Strategic Monoliths and Microservices: Foreword
Mary Poppendieck shares a story about the transformation of the company Iterate and how the book Strategic Monoliths and Microservices is important.
We met the founders of Iterate in April 2007. Three of them had attended our first workshop in Oslo and invited us out to dinner. There, we learned they had just quit their jobs at a consulting firm and founded their own, so they could work in a place they loved using techniques they believed in. I thought to myself, "Good luck with that." After all, they were just a few years out of college and had no experience running a business. But I kept my skepticism to myself as we talked about how to find good customers and negotiate agile contracts.
We visited Iterate many times over the next decade and watched it grow into a successful consulting firm that was routinely listed as one of Norway's best places to work. They had a few dozen consultants and evolved from writing software to coaching companies in Test-Driven Development to helping companies innovate with design sprints. So I should have seen it coming, but when they decided to transform the company in 2016, I was surprised.
We decided to change course, they told us. We want to be a great place to work, where people can reach their full potential, but our best people are limited as consultants. They are always pursuing someone else's dream. We want to create a company where people can follow their own passion and create new companies. We want to nurture startups and fund this with our consulting revenue.
Once again I thought to myself, "Good luck with that." This time I did not keep my skepticism to myself. We talked about the base failure rate of new ventures and the mantra from my 3M days: "Try lots of stuff and keep what works." That's a great motto if you have a lot of time and money, but they had neither. One of the founders was not comfortable with the new approach and left the company. The others did what they had always done—move forward step-by-step and iterate toward their goal.
It was not easy and there were no models to follow. Wary of outside funding, they decided to merge the diametrically opposed business models of consulting and venture funding by limiting to 3% the amount of profit they could make from consulting, pouring the rest back into funding ventures. They had to make sure that consultants did not feel like second-class citizens and those working on new ventures were committed to the success of the consulting business. And they had to learn how to successfully start up new businesses when all they'd ever started was a consulting business.
It's been five years. Every year we visited to brainstorm ideas as the company struggled to make their unique approach work. When the pandemic hit, not only did their consulting business grind to a halt, but the farm-to-restaurant business they had nurtured for three years had no restaurants left to buy local farm goods. But think about it: Iterate had top talent with nothing to do and a venture that was poised to collect and deliver perishable goods. It took two weeks to pivot—they offered the food to consumers for curbside pickup—and the venture took off. While most Oslo consulting firms suffered in 2020, Iterate saw one venture (last-mile delivery) exit through a successful acquisition and three others spin off as separate entities, including a ship-locating system and a three-sided platform for knitters, yarn suppliers, and consumers. As a bonus, Iterate was number 50 on Fast Company's 2020 list of Best Workplaces for Innovators, ahead of Slack and Square and Shopify.
So how did Iterate succeed against all odds? They started by realizing that a consulting approach to software development did not give them the freedom to take a lead role. With software becoming a strategic innovation lever, they felt it was time to claim a seat at the decision-making table. This was scary, because it involved taking responsibility for results—something consultants generally avoid. But they were confident that their experimental approach to solving challenging problems would work for business problems as well as technical problems, so they forged ahead.