Commercial thinking and action

11-11-2014 by Sebastian Schürmann

This blogpost begins with a little story. I once (think years not months) worked as a coach for company and we sat in one of the meetings held in regular intervals with the Management to discuss impediments to the process and in general product development. Suddenly in a little more heated part of the discussion, one of the managers said:

In this case, the developers have to apply some commercial thinking.

I am not surprised hearing this demand by management oriented positions. I was sitting in the same boat when I had a team-lead position in another company. Two factors were contributing to the success of this other team heavily (besides the super awesome group of people, a goal and an environment to thrive): A good connection to the CFO with some mutual respect and his constant demand to apply commercial thinking (german: kaufmännisches Denken).

Back to the meeting. I was not prepared to the reactions when I posed a question to everyone attending:

Hmmm. Who in this room had some form of formal commercial education?

You would expect that some top management positions (except the CFO who was not a part of this meeting) in a company would have picked up this kind of education along the lines. Long story short: None of the managers attending had any formal and practical education and experience with accounting, amortization. This was not the first time I made this observation. Very often business and software development are different “departments” and areas of operation.

Theory and practice

These things are often not really included in the timetables of Universities as much as the demands for this kind of knowledge arise later. And then there is the practical application of this knowledge as well: A lot of this knowhow is heavily counter intuitive. You must apply it for a certain time to get a feeling for it. In my first line of work, somewhere back in the 90ies, I had the luck to start off with a not so ordinary line of work as a forwarding merchant. As hard as it was being the apprentice of a prussian merchant in its truest sense, his constant demand for high-quality and business wise reasonable the 3 years brought me to a point where I took something away that I could apply some years later when I started to develop software: commercial thinking and acting.

For a long time I did not realize how much of an advantage this is, especially when it comes to leadership and servant leadership positions. The commercial world and thus software development has some rules that apply a little bit like physics. You can try to break them, but you will not be successful.

Misinterpretations, fads and “here be dragons”

I will start a new series in this blog about basic principles that are standing behind every business and put these into the context software development and the team effort to create products. I will be putting aside trendy things like “Service Design Thinking” or “Lean Startup” as well as the latest trends “Agile Development” as first point of view. I am not implying these are bad in this context but I will try to start off with the angle of commercial thinking to get to a point where we can revisit some of the actual ideas of agile and product development and put them into context. The following topics seem to be interesting.

  • Economic feasabillity
  • Effective & efficient
  • Cost value ratio
  • Economic feasibility
  • Investment vs. cost
  • The CFO and why he is a good ally for software teams
  • Types of cost
  • Long vs. short term thinking
  • Economies of scale

However, this is just a rough list. I would be interested in other input as well. The agile community seems to be pretty active here as well and most methods I came across had a commercial background to it. Interpreted and applied correctly these effects kick in relatively easy and once you know what to look out for it gets pretty simple to grasp what works and what not. I am certain (product-)development teams can draw some practical knowledge from this and find out the CFO is not as a grumpy man as it may seem very often.

Upcoming Workshops

Pairprogramming Workshop

comments powered by Disqus