Knowing When to Pivot

Lessons Learned from Digital Native Businesses: Tehama


Tehama, a desktop as a service (DaaS) company, helps enterprises create cloud-based virtual offices, workrooms, and desktops anywhere in the world. The pandemic came only months after the company’s birth in 2019, and suddenly employees around the world were working from home.

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The remote work vision of Tehama CEO Paul Vallée was dramatically accelerated as a result of the global crisis. While it may be tempting to think he was clairvoyant, Vallée is quick to point out that the company’s success has had more to do with fresh thinking and forward momentum than timing — nothing mystical required.

One could say Tehama is an overnight success that was decades in the making. For years, Vallée had “beaten on the drum” about the power of the Internet to enable workforces while he was with Pythian, the global IT services company he helped found.

“We got off to a great start as it had taken us many years for the cultural zeitgeist to accept that Internet-native workforces were viable; but this was something that had to happen if we were to make anything of our idea to enable companies to unlock the full potential of their employees, no matter where they are.”

Tehama has its origins inside Pythian, a larger and now established organization. However, Vallée said it quickly became apparent that trying to run a startup inside an established services business was not going to work.

“Trying to operate a startup inside a superstructure, where mezzanine capital and other sources of funding can limit forward momentum, is a challenge, particularly with regards to funding being tied to profitability. At a certain point we had to separate the two.”

Even though they had to pivot to operate independently, much good came out of the Tehama/Pythian connection. “Our Pythian experience gave us a foundation of knowledge around building digital-first workplaces,” said Vallée.

Fresh and Unstuck

Vallée said successful digital native businesses (DNBs) are not afraid to try new things. They tend to be flexible in their practices and processes.

“The longer a business has been going,” he said, “the more their practices are cemented to when they first adopted them. Say you decided to become compliant with a particular standard of care around data integrity (e.g., the credit card industry’s PCI compliance standard). So, you adopt that standard, but the mechanism by which you deliver X or Y capability tends to stay frozen in time, to when you first did X or Y.”

For example, in compliance and quality assurance today, said Vallée, fresh thinking is needed. “A digital native business will naturally embrace the idea of ‘Shift Left’, a testing practice aimed at finding and preventing defects earlier (further to the “left”) on the software delivery line.”

“If you had built your compliance strategy a couple of years ago, you probably would have done it with a ticketing system that collects your signature for you. Ten years ago, you might have been collecting your signatures on paper, scanning that paper, and then putting it into your document library. The new approach involves creating compliance as code, where your mechanism for collecting release approval signatures happens as part of your overall process.”

“With established enterprises, more practices are ’cemented in time,’” said Vallée. “It’s imperative that companies become unstuck with their practices and processes. One of the advantages of those born digital is that they really are, in many ways, starting from scratch, not adopting tired old playbooks ‘just because.’”

Smart Tool Choices

The truth of that age-old idiom about not reinventing the wheel — starting fresh at something from the beginning when there is no need — is not lost on Vallée. It’s a mistake, he said, to try to build your own capabilities or tools rather than just adopt what already exists, and maybe with some tweaking could be perfect for you.

Vallée learned this painful lesson while at Pythian.

“I’m still licking my wounds from a major digital transformation exercise built primarily in-house,” he said. “It was a result of that old, stuck-in-time dynamic. We had built a ticketing system as there were few open-source options available. Unfortunately, we ended up being stuck with it for a lot longer than we wanted to be.”

“The price and complexity around abandoning it was intimidating, to the point that we decided to keep it and build around it. This turned out to be a hugely expensive effort.”

The lesson learned? Change is not to be feared. While it may be intimidating at first, there are solutions that are well within reach — and that will scale and grow with you.

The Cost of Change vs. Status Quo

Buying a solution is one thing, but changing over to it, and making it work in your company, can be expensive. While Vallée agrees with this, he also notes that the cost of maintaining status quo can also be massive. “It’s a matter of finding that tipping point between switching over and taking no action at all.”

Switching costs can be overstated. “Vendors are there to support you in your switchover; they have all the playbooks, run-books, and other automations to help you.”

Planning with an Uncertain Future
Dealing with an uncertain future at high speed is not impossible. But DNBs know that old-style strategic planning won’t get you to the level of agility you want.

How to deal with the uncertainties of tomorrow? “Companies must tack steadily onward,” says Vallée. “In the absence of any concrete destination, you can still work toward arriving at a consensus of what that destination will likely be.”

Working towards an idea, even one that is still forming, is preferable to waiting for the perfect moment when everybody is on the same page. “Do this,” said Vallée, “and you’ve already lost. Instead, iterate baby steps, and have a bias to action. The best approach to transformation will always involve doing something.”

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Jim Love, Chief Content Officer, IT World Canada