Services companies prioritize efficiency over effectiveness, focusing on resource utilization and avoiding rework, whereas product development teams should focus on continuously improving the product even if it means rework. Additionally, services companies emphasize skills like task and project management over what matters most for products: deciding what not to do, usability, and shipping early versions.

1. Anand Kumar Keshavan
Software Product Development
Specialist

2.  Services companies are obsessed with
efficiency
 Focus on utilization of “resources”
 Avoid rework and changes-
 Product development teams need to be
effective and not necessarily efficient
 Rework is fine if it improves the product
 Focus on resource utiliztion doesn’t add any value to
the product(s)- if people are idle they are better off
studying products or skunkworks or learning
something or taking a vacation! Nothing is gained by
“utilizing” their time for “utilizations” sake

3.  Services companies build project management as their
core skill-
 Task management- who is doing what, when
 Delivering to a plan
 Covering risks… etc
 To delivers successful products these skills are of
secondary importance:
 Focus on what to do and more importantly
 What not to do
 Outward looking, software usability focused – not just
engineering process
 The ability to define and follow processes is of little or no use
when you are developing early versions of a product.
 Identifying remote risks and doing things to mitigate these
risks doesn’t help in shipping products!

4.  Services companies need to hire bodies by
dozens- that is the only way their revenues can
be maintained or increased.
 Rarely focus on hiring great sofware
development talent-
 Great talent causes disruption in compensation and
cultural parities.
 Executives refrain from hiring “Outlier” type talent
and opt for the sofer option of hiring “more of the
same” kind of “resources”

5.  Services companies :
 Doing what one is told to do is a great trait
 Customers tell the Executive who tells the PM who tells the
developer etc
 Foster a culture of “Boss knows the best”
 Product companies:
 Need opinions, decisions etc to be questioned and challenged.
 Executives and Senior Managemnt must remain open to their
ideas being challenged while retaining their ability to direct
their reports towards reaching deadlines and milestones

6.  Operating managers invoke policies and
diktats to get people to work on their tasks
during weekend and holidays when a project is
delayed.
 May be compensated with bonuses and better
appraisal results!
 In a product development company the leaders
create a culture whereby individuals willingly (
without being told) contribute their own time (
discretionary time) meet deadlinesa dn solve
problems.

7.  Self explanatory.
 Incentive structures in services companies tend to
introduce a bias towards “large” teams
 An Executive’s importance is directly proportional
to the “team size” that he/she commands
 Product companies need teams that are
 Small
 Highly committed
 Highly compensated
difficult for services companies to execute.

8. If one were to sum up in one sentence:
Services companies don’t create product businesses
because their rewards are based on doing “more” vs
doing “less” or “just enough”.