You've probably heard or read about the theory that being a "leader" is different than being a "manager" (a theory I'm sure I've mentioned before, that I emphatically do not believe - afterall, to be good at either, you need a little of both running through your veins - though I'd certainly admit that people do have preferences or affinities towards one or the other).
ANYWAAAAY... Here's a crack at trying to better explain what I think the originators of that theory may have been trying to capture. I've used the word Exec (Executive), but you could easily substitute manager, leader, overlord or any other word that means "person who makes the rules".
Throughout the life of a company, the company needs different kinds of executives. That much is pretty well commonly understood. However, a lot of people think that at one particular stage, you swap in one type of leadership for another, like the leadership that got the company to that stage is somehow no longer required. This manifests itself typically as the "founder ousting" stage.
I suppose in some lines of business this could possibly be true (I wouldn't know), but I don't buy it for software companies. And of course, I will explain...
Software is one of the most creative types of business there is. It gets compared a lot to manufacturing, which I've explained to several folks is not a very good comparison. In manufacturing, there's a relatively little amount of "creation" (design) up front, and a whole pile of effort that follows, pumping bazillions of the widgets out for years on end afterwards. By contrast, in software, the "design" happens right up until you call the thing "finished", and the manufacturing (if there is any at all) is the CD stamping, copying, packaging, etc./whatever. Never mind the fact that you're typically always building something you've never built before and it is by definition, unique.
The reason I say software is so creative (compared to manufacturing), is because in manufacturing, quite literally all of the design is done BEFORE you start the press (assuming you didn't make any huge mistakes). Whereas in software, virtually the whole project IS the design, since you're still finding design conflicts, erroneous assumptions and implementation mistakes until you're finished with Q/A. "Routine development" is an oxymoron. Only once that is done, can you mindlessly stamp out copies in a manufacturing style. (By the way, software direct over the Web is squeezing the last bit of manufacturing out of the software business - it's "creative" product right from the oven and into the customers' hands, no manufacturing required.)
So, in creative businesses, you typically only make it past GO if you've started off with some of those creative-type executives - the ones who have the vision and imagination to come up with new things that capture the hearts of customers, make headlines and get noticed. They do the messy work. They try lots of things, fail a lot, and hopefully come out of the tunnel with something that actually works and people love. The whole process is terribly inefficient and arguably wasteful.
Then one day the company reaches the tipping point, or some measure of critical mass, and people want to switch to "optimization" mode - that mode where the #1 job is to squeeze efficiences and economies of scale into (out of?) the process. The thinking is, "We've got something good here, now lets squeeze every last drop of juice out of it." I think the reason people jump at this is because it is SO hard to come up with something truly creative and valuable to the market that when we do, we latch onto it like grim death and are determined to make the most of it. The creative execs are the ones who come up with cool new shit, and the optimizers figure out how to make it efficient enough to make money from. Again, sometimes a person can have a little of both running through their veins, but the split will usually be 70/30 either way.
The truth is however, that swapping leadership styles is not the answer - augmenting creative leadership with optimization leadership is.
Without realizing that, it becomes a this way OR that way fight between the creatives vs. the optimizers.
A software business needs both. The danger of tossing the creative force in favor of the optimization force is that eventually you will have squeezed the last drop out of your current invention and then will be caught flat-footed with nowhere left to go when it runs out. The optimization and the creative need to be going on in parallel, so that when one product/feature/idea runs its course, you've already proven the next idea and can begin optimizing that one (optimizing == learning to turn more bucks).
It could be that the reason so many companies over focus on optimization of their current product lines and lose sight of the true innovation that got them there is that optimization is easier and way less risky (however, it also has a lower return/reward). Optimization typically means making a zillion little changes that each add another penny of margin to each sale. If a few optimizations fail, no biggy, a bunch of them will likely succeed too, and therefor the bottom line will still ultimately improve.
Creation however, typically means bigger projects with more risk and up front investment. They're scary because if they fail, you've wasted your time and money. Ever realize sometimes at how you gravitate towards knocking off 20 or so little items from your to-do list instead of tackling one big one? Same idea - it feels more like progress to knock of 20 items than 1.
In a perfect world, when the time comes, companies would realize they need to figure out a structure where the creatives can do their job without being micromanaged by the optimizers, and the optimizers need to be insulated from the (process) chaos that the creatives typically live in.
Here's an example. The folks at DELL must love me.
DELL's "product" is its process. DELL became fabulously successful by innovating in how PC's were ordered and delivered, custom built, in the "made to order" way. They don't manufacture per se, they assemble. They don't invent products. They just take orders, buy the parts, have the parts assembled, and have the boxes shipped out to the customer.
I'm not sure if the creatives are still with the company, but the company has clearly switched purely into optimization mode over the last few years and has not continued to innovate. They've squeezed every penny out of the process of shipping mail-order PC's, and I predict will now be caught flat footed as every other PC vendor copies DELL's proven process, but has better quality products as well. DELL's only leg to stand on currently, is price. This is what happens when you give up the creative in favor (wholly) of optimization - your advantage only lasts so long. Worse, in DELL's case, if they start playing around with their products to increase the quality or innovation in them, they'll lose their price advantage and be nothing special at all. Where is their latest innovation that is going to keep them ahead of the army of copy-cats?
Don't trade your creatives for optimizers. Add optimizers to the team instead. The tricky part is figuring out the lines of communication and more importantly authority, between the two. A lot of companies try, but end up creating a patronizing CTO role that has no direct reports, no budget, and has no choice but to try to inject stuff into an optimizer's process (which the optimizer will fight like hell to avoid) and a battle ensues. If you're going to give innovation more than just lip-service, you need to staff for it, budget for it, and treat it like the future lifeblood of your company that it is. But never ever give it up.
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