“Culture eats strategy for breakfast” is a famous phrase attributed to Peter Drucker, the father of modern business management. I’ve heard and used this phrase many times. To me, it has always had a negative connotation. Old corporate habits can stand in the way of strategic progress. However, I recently had occasion to look into what he actually meant when he made this statement.
As it turns out, my interpretation wasn’t quite right. Mr. Drucker was saying that no matter how great your think your strategy is, it won’t be successful if the culture in your company doesn’t enable and support that strategy. In other words, culture and strategy need to go hand in hand—a very positive statement that can help you shepherd change through your organization.
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I’m drawn to this phrase because National Instruments is always working with companies to implement new test strategies. These strategies are often quite different than these companies’ current testing approaches. They require changes in familiar processes and tools, modifying existing employee practices and behaviors. Without these changes, the strategies can’t succeed. I’ve seen cases where the existing culture is so ingrained that I wonder if they will ever change. That’s the negative, culture-as-impediment view of “culture eats strategy for breakfast.”
The Business Culture
You have to consider many aspects of your company culture in evaluating the role of test in your company. One such aspect is what I’ll call business culture. Historically, product testing has been viewed as a support function during the product development and manufacturing process—just a necessary cost center. This perspective arises because it’s not always clear how test can enhance a company’s business.
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It’s not that companies don’t think test is useful. It’s that they don’t tie an intrinsic business value to it. Hence, many companies invest much more in other areas of “strategic” value such as product development and sales enablement. This investment profile often leaves test organizations fragmented, trying to meet fast-moving business requirements with outdated technologies and test methodologies that often create bottlenecks for their organizations. Yet research has shown that test is critical because it validates a product’s performance, increases quality and reliability, and reduces return rates.
To convey the importance of test to your company’s business, you must be able to understand the economics of test in your organization. Many companies have test organizations with reactive approaches that lack long-term strategy or financial impact metrics. This leads executives to focus on simply reducing the cost of test rather than asking which test investments they need to improve business metrics.
Evaluating the actual impact of test is complicated, involving the ability to understand the total cost of ownership (TCO) as well as the tangible business impact. Activities such as production test standardization and improved test throughput with new technologies can appear to be very expensive when based simply on new capital equipment costs.
We work with companies to understand their actual TCO, including costs for upfront development, deployment, and operations. Similarly, we help them identify how to measure the impact of such investments. The result: an accurate assessment of return on investment (ROI) for strategic test investments. Nothing evolves business culture faster than showing how investment in test can improve the bottom line.
The Engineering Culture
Another area that challenges many test initiatives is what I’ll call engineering culture, where each engineering function tends to operate in its own world with little interaction with one another. Research has revealed that an “optimized” test engineering organization provides a centralized test strategy that spans the product life cycle. It’s also well known that the later in the design process that you find an error, the more expensive it is to fix. A study by NASA, for example, once found that the cost of finding a defect in production was 21 to 78 times more expensive than in design.
The reality in many companies, though, is that there is little continuity through the product life cycle. Products are still thrown over the wall from design to test. Maintenance is an afterthought. It’s often a cultural challenge. Design engineers design, test engineers test. Spanning engineering functions is not easy and requires commitment and focus. Each department has to retain its functional identity while seeing the value in a shared fate with one another.
Philips Healthcare formalized a test tools engineering team and gave it a charter to develop and maintain test software applications and automated test equipment that could be used throughout the development process. This activity evolved to become a cross-functional service organization for both new product design and verification & validation engineers. The team enabled these internal groups to focus on validating their products by developing new test scenarios rather than by developing ad-hoc test systems. Consequently, the team increased productivity by 347% and reduced the company’s cost of quality, saving $4.5 million annually.
A third aspect of company culture you have to consider is its people culture. People are the most important asset in any organization. In the end, your people must accept and execute any significant strategic change. When talking about test, the people I’m talking about are mainly engineers, of course. In a few years, there will be more engineers retiring than entering the workforce. This poses an interesting challenge for test engineering.
Test is largely a learn-on-the-job vocation. It takes time for a new engineer to develop the knowledge of how best to apply test and measurement technologies to evaluate products correctly. Test engineers in many companies are quite experienced, with a long history of developing test expertise based on the systems and technologies they’ve used for years. On the other hand, newer engineers entering the field come with little understanding of test but a desire to take advantage of the latest technologies and the ability to adapt quickly to new ideas.
Adopting new test strategies takes a strong focus on organizational proficiency to address the needs of both the experienced and new engineer. Hiring managers frequently face the challenge of selecting a few potential interviewees from a large selection of qualified candidates, but they often find success in vetting candidates with a heavy emphasis on softer skills such as communication and team-building skills. Though these softer skills are difficult to quantify, managers at best-in-class companies find more success in hiring candidates with a stronger cultural fit than candidates with experience and deeper skill sets. This is not to say that experience is not important because, as I said, test engineering is definitely a learned trade, and real-world experience is important.
A plan for continued learning is essential to making new strategic test initiatives compatible with your people culture. Most individual contributors regularly seek to “sharpen the saw” and improve their skills to stay relevant. Making successful changes in test strategy hinges on your ability to improve the skills of your test engineers. This requires you to retain the important organizational knowledge of your most seasoned engineers while building skills and confidence in new approaches and technologies that are vital to the company.
Test managers with strong training plans have found success using an organizational program called a center of excellence (COE). A COE refers to a team that provides leadership, evangelization, best practices, and training for a focus area. The COE concept leverages observations from other best-in-class companies while incorporating training certifications to help drive multiple levels of core competency.
“Culture eats strategy for breakfast.” When it comes to transforming the role of test as a strategic asset in your company, you should take heed of this simple phrase. Many cultural aspects of your company affect its ability to change. This is particularly true for changes in test strategy because many companies don’t essentially view test as a strategic asset. By focusing on assessing business impact, working to bridge engineering disciplines, and focusing on training and evolving the skills of your test engineers, you can bring greater appreciation of the value of test and ultimately make test a strategic part of your corporate culture.
Mike Santori, vice president of product marketing at National Instruments, leads the organizations that are responsible for planning and marketing core measurements, test systems, embedded systems, and key application segments. He focuses on optimizing the NI product portfolio, leading the definition and management of new products, and ensuring high-quality technical marketing. Since joining NI in 1986, he has worked closely with R&D and marketing to define new products and capabilities for NI software, including NI LabVIEW, NI LabWindows/CVI, NI TestStand, and NI VeriStand, as well as develop marketing strategies for NI’s graphical system design approach. He holds a bachelor’s degree in electrical engineering from Texas A&M University.