Pod Almighty: The Best Model for Innovation in Custom Business Software

Custom business software can be a game-changer, but you must approach this undertaking with innovation in mind. Instead of wasting time and energy while falling victim to scope creep, carefully consider your needs versus your wants. Here are some pointers for companies that might want to take a pod-based approach to software development.

It’s an excellent time for custom business software: This May, GoodFirms published its list of the top business software companies in the world. Specialized applications (e.g., custom accounting software) represent a huge opportunity, and custom software is predicted to reach new levels of industry penetration over the next five years. Custom business software represents a growing opportunity — one that your company should try to seize.

To approach this opportunity effectively, pinpoint the essentials. You can’t be profitable spending resources on fluff. That probably seems obvious, but companies often develop custom business software without a strategy in place to clarify what’s necessary and what isn’t. The correct approach also avoids common pitfalls such as scope creep, which can quickly bloat your features beyond your needs.

Needs vs. Wants (Make This List!)

Your strategy should begin with a list of features in two categories: needs versus wants. Be honest with yourself and ask, “Does your software really need this?” If not, then move that feature into the “wants” category. By focusing on building out the needs of your software, you can be on the fast track to a first release product (FRP), the initial step in forging successful custom business software and launching a scalable investment.

An FRP approach is generally quite effective for software development, but it’s even more useful when crafting custom business software because your product doesn’t have to appeal to all customers — just yours! This means you can ignore many corner cases and focus on what matters to your specific use cases.

Getting This Right Is Not Optional — It’s Mission Critical

When custom software development businesses fail to innovate, they face threats to their sustainability: Atrophy, stagnation, and decay. That’s incompatible with an industry in which R&D spending has grown over the past 20 years.

All too often in this business ecosystem, innovation winds up concentrated in the firms that perform the best. While the largest companies command vast R&D budgets and stable (or predictable) revenues that can absorb the impact of failures, smaller companies cannot shoulder that same risk. Those companies have to look for creative new ways to drive innovation, often leaving industry disruption in their wake. The situation is often most challenging for midsize companies that lack the big budgets of the largest firms and the nimbleness of startups.

This reality puts an extra onus on companies to ensure they are innovating with business growth in mind. At this point, delivering any piece of custom software — from robust platforms to small applications that ameliorate specific pain points — necessitates operational change. That change will be driven by gains in efficiency, new revenue streams, or the delivery of actionable insights. But it leaves open the exact structure that is most suitable to address these needs.

Pod Be With You

The best way to achieve organizational change while driving innovation for software is a business within a business, or BWB, model.

Why? A BWB approach encourages everyone to think like an entrepreneur. Rather than being a cog in the machine, each person is responsible for strategic execution. Everyone converts strategy to tactics and is responsible for delivering results.

When applying the BWB model to custom business software development, I favor a new business paradigm that accounts for these needs: the “podular” organization, which was created by author Dave Gray. Gray describes a pod as a “small, autonomous unit that is enabled and empowered to deliver the things that customers value.”

Pods can effectively respond to customer needs, avoid risk, and take advantage of opportunities while allowing for a distribution of control. The end result? Swift decision-making tightly aligned with customer needs.

Principles for a Podular Approach

To introduce a podular approach to your innovation for custom business software development, keep these three principles in mind:

Trust the process. Enabling and empowering the pod to demonstrate value is key to its success. It forces accountability, but it also fosters a sense of ownership.

This creates an entrepreneurial environment embedded within your company that takes the best of startup culture and merges it with the sober risk-avoidance culture of an established business.

Spread the wealth. Creating a network of pods, each focused on a feature or piece of functionality, is a recipe for success. If the adage about the “weakest link” is true, you should structure your business in a way that distributes the larger workload across the ecosystem.

If one pod fails, it doesn’t drag down or invalidate the work of the other units. Using pods shouldn’t be a gamble — it’s a robust and failure-resistant approach.

Keep the customer experience top of mind. Demanding creativity and fostering unorthodox thinking within each of your pods is fundamental to everyone’s success. The members of each pod should be visibly responsive to the needs of users or customers.

Innovation is the path to surprise and delight. Always ensure that you’re creating a “podular” environment that rewards and recognizes creativity.

Today’s fast pace of change and competition demands new approaches not only to software innovation but also to organizational architecture. The pod-based approach is your best bet for staying at the forefront of innovation.

Don’t delay implementing this model and empowering every member of your team to think like an entrepreneur. It should result in innovations that will make a world of difference in the years to come.

Written by Ross A. McIntyre.