Internal Architecture

What’s the most important thing in your business? Is it the customers? The staff? Maybe it’s your branding and reputation? Or – as you might expect me to argue – it’s your strategy.

Of course, there’s no single answer to this question. The most important thing changes every day, sometimes every hour. I frequently speak with managers and ask the question a lot: it tells me about their focus and what challenges they’re currently facing. In today’s post, we’re going to discuss something that is vital for your business but rarely gets the attention it deserves: communication.

If there’s one bad habit I’ve observed across a lot of experienced managers, it’s that they get used to making decisions under uncertainty; they don’t have all the information, it’s impossible to know all the available options and the pros/cons of each. So managers learn to hone and trust their instincts and make decisions with whatever limited information they have. But sometimes this leads to a blind spot, where managers often don’t actively seek more information; they act quickly, on what they already know, and move on the next pressing issue. This can mean decisions are less informed than they might otherwise be. 

What I mean by communication is the ability of your business to get information to managers ahead of time so when it comes time for them to make a decision, they are already as informed as they can be. This might sound easy but can be challenging in reality, particularly as your business gets larger and more complex.

For a small business – a pen retailer employing a handful of staff – communication is pretty straightforward. In this environment, everyone is pretty close (both physically and socially): the manager knows where he can get information and the staff know what sort of information they need to pass on. Information flows very easily and the manager is able to make informed decisions.

Contrast that with a large manufacturer – say, Pelikan or Sailor – with separate teams working on design/production and marketing/distribution. For a successful new product, a lot of information has to flow between these teams, inside/outside the company, and up/down the chain. Employees need to know what information is valuable and where it is needed; decision-makers need to know what information is available and where to get it.  

Complicating this is product distribution: brands use distributors (wholesalers), who sell on to retailers and then on to consumers. Customer feedback needs to travel back up that chain; each person it reaches need to know where it should go, so it can reach a decision-maker and usefully influence them. When a business becomes this complicated, it's unrealistic to rely on spontaneous exchange; lines of communication need to be established. 

Having a formal structure for this to occur is what I call the internal architecture of the firm, and it's vital for any business, particularly as the layers between manufacturer and end user increase, or the business' operations become more complicated. Unfortunately, this is something that a lot of businesses overlook. Regular meetings might occur but teams don't understand what's valuable to other teams, or internal politics mean that information doesn't get shared like it should. When this happens, when the architecture is not well-developed, decision makers aren’t informed and it leads to poor decisions – and project failures. It’s hard to imagine the Esterbrook relaunch working out the same way if the manager had good lines of communication with retailers and end users.

The same could be said of the new Stipula Splash, a product I was particularly excited to see. Flex pens aren’t really my thing but I am fascinated by market disruption – and the prospect of a reliable, steel-nibbed flex pen for $69 seemed enormously interesting: How would Noodlers respond? Would other brands look into flex? Perhaps look at gold flex again? It had my attention. The reality was quite different: reviewers were indifferent, the flex certainly didn’t seem to meet expectations.

Although the product was a disappointment, the more troubling issue for me was that Stipula brought a flawed product to market. Either the marketing team failed to let the design know that there was a flaw, or the engineers failed to let marketing know that it wasn’t really meant to flex. And either samples weren’t provided for review or that feedback was ignored. This says a lot about the company, and suggests Stipula has internal problems that they need to address before developing any new products.

On the other side of the ledger is a company like Twsbi. From an outsider’s perspective, they seem to have structured their operations so they can capture a lot of information from outside the company and get that information to the people inside that need it. When the cracking issues emerged with the 540, the pen was redesigned to address it and out come the 580, and then the 580AL. Part of the reason other new products have been delayed is because they now test the pens more aggressively, which tells me they’ve internalised customer feedback and are willing to invest time and money into doing better in the future. Unlike so many companies that see customer service as a distant, unloved outpost, Twsbi have it as a central part of their marketing – and, unsurprisingly, has become a core strength for their business.

As companies get larger and more complex, it gets harder for information to be communicated and for informed decisions to be made. It’s part of the reason why small businesses often make better decisions and are seen as more responsive than big businesses – they haven’t lost their capacity for sharing information. As a business grows, managers need to spend time developing that architecture, whether it means setting up formal meetings between teams; ensuring their sales reps are regularly in contact with retailers, getting feedback, and passing it on; or developing new mechanisms (like social media) to access information. (It’s no surprise that the two most beloved companies in the FP world – Twsbi and Goulet – both have an active social media presence, operated by senior staff.)

Good architecture leads to informed decisions and increases the likelihood of project success; poor architecture leads to bad decisions and, inevitably, project failure. What’s the most important thing in your business?