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The modern CEO – how to lead in Cloud

Reading Time: 7 minutes

This week the Serverless Craic team tackle how to meet a Modern CEOs expectations for Modern Cloud. They look at three aspects: Capability, Speed and Flexibility and how each of those apply to your Engineering and Product Teams.

What does a Modern CEO expect from Modern Cloud?

Dave Anderson  

We’re continuing our series on Modern Cloud. Last time, we gave an intro on Modern Cloud. It was a good conversation on an interesting topic.  I thought it would be interesting to look at a few different personas, or people. The first one, and the most important one is the CEO. What does a CEO expect from Modern Cloud? They want capability from your engineering or IT organisation.  They also want speed. And flexibility. Would you agree with those three high level buckets? I don’t think they care about Lambdas or Kubernetes!

Mike O’Reilly  

No!

Dave Anderson  

It’s good way to really frustrate your CEO if you tell him all about Kubernetes and Lambdas.

Modern Cloud Capability

Mike O’Reilly  

From a Modern CEO level and context those three areas are a good set. In relation to capability, we’re talking about the ability to build out business capabilities and being able to meet demands of the customers.  In previous podcasts, we’ve talked about Wardley Maps and being able to assess where you are, with regards to maturity. Also being able to identify opportunities, look at evolutionary paths, think about new capabilities, but also being able to build. Is that what you’re thinking? 

Mark McCann  

As a Modern CEO, you’re going to have the needs of your customers in your mind.  You’re going to have user groups needs for your company to meet. You look at Modern Cloud and think, how can I rapidly meet the needs of those customers or users? What capabilities does Modern Cloud provide me with? They are looking to Modern Cloud to quickly stand up capabilities to meet those needs.

Mike O’Reilly  

When you’re moving and transitioning to the modern cloud, you have to shake yourself out of building everything from the ground up. Particularly in emerging areas, like machine learning or AI we may own an AML stack or want to go and train our own models. But really, you need to think: ‘is there a service that already does it?’. Could we get it off the shelf?  You need to get yourself into the habit of looking at what exists. A big part of Modern Cloud is aimed at integrating with things that exist. Let’s not build it. Let’s not start way back with nothing and work our way up. Rather, what can we do now? 

Buy, Rent, Build?

Dave Anderson  

It’s the Buy, Rent, Build question! In my experience, Modern CEOs are obsessed with the customer in the business domain that they’re in. They’re very focused on that industry. The healthy question to ask is: ‘why are we building that?’. Why are we building that thing if it doesn’t have anything to do with our core business. There’s a value chain that you can draw.  If you’re a responsible technical lead, you need to think that we don’t need to build some of those things when you can buy or rent.  In the modern cloud, you can rent a lot more because that gives you the ability to change and switch. You have a high rental power. You’re not buying things that you’re locked into, and you’re not building things that you’re locked into.

SaaS capabilities

Mark McCann  

You need to apply a Modern Cloud lens to the ‘software as a service’ capabilities you’re renting, to make sure they’re not built on legacy cloud. We’ve seen lots of so-called SaaS offerings that don’t pay as you go, don’t scale up or down and come with a lot of operational overhead and burden. As we evolve towards modern cloud and a serverless first mindset approach, the SaaS offerings we’re looking to rent need to be assessed to see if they are built on modern cloud principles and practices.

Otherwise, you will tie yourself up into knots with things that will not scale.  If your architecture and solution is fully leveraging modern cloud, is fully serverless with the flexibility and elasticity of scaling up and down, those integration points with SaaS services won’t be able to handle that and you will pay a price later.

Dave Anderson  

I remember a CEO telling a story that compared engineering to a janitor. You just want things to be clean, and you don’t want to see them. But now engineering is a differentiator.  There’s an appreciation that modern cloud can actually drive your business. It’s not just a cost centre. If you have a modern cloud attitude in your company, engineering is actually part of the business. Engineers are not stuck in the IT department. If everything is stuck in the IT department and it is treated like a black box, you might be doing modern cloud, but you’re not getting the commercial benefits from bringing the tech potential to your business leaders.

Mike O’Reilly  

It’s about effectively integrating and being prepared. Cloud Architects become Specialists. 

Modern Cloud and Speed

Dave Anderson  

Everything is integration! The next one is Speed. We’ve talked previously about ‘Time To Value’. It’s not how fast the developer can type in the code. It’s the value stream from an idea to how quickly that makes it into the hands of the customers. That’s not just IT. It’s the whole org from front to back. And obviously, in the modern cloud, you can speed that up.

Mark McCann  

You should be able to go from ideation, discovery and framing through to production and into the hands of a real customer and delivering value in days if not hours.  There’s a nirvana point where you’re having discovery and framing sessions with the business and your end users, and you’re actually showing them real prototypes in real production environments that have been toggled appropriately so that they’re not exposed to the existing customer base. 

