Moving Fast Vs. Winning the Race

posted by Dilip on November 29, 2019

In some of my recent client debriefs, especially after their unsuccessful on-site interviews at the Silicon Valley high-tech companies, my clients felt that they did not do a good job responding to the interviewers’ question on what it means for them to move fast. Most responded by showing the interviewer how they would jump on a new opportunity to get to the market before their competitors do and staking a claim for their market leadership. Moving fast for getting to the market first is not always the same as being a category killer (a’la winning the race), which requires different mindset and leadership. 

Examples of companies getting to market first but not dominating the market because of competitors coming later had a better approach are legion. For example, although Disney came to the consumer streaming market first, Netflix now owns that market; although the first electric car was created by Robert Anderson in 1832, Tesla now owns the market by how it has positioned itself in direct-to-consumer and its software and services after it sells its premium hardware. Other such examples are in a recent HBR article

Although the above response my clients gave to the question on how to move fast by jumping on a new opportunity and to be the first to market is literally correct, it is specious in that it disguises a key aspect of how product and services get developed at these companies. It requires double-clicking on what “moving fast” really means and how to make that a cultural norm in any company as a sustainable competitive advantage and a deeply ingrained leadership mindset. 

Moving fast does not always mean being the first mover; rather it means that sufficient attention has been given to make the new product or service successful. This can be because how it is positioned for future growth and its momentum in the market by virtue of how the product or service is supported by innovative business models and by protecting its long-term success. A recent example of how this was done is Apple’s iPod releases and its App Store. The other side of this coin, too, is what price companies pay in “moving fast” (read making haste; more motion, less action) in terms of their long-term difficulties they create for themselves in how they end-up compromising their own wellbeing on many fronts. 

To benefit from the advantage of moving fast, the first and foremost requirement is that the product or the service being developed is fully vetted for its marketability and sustained customer value with increasing customer traction. Although it sounds obvious, many companies that embark on major product and service development initiatives without fully fleshing out plans for their success, often run into a series of predictable setbacks, obstacles, hidden costs, and disappointments, all of which end up with a mounting price they pay as an ineluctable penalty, as mentioned in the previous paragraph. 

Let us look at these penalties one at a time: 

1.Missed opportunities: When a company embarks on the new development initiative by “moving fast,” it often creates an environment of urgency (translation, panic) among the ranks that end up having to execute the initiative. To deal with some deadline, often set arbitrarily by the higher-ups, development teams crash through the planning step—often shortchanging or even avoiding it altogether—and getting right into action to show their alacrity. Without properly fleshing out a product vision and jumping right into action post haste, often results in that vision turning into a nightmare that many companies are forced to deal with by having to write-off expensive development costs, often firing those responsible, and creating a culture of fear because such practices continue project after project. In addition to large sunk costs, this approach results in many lost opportunities.

2.Team Morale: Concomitant with the derailed or cancelled project after executives realize that it was, indeed, a good decision, but executed poorly, they often react in a predictable way. So, instead of dealing with their own leadership blindspots (not spending enough time on the planning part and understanding that getting first to market is not the same as showing market leadership through being a category killer) they find a scapegoat way down in the ranks to blame for their own leadership failure and penalize—even terminate—them. This creates an environment of distrust, fear, and suboptimal team performance. People spend much of their time being defensive and work in a defensive, CYA mode; not conducive to a productive environment.

3.Employee Attrition: An inevitable fallout of the above is when good employees start leaving the team, organization, or even the company. Word soon spreads about the company’s culture through social media and other exchanges and it gets harder and harder for a company to attract top talent to recover their momentum. Thus starts a downward spiral for the company. 

4.Technical Debt: This is yet another penalty many development teams—and companies—pay for rushing to the market (moving fast). In a rush to get a product or service releases on some arbitrary deadline, people are encouraged to take shortcuts. In the process much of the underlying tribal knowledge stays with a few individuals without others having any idea of how things got done. This creates technical debt that keeps piling and as people move around or leave a team that knowledge now goes with them, further creating problems for any chance of success for future development efforts. 

5. Management Debt: In most companies, technical debt results in fires that rage when things break down, products fail critical tests, and customers complain about unmet needs or poor product performance. When these fires rage, much of the management’s time and attention is spent in putting out these fires by re-allocating resources, putting premium on “fire-fighters,” and rewarding them for their heroic efforts, all with a very transactional approach. Very few leaders codify these fires, find their root-cause, and launch a systematic initiative to triage them and eliminate the root-causes. 

This, among other such areas, is the real management work; firefighting is technical work. Technical work ALWAYS preempts management work and that is the problem.  This now creates a culture where technical work (firefighting) preempts management work (making things right for the long term) and as a result creates management debt that piles up but that also remains ignored, unlike the technical debt. Management debt is typically less visible than the technical debt because of its nature. This makes a company even more vulnerable to failure as things further deteriorate with time. 

6.Brand Erosion: Companies that focus on “moving fast” (making haste) often end up having to frequently reassess their efforts and recalibrate because time after time they fail to recognize what thoughtful planning and leadership with flawless execution can do to properly position a product in the market. Half-baked efforts and projects launched in fits-and-starts often cause companies to take a hit on their brand because such setbacks stem from their deep-seated culture of not fully appreciating what “moving fast” really means in terms of proper planning, thoughtful leadership, and flawless execution. 

7. Bottom-line: A company whipsawed by sluggish development velocity because of factors, many of which are mentioned above, poor leadership vision, and its eroding standing in the market now get on a spiral of revenue loss, poor profitability, and continued uncertainty. Constant pressure on its top and bottom lines results in focus on cost cutting, which further erodes team morale. At this stage of collapse it is very difficult for a company to get back on a virtuous cycle to recover itself for a healthy future.

8. Fighting Takeovers: When a company becomes vulnerable on such fronts vulture capitalists and strong players target such companies for acquisitions or mergers. Once that move becomes known much of the company’s management focus become even more short-term to defend its turf and this distraction from top management can further make the company more of a takeover target. This is a vicious cycle and is very difficult from which to extricate oneself. 

9. Panic Decisions: When a company is caught in this death spiral top management often resorts to a gambler mindset. In a panic to save what they can top management often makes rash and thoughtless decisions with the hopes of getting something to work for them, but unfortunately this often does not work, and the company has to end its aspirations to survive and decide it fate.

10. Financial Squeeze: With eroding revenues and non-existent profits companies in this state suffer from financial pressures: lack of new R&D investments, inability to hire badly needed top talent to stem the tide of employee departures, difficulty securing bigger credit lines for recovery, inability to stave-off customers that are becoming increasingly difficult to deal with, among other problems. At this stage the company has crossed its event horizon (Ref. block holes) and is in a one-way death spiral. It finds itself in an increasing difficulty to extricate itself from the claws of inevitable death, either through someone buying it out or by having to go out of business. 

As is clear from this discussion, moving fast and preparing to win a race long-term are not only the same thing, but they are antithetical. The difference comes from how the company’s leadership sees its role and duty in how they carry out their strategic, tactical, and operational duties. This is not an easy task and that is why we see so few category killers in the market and so many me-toos!

Good luck!