Robert Howe is an independent management consultant.

19 November

For the last years, I’ve been testing out the postulate that the higher you look inside an organization, the less understanding there is of software. In that time, I’ve encountered a fair amount of confirmation, but mostly based on anecdotes or opinion. Recently, I was involved in a project at a non-Dutch multinational that has provided me with first-hand evidence, not only of the reality of the postulate, but also of its rather shocking scope.

Before we get into the details, it’s probably worth discussing why a lack of understanding of software at executive level is an issue. Simply put, as hardware has become increasingly powerful, cheap and commoditized, it’s software that’s becoming the more significant creator of value. And the thing with software is that it changes the business game. Perhaps the simplest-to-explain example of how software is changing business is the shift from the right-to-own a product to the right-to-use it. Owning a product is a capital expense that implies investment and risk. Using it is an operating cost that comes out of the bottom line. Guess which one most businesses would prefer and, if you guessed rightly, you’ll understand why servitization business models are the next hot potato.

What we’re talking about here, of course, is digitalization in general and Industry 4.0 in particular. You only need to read McKinsey, Deloitte or any of the other manic street preachers of business to realize that every company needs to be playing the digitalization game or they won’t be a company for much longer. But here’s the thing: software is the medium through which digitalization is expressed. If you don’t understand software, you have no hope of coming up with a decent digitalization strategy. And who is it that sets strategy for an organization? Indeed, executive management.

The multinational-who-shall-not-be-named, to which I referred earlier, had got this message, which is a very good thing. They realized that a lack of understanding of software was getting in the way of business. Therefore, they instructed their training department to come up with a course aimed at educating their top 150 executives in software. In keeping with their national stereotype, the training department came up with a course that addressed everything about software and software engineering. I got involved because, together with two colleagues familiar to you from the pages of Bits&Chips, I was asked to review the course. For two days, twelve different instructors presented summaries of the material that they had included in the course, hundreds of slides in fact. I can tell you that, even though little of the material was new to me, at the conclusion of the review my head was fit to burst.

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Our advice to them was straightforward: way too much information, way too much detail. Having paid for this advice, they took it and drastically simplified the content, to a degree that they felt that they’d left out essential information. Then they ran a pilot course for selected executives. In the words of the head of training, the results were disastrous: most of the executives very quickly got lost. When I spoke to him afterwards, he was disconsolate. He kept repeating that he couldn’t believe how little the target audience understood about software and how huge the gap is between what his audience actually knows and what they need to know.

From a Brainport perspective, I take some consolation from the belief that our executives are more au fait with software. But not so much that we’re in a stronger position to lead the way in digitalization. We need to find ways to help our business leaders better understand the nature of the medium of digitalization. If we can, our industry will go from strength to strength.