As part of my series about the “How Businesses Pivot and Stay Relevant In The Face of Disruptive Technologies,” I had the pleasure of interviewing Ivan Gekht of Gehtsoft.
With years of experience in product development and business management behind him, Ivan is a technological visionary. Having adapted to the evolution of technology, he is well-versed in transforming enterprise systems, motivating teams, and pioneering customer engagement solutions. A respected leader in translating innovation into game-changing offerings, Ivan has led emerging star-ups, as well as expanded global midmarket and enterprise sales, with a proven track record of success.
Thank you so much for joining us in this interview series. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
Gehtsoft started (and still is!) as a family-owned and operated business in 1999. Our primary focus for the past twenty years was FinTech, especially Forex markets. But we did a good number of projects in other markets, from agriculture to tourism and manufacturing.
In Forex, we were a part of an emergent market. We thrived through many exciting and challenging situations brought on by our customers, their competitors, and governments of the countries we operated in.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
It is more of a personal story, but it resonated with my business approach a lot. In high school, I was a big gamer. I loved it and (like any kid) wanted to play new games before they were released. That led me to be a beta-tester and QA for some game development companies. After graduation from school, I was sure that my future was in engineering, and I went on to study aerospace and astronautical/space engineering. The university’s education was quite rigorous; less than 20% of the first-year students graduated in my specialty. In parallel, I started with Gehtsoft in 2003 as a QA engineer, leveraging my game industry experience. I’d never thought that my high-school hobby would lead me to my career instead of my six years of education.
Anyway, before moving to the US, I spent a lot of time learning English. So, when I just moved, I was sure that my English was good enough to not need anyone’s help. I thought to myself, “C’mon, you are a rocket scientist; that should be simple!”
On one of the first days, I needed to order the internet service for my house. I called a local company in New Jersey, and just a minute into the conversation, I realized that I didn’t understand 80% of what the lovely lady was saying. Just learning clearly was not enough; I needed to apply my knowledge to practice to ensure that I possessed that knowledge.
It felt like everything I was saying was just repeating, “Yes, I need internet, please” and “Yes, tomorrow” for minutes. I ended up signing up for the Gold-Premium-All-Included package that was twice what I was ready to pay.
The experience taught me that you should never be embarrassed to acknowledge your weaknesses and accept help from others. It also taught me that you will pay for your arrogance.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
Many people helped me along the way, so it’s impossible to choose just one. The only thing I can certainly say is that my family was and is my primary source of inspiration and confidence in everything I do. My parents, my brother who’s my business partner, my wife, and my son — all of them helped me to become the person I am, the man I am, and the leader I am today.
As a leader and a businessman, you need to have a support system. You need to have people by your side who will take care of you when you need it. You need people who will pick up your slack when you need them to. You need people who will make grocery runs when you’re stuck in the meetings until midnight or make sure you had a sandwich when you forgot the last time you ate.
This support system is one of the most important things you can have in life and, as this whole 2020 year showed us, you certainly need one.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?
We are an example of a classic garage-started family business. Long ago, all we had was an unused basement of a tool store owned by our relative and about $1’000 to buy a few well-used computers. Understandingly, to survive, a business like this needs to have some purpose behind it. It needs to have an idea that would ignite the first employees and will drive the business forward.
We had it. “Doing every day what others consider impossible” was an unofficial motto for many years. We were (and still are!) passionate about technology and taming it for the benefit of our clients. This motto helped us get through some tough times and allowed us to gather a team of like-minded individuals who became a core for our business for the past 20 years. We had plenty of changes during these years, but this passion for thriving professionally and personally is still the core of our business.
Thank you for all that. Let’s now turn to the main focus of our discussion. Can you tell our readers a bit about what your business does? How do you help people?
We are an Agile software research and development company. I know that sounds complicated, but it is actually quite simple. We help other businesses solve their business problems using technology and engineering practices.
It’s challenging for a non-engineering business to find and retain a highly qualified engineer, or to select a contractor or outsourcing team and verify the work they are doing. According to Dun & Bradstreet Barometer of Global Outsourcing, “20 to 25% of all outsourcing relationships fail within two years, and 50% fail within five.”
We defy those odds. Our relationships with clients span for years, and we have never failed a project. Our clients benefit from having access to the industry’s best minds, while our employees have a constant stream of challenging problems that keep them engaged and develop professionally.
On top of that, we have trained coaches, Microsoft Certified Trainers, and other globally recognized specialists who can also help train our client’s teams, help management teams understand Agile better, and use it to their benefit.
Which technological innovation has encroached or disrupted your industry? Can you explain why this has been disruptive?
Funny thing, but for the past twenty years, we were the disruptors just as often as fighting off disruptions from someone else. But, one of the most significant examples of technological disruption that both encroached and disrupted the whole software industry was cloud solutions.
First and foremost, the effect of the clouds was practically the disappearance of the barriers for entry. Small businesses (both from a cost and expertise perspective) got access to the technologies traditionally considered “enterprise-level.” Instead of spending a lump sum of money upfront, businesses now can get resources as needed.
However, there were some adverse effects of this disruption as well. A false sense of reliability prevented some decision-makers from investing in product resilience and reliability engineering. That affected a lot of products when some issues with the cloud’s reliability came up last year.
Cheap and readily available resources hit the market of developers for high-performance technologies, like C++. In the last couple of years, the market started to sober up and look for more optimized solutions, but the current price for a good developer is twice as much as it used to be because of a significantly reduced resource pool.
What did you do to pivot as a result of this disruption?
Nothing. “To do it as a result” means a reactive position, and the business that is going to prosper in the VUCA (volatile, uncertain, complex, and ambiguous) world cannot afford to react.
We must be Agile. We recognize the disruption fast, learn from it and find a way to leverage it to our benefit.
We did a lot of work in the Forex industry, from its inception to the modern days. Governments kept us on our toes by creating volatile, uncertain, and complex requirements, rules, and regulations that often changed.
In my experience, the two critical elements to surviving disruption are:
- Evidence-based and value-driven management. It helps us to recognize the changing reality, accept it and adequately assess the possible outcome in terms of the value.
- An open mind and experimentation-rich environment created for our specialists. It allows us to have a collaborative process that helps us discover, learn, and incorporate new perspectives.
It’s always harder to accept the changing reality than to implement new ways of dealing with it. What’s great is that some of our clients are also starting their Agile journey. I believe that watching how Agile helps us handle disruptions, complexity, and ambiguity as part of our day-to-day operations helped make that decision.
Was there a specific “Aha moment” that gave you the idea to start this new path? If yes, we’d love to hear the story.
As professionals, we grew together with the industry. Some of our employees started their career developing for mainframes, and we went the whole journey from a waterfall, through CMM, ISO 9000, and RUP, to Agile and DevOps.
But the first impression from Agile was the most colorful and memorable bit.
My “Aha moment” started with a classic “Oh sh*t moment.” Like many other companies, we did not avoid a stagnation phase. Complacency, bureaucracy, following orders, and obeying instructions replaced that drive, enthusiasm, and passion that we all love. I think the most shocking moment was when the people I “grew up” with in a company, with whom I sat in the same room and spent most of my free time with for years, just left. It was a wake-up call that raised a lot of questions. “Why am I here?” “What am I doing?” or “Where is this all going?”
In my search for the answers, I have found Agile. The real “Aha moment” was when I realized that we can still have all these inspiring and motivating traits of a start-up while being a mature business. We can still be driven by a desire to create value and hunger to become a better professional. It doesn’t matter if it’s your first year in the business or your twenty-first. This mindset and these feelings allowed me to take my company back, dust it off and drive it into its bright future.
So, how are things going with this new direction?
Tough, but great. We are feeling like a start-up while being twenty-plus years into the business. We are taking all of our knowledge and expertise and applying it with this new fire and passion. Sometimes it feels like in the last year, we succeeded more than in a decade before.
Can you share the most interesting story that happened to you since you started this pivot?
I think the most exciting part of our transformation is the people. I have never imagined how difficult the change could be for some of us. In a complacent, stuck-in-the-past culture, people often mix up loyalty to how things are with loyalty to the company. We saw cases when people who explicitly expressed their commitment and dedication began to act like an antagonist, becoming almost comic-book level villains to the change. While others, who were practically invisible before, became the key-value contributors.
One of the most inspiring situations was when we had a short production issue with our product because of one person’s mistake. Sounds strange, doesn’t it?
Well, what happened next was fantastic. Instead of blaming this one person, like it always happens in most corporate cultures, we had the team accept the issue for the first time since the start of the transformation. During the retrospective, they discussed what each member of the team could have done better. They supported each other as a great team should. It’s never a problem to make a mistake; we have E&O insurance for that, right? Learning from mistakes, getting better every day, and never repeating them is what’s vital.
What would you say is the most critical role of a leader during a disruptive period?
Remain calm and be a guiding star.
During the disrupting period, your people are scared, uncertain about the future and feeling lost. Your goal is to give them a sense of purpose, show the direction, and lead them forward.
When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?
What can destroy your teams’ morale? Lack of trust, lack of understanding, and feeling helpless.
As leaders, we have plenty of tools to guide our people through troubled times. We can:
- Keep the goals, situation, and problems transparent, so it helps develop enough understanding and awareness.
- Arm your people with scientific methods which give them the tools to overcome complