Why is Business Thinking Important for Techies, Entrepreneurs & Leaders
(and their employers)?
– Ram V. Iyer
Technology is at the leading edge of progress. It is expected to become a $25 trillion industry globally by 2025.People and businesses are embracing technology and placing big bets by developing and leveraging technologies across the world. The people who develop these technologies are the techies. Most organizations do not leverage the range of capabilities techies bring. Most techies, on the other hand, do not maximize the value they can provide and receive. Along the way, investors and organizations reap the majority of the rewards while most techies get little. This article describes an overview of the issues and how both parties can get more out of the relationship and create more value for customers and humanity.
“People with business thinking add more value and flourish; those without business thinking add less value and often get exploited.”
Technology is not the end unto itself – except for some techies. It is valuable if it meets a need or solves a problem and somebody is willing to pay for it. It has to be considered valuable by those with budgets and money – buyers. That connection between the technology and its use is what determines value. If a techie develops a wonderful technology but fails to connect its usefulness and potential buyers, the value could be low or zero. If both parties agree on the usefulness of the technology, you could fetch a high value AND have happy buyers and sellers. People with business thinking add more value and flourish (and so do their employers), those without business thinking add less value and often get exploited.
Technology may be the future but most techies are not taking advantage of this – and neither are most organizations.
Conventional wisdom may be easy to understand and comforting, but is often wrong. Both techies and their employers work together in outdated and siloed ways. For example, techies often hear, “Do a good job and your boss/company/client will reward you.” That encourages people to focus only on personal performance and the technology, often ignoring the needs of stakeholders and rewards obtainable from them. Most techies lack business thinking and few practice it. As a result, most techies do not reap the benefits of their contributions in the form of greater compensation, promotions, recognition or responsibilities.
Conventional ways of doing things are often the cause of many problems.
Employers, on the other hand, have traditional expectations of techies masked under the headline, “This is what I want you to do.” Unless both techies and employers become aware of this problem and fix it, each of them will get less value out of the relationship, one that can be more rewarding for both of them.
We human beings are driven by our desire to get what we want, and constantly seek the easiest and quickest ways to achieve our ends. We focus on what we want or should get, but don’t necessarily think about the other person (who is also looking out for himself or herself). You may want better compensation or recognition as a techie, but your employer or client on the giving side is looking for more value from you too. Business, after all, is an exchange of value between two parties and one of the parties pays money to the other party for the value received.
Few things motivate a person like self-interest.
f you want to become good at business, you must become good at business thinking – developing and practicing a method to have regular internal conversations with yourself about various aspects of business.
Many people have difficulty thinking about business, or at the very least thinking about it consistently. If you are a techie, you may be thinking about technology and not business; if you are a marketer, you may be thinking about marketing and not about business; if you are focused on recreation, you may be thinking about the weekend and not business. If you are interested in succeeding in business, you must develop and constantly practice business thinking. But what are the right areas to think about and what are the right questions to ask yourself?
For example, in any business venture, there is an exchange of value between two parties. One party may provide a product, service or solution and the other party pays for it with money. Each party receives and provides value. Those who focus only on providing value but not getting adequate compensation for it, end up as suckers, generally exploited for their ignorance or naivete; those who focus only on receiving value are ‘thieves’, either lose customers or have ‘one success and are done’. For sustained business success, the transaction must exchange equivalent value between both parties in every transaction. If you go look at long-lasting business relationships in any part of the world, each of the two parties in the transaction believes that he/she is receiving adequately compensated for the value provided.
We human beings are driven by our desire to get what we want, and constantly seek the easiest and quickest ways to achieve our ends. We also focus on what we want or should get, but don’t necessarily think about the other person (who is also looking out for himself or herself). You may want better compensation or recognition as an entrepreneur, but your client on the buyer side is looking for more value from you too. Business, after all, is an exchange of value between two parties and one of the parties pays money to the other party for the value received. We often forget that. Instead, many entrepreneurs spend their time following the herd to raise more money, developing better technology and recruiting a more stellar team. While those are important elements for success, the fundamental requirement is consistent business thinking.
“Conventional ways of doing things are often the cause of many problems because they overlook the business thinking required for success.”
Business thinking is the deliberate consideration of the various stakeholders, their needs and problems, and the value exchanged between the parties in a business transaction.
How many techies do you know who think about the business implications of the technology they are developing or working with? How many of them know who the customer is and have customer concurrence of the problem and the proposed solution?
- Techies are engrossed in the technology and often fail to consider whether it benefits either the organization or themselves. The person who rewards the techie for creating the value with technology is often not known to the techie, and even if known, not engaged by them.
- In order to create or leverage technologies that are considered valuable to the end user, techies need to know who the end user is, ask them about their need and problem (often different) before devising a solution, and obtain customer acceptance when the solution is completed and implemented.
- Other techies work on the technology and expect their bosses, customers or stakeholders who are in a position to recognize their contribution to acknowledge them, give them a promotion or provide financial compensation – automatically! They often say to themselves, “I am good and others ought to see it and reward me for it.” They may be diamonds, but are lost among a world of noisy haystacks. It is up to the techies to surface the diamonds and bring themselves to the attention of stakeholders who can compensate them.
These are some examples of work situations in which techies can enhance their value by linking their actions with business benefits.
Have you noticed that some techies are more highly valued, get better projects and promotions, and bigger salaries than others? Besides technical competency, many of these techies are better at business thinking. They think, act, and work on technology with clarity about the business benefits to their organization and themselves – and reap bigger rewards for themselves and their organizations.
Techie Mindset + Business Thinking = Greater Success
While startups abound in every walk of life and across the world, the heightened interest in technology as the means to push the envelope means that there is an abundance of tech startups, often started by techies. However, for the very reasons why techies neither provide nor receive the most value in established companies, the same is true in startups as well. Many techies who start companies don’t practice business thinking and therefore end up doing less, getting less and often failing. If techies are employed in a startup, they have the same issues as techie employees in established companies.
The typical ways of managing techies is to tell them to focus on the technology. A manager or a person performing a ‘wall function’ – often called business analysts or requirement analysts – will translate the business needs to technology requirements. While this gets the job done, educating the techies about the business needs – of the customers, stakeholders, organization and leaders – can get them thinking creating greater business value. The extra effort in getting the techies to develop and regularly practice business thinking will benefit the organization and the other stakeholders.
Business thinking techies are more valuable than pure techies.
Alignment & transformation
Misalignment and failed transformation efforts often result when techies and management have different priorities. If the techies are trained and encouraged to regularly practice business thinking and the organization regularly pushes the business requirements to the techies, you will have better alignment between the performance of the tech groups and the business objectives of the organization, leading to greater success. Organizations have been trying to do this for decades but have one basic problem – they seem to constantly talk past each other in two different languages. If they had a tool that provided a common basis for both of them to converse with each other, each of them would benefit and so with the organization, the customers and other stakeholders.
Business Thinking Canvas
We have developed the business thinking canvas, a thinking and communication tool which, on a single sheet of paper, identifies the stakeholders and captures the business value chain of a task or transaction – starting with the customer who has the need and end with an individual working on the project. It asks 16 thought-provoking questions, each important to the practice of business thinking which results in an exchange of the greatest value to parties in the transaction. The canvas can be used by anybody who wants to provide a product, service or solution in return for compensation.
The techies know the answers to some of the questions while customers, partners, suppliers and others in the organization know answers to others. The canvas enables you to figure out the unique value you can provide that aligns with needs or problems of customers who are paying for it. Many people fail to consider or act on the many steps between determining personal value and receiving compensation, resulting in failure or limited business success.
The Business Thinking Canvas addresses the self-interest of each individual and aligns the individual’s interest with that of other key stakeholders (including the organization). I have also identified the ‘downside’ of not doing each of those steps (blocks on the canvas) – the ones that lead to failure; and, the mindset (beliefs, rules, principles, self-talk) that will be useful for each of the 16 blocks on the canvas.
It may sound simple but most people often forget that success is an AND function – it requires many things to be done correctly. Failure, on the other hand, is an OR function – you miss or fail one step and you could end up with limited success or failure.
Businesses need to become adept at identifying, engaging, and discussing the value chain with the various stakeholders to obtain the required business outcomes, while also maximizing the value provided and received by each of them. The business thinking canvas is a simple and effective tool to facilitate this dialog between people across departmental, organizational and national boundaries across the world.
“The business thinking canvas is a tool which provides a common language for stakeholders to communicate with each other, benefiting everybody.”
Everybody Can Benefit
Techies and their employers or clients have tremendous information asymmetry. Techies know the most about technology, while business leaders and/or clients know the market and control the compensation. Since most techies do not practice business thinking, they are often at a disadvantage when it comes to getting compensated or better leveraging technology for market needs. If employers and clients made techies more aware about the business side of things, they could get more from the techies. The business thinking canvas makes techies, their employers and clients more informed and productive resulting in greater value – provided and received – by all parties.
Ways to use the Business Thinking Canvas
Techies can fill out one canvas for each project he/she is working on. Each of them will provide clarity about who the various stakeholders are and how value can be exchanged with each of them. If you are working on three projects, you will have three of these canvases. Completing the canvas requires each individual to identify the various stakeholders and engage them in a dialog about how best to provide and receive value.
If you have a group of people working on a project or initiative, the same tool can be used to map the needs of the customer, internal in this case, to the individual. A series of completed canvases will roll up to the head of the project or initiative. It will be easy for the project leader to check if the team members will collectively meet the various needs of the project.
If you are a techie or a leader of techies in your organization and want to improve your organization, both individual performance and organizational alignment, please reach out to me.
I’m a techie with a business degree and experience in two Fortune 100 companies, as a VC in Silicon Valley and from starting five companies. My struggles and failures led me to identify ‘business thinking’ as the missing component for success in business.
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