Saturday, March 05, 2011

A Problem of Scale and Scope in India

When one talks about growth, more often than not, there are two dimensions that people are really talking about. One is Scale and the other is Scope. Scaling up means doing more of what is being currently done. If you're a manufacturing unit, you create 10 times more of the same part. Scope is a bit trickier. Scope is about the variety of products or services. It is about defining the boundaries and answering what, for whom, when and other such tough questions. For example, it is deciding whether to design the part for a life expectancy of 10 years or 20 years. Or whether it should be launched in one country or many countries; whether it should fit into one particular tool or multiple tools across various industries, and so on and so forth.

Scale is almost synonymous with growth. But the problem with mistaking scale for growth is that it is a horribly narrow view. What I often like to say is that if you lose $2 on every unit, making 100 units will only leave you poorer by $200. And that is certainly no way to grow. It sounds simple enough. And yet, companies fall into this trap all too often.

To understand why that is the case, you have to understand Scope, the poorer cousin of Scale. Where Scale talks about bigger numbers, 'growth' curves that look like the trajectory of a rocket just fired, Scope is hard to pin down. People who talk about scope talk about unpleasant things. They talk using words like 'define', 'focus', or (God forbid!) 'limit' - none of which sound like growth words at all! In fact, one can be forgiven for mistaking 'scope' to be synonymous with 'reduction'. Contrast that with someone who is talking about bigger numbers, more units, support for 10 more file formats, bigger addressable market, entry into a new industry sector; and you can guess who comes out all smiles and triumphant from that meeting room.

If Scope can get an equal hearing alongside its flamboyant, adrenaline-pumping cousin, Scale, it can do wonders to business growth. It is not always obvious how and when Scope puts up its meek hand to speak (and is snubbed) or when Scale rears its ugly head (and everyone regales in its mathematical beauty). Here are some places to watch out for these two things:

1. Are you jumping to calculations too fast in your head? Of course, you always have to run a few numbers. But if number-crunching comes without taking what the numbers say to its logical conclusion, then something is wrong. For example, is setting a higher price for your product after adding a few features the right thing to do? Or is the optimum price that will drive volumes and maximize profit actually lower? Have you considered that? Or here's a really simple one; Are 20 features better than 10? Or a more nuanced one; Is Mac+PC support better than only PC support (2 is better than 1, right?). That last one is actually a scale solution being applied to a scope problem. It is a slippery slope indeed.

2. Does it all 'seem the same' sometimes? When building a screw for a car seems very similar to building one for a truck or a plane, think again! Are they really the same? Or are you looking at the problem through the Scale lens? Is your scope of business the car or the screw? As much as we would like it to be the case, the world is not made up of only the things that are supplied, but also the things that form the demand (and no, they are not the same). This is a topic that gets into marketing, and merits a blog post of its own - perhaps some day in the future.

3. Can something really be done in '10 minutes'? This is my favorite simply because I have seen it happen all of my professional life in one form or the other. The time to do something might be 10 minutes, but there's probably a host of other things that have to be considered before something is actually 'done'. Is it being done the right way or will doing it the 'right' way take not 10 minutes, but 2 days? Or just because it will take 10 minutes to do, does it mean it should be done? When will your team be able to get to it? If the answer is 'after these 10 other things, which will take about a week', there's not much point in saying 10 minutes, is there? The 10 other things actually create a scope problem, and you need a scope solution to arrive at the right number. We in the Indian software industry have been giving dumb 'effort estimates' to our customers for far too long, while they take care of prioritizing things and solving the scope problem. Do we even know a scope problem exists?

4. Is there something 'between the lines' that you are missing? This is a tough one to spot. Was there an implied context to the discussion that has somehow got lost in the last few minutes? If so, was it intentional or was it because the rocket-launching cousin, Scale just decided to take you for a ride? Doing a spot check and bringing the discussion back to its essence is vital before the horses run too far ahead. There should be no shame in doing that. Brainstorming is one thing, but what the writers on the benefits of brainstorming often fail to mention is the rigorous analysis meeting that comes a day later to put things within scope and cut out things that only served to squeeze out the creative juices. Not all meetings can be brainstorming, and thinking that some cool idea that came out of a brainstorming meeting is going to cut it in the real world is, for the lack of a better word, brainless!

Living in India these days is like living on steroids, or at least living amongst people who are high on steroids or drugs or something. Nothing less than 'anything is possible' is a fashionable thing to say. A discussion on touch-screen tablets quickly degenerates into a discussion about augmented reality, and how Google/Apple will bring it 'tomorrow' (Really? It took 30 years for computers to go from mouse to touch). Hiring a CEO for a start-up has become an exercise in finding the person with the biggest Rolodex for maximum lead-gen, and not about someone who can drive the company through a complex maze of tough choices. How many product feature discussions happen in a vacuum purely based on only 'neighboring' features, regardless of what users really want? There's cribbing about why the iPad does not allow phone calls. (Does just having a SIM card make iPad a good candidate for a phone? Or should we leave something out for 2012 also? ;-) Ok, that last bit was pure sarcasm.)

Don't get me wrong, I'm all for the go-get-it attitude. In fact, I love it. But I say we've been the intelligent engineers and number-crunching nerds of the world for far too long. I say we wake up and look around a little now and see what else is needed. And an intelligent discussion on the scope of our capabilities and the scope of everything we're building is definitely high up on the table. A discussion about 'scaling up' is meaningless (nay, dangerous!) without one on 'scoping it'.


Location:Pune,India

3 comments:

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bachelor of science in business administration Columbus, OH said...

That was well explained. Scaling and scoping is different. But some people fail to understand them. Nice. Keep posting.

Education said...

It's really awesome post. I think people should go through it. Thank you for sharing.


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