The flywheel effect

Dave Anderson  

There is a flywheel effect here!  But if the flywheel gets stuck and you’re spending ages iterating, there’s inertia and stoppage. When you start executing quickly, Product realises they can ask for things quickly. The flywheel starts to turn. And then you get to a point where you can sit and both ideate into production quickly. That’s the nirvana spot as you say, Mark, but you need to prove that you can go fast first, and Modern Cloud helps you to go fast.

Mike O’Reilly  

Modern CEO’s expect their teams to have a high change frequency and be able to do A/B tests in a reliable way that maintains reliability and stability and gives good customer feedback. We talk about ‘slow is smooth and smooth is fast’ ,well architected and the importance of teams that work with a degree of rigour. So we have the mechanisms in place to facilitate moving with speed, safely and productively. CEO’s may not really understand that, but should be invested in an organisation that supports it. And invests in their engineering, their development and in their organisation to be able to think in those terms.

Who are you building for?

Dave Anderson  

As an engineer, you’re not building for the engineering manager. You’re building a product for the company. You need to burst that bubble! If you have an amazing capability, but no one knows about it, you can build stuff quickly. But you’re still stuck in safe trains not going as fast as you can for the customer.

Mike O’Reilly  

There’s a Simon Wardley thread relating to this.  The essence of it is that teams who adopt modern, well architected practices find it easier to learn the business rather than the business trying to learn IT!

Dave Anderson  

That’s fair enough! You don’t hire financial experts to teach you finance.  You make them do finance, when you work with them.  The third item is flexibility. There’s a couple of different ways to think about this: the ability to pivot a line of business or the ability to scale in different ways or different global locations. 

Modern Cloud Flexibility

Mark McCann  

If you leverage modern capabilities, you’re not worrying about a lot of upfront investment. You’re not outlying capital expenditure. Your software features and capabilities are operational expenses. It’s not OpEx versus CapEx. You’re not worried about cost making it hard for you to pivot and change. Because, you’re not betting your credibility on a $50 million data centre that you’ve just purchased, and you have to make it work. You’re able to do ‘safe to fail’ experiments in a rapid fashion, like we talked about with Speed. Your feedback loop is a lot tighter.

If it isn’t working out for the business or if you’re pursuing a value stream or product offering that’s working out, that’s okay because you haven’t sunk millions into it. You can rapidly pivot into something that’s more valuable and may have more impact. You can pivot more efficiently and effectively to find that product/market fit. From a CEO’s point of view, they want to have lots of options and they don’t want to go through one way doors, They want two way doors. So if it doesn’t work out, they can come back out and try something else.

Photo by Hanna Postova on Unsplash.com

Sunk cost fallacy

Dave Anderson  

There’s another aspect to the sunk cost fallacy. With a data centre migration, which is effectively a re-host, moving from a server into straight instances, and you now have legacy cloud, you will have spent a lot of time and effort to stand on that up. So there’s a bubble that forms where you believe that you’re going to spend more for a while but then the spend will go down. But the spend never really goes down. You’re left in a situation a few years after migration, where you’re spending lots of money, but you can’t move fast.

All we’ve got is a fancy data centre, as Gregor Hohpe says. You need to re-architecture or modernize as part of the migration or just after the migration. A lot of people don’t do that. You don’t have the flexibility, because you are stuck in one region or stuck on an old stack.

Mark McCann  

From a people point of view, if you’re moving at speed and leveraging capabilities appropriately, your people are freed up for differentiating work and to work on things that you can pivot towards. They’re not  trying to work their way through lots and lots of different changes.

Implications for Data

Mike O’Reilly  

There’s data implications as well. Organisations that embrace modern cloud are able to leverage data capabilities and expand into new products or ventures or experimentation. They’re not fixated on yesterday’s success. They’ve got their heads on a swivel, looking for that next opportunity.  They’re constantly looking for ways to leverage what they have to penetrate those spaces. It’s a radical target for orgs that embrace successful modern cloud.

Mark McCann  

Not worrying about scale is key.  You don’t know what’s going to take off. If you put lots of experiments out there, something may have the right product/market fit and then have the need to scale massively. If you’ve leveraged modern cloud efficiently you’ve checked limits, made sure portals are set properly and that resources are appropriate for that account. You are good to go. That wouldn’t be the case if you’re on legacy cloud or on premise.

Conclusion

Dave Anderson  

With modern cloud it’s likely you’re event driven, using stream based things and more managed services.  You are not fine tuning at lower levels. You have the elasticity and are event driven to respond to change. That’s very hard to do if you haven’t used modern cloud techniques.

Anyway, that’s the craic. That’s our three expectations of a CEO  for modern cloud: capability, speed and flexibility. I am very interested to hear your feedback.  Our podcast is available on the usual channels.  We’re on TheServerlessEdge.com and @ServerlessEdge on Twitter. Thanks very much.

Transcribed by https://otter.ai

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