result of solely 50% of the annual goal was met and there are solely months left. We would like it to rise to at the least 90% so the workforce is specializing in that. That’s an instance of a KPI in our firm.

When the unique objective will not be met, the workforce commits to specializing in these metrics within the subsequent interval to make up for it. They’re free to consider what they’ll do within the subsequent quarter to attain the objective. They’ll set KPIs for reaching these supporting goals too.

Congratulations on that as a result of I do know corporations which were attempting to get this strategy of optimizing OKRs for years they usually can’t get it proper. And sometimes, the whole duty is on the board and never the person workforce members.

There are other ways of doing it, that’s for certain. I’ve seen corporations the place the administrators tackle the subject and even usually give you OKRs.

However at our Smartum, we’re simply giving the strategic tips. The groups work on sensible implementations and they’re additionally concerned in determining our targets for the subsequent time period.

Additional studying & assets

Your on a regular basis work is unquestionably an amazing studying expertise in making enterprise circumstances, however I’m certain you additionally get insights from different sources. Which books or on-line content material are you able to suggest?

Yeah, I’ve been studying many books on the themes lined right here. I’m particularly keen on the Lean Startup e-book, this fashion of doing issues. In fact, we don’t observe it to the letter, as a result of the idea solely works one-to-one in an ideal world, however we do attempt to match this lean strategy into our processes.

And concerning this, I additionally need to say – overlook the timeline. I believe it’s a unsuitable query to ask when one thing will probably be completed. The appropriate query is once we ought to begin.

What’s subsequent? 3 actions for CTOs to take

What do you consider the problems-over-features strategy at Smartum as described by its personal CTO? Is it one thing you might be accustomed to or have you ever tried to implement it at your group?

When you’d wish to introduce the problem-focused strategy to improvement:

1. Introduce the problems-over-features strategy by discussing person issues with all your workforce members – ensure to notice all of them down.
2. Kind the issues by their precedence and concentrate on these whose impression you possibly can measure.
3. Choose overarching targets for every interval and democratize your thought era by letting everybody participate in deciding what’s one of the simplest ways to achieve them.

Good luck together with your subsequent know-how initiative!

About Smartum

When you consider worker advantages in Finland, you assume Smartum.

It serves 1,000,000+ customers and leads the way in which by way of selling the well-being of staff and the impression employers may need on that. Smartum collaborated with The Software program Home on a significant digital transformation transfer, which noticed them ditch printed coupons in favor of digital vouchers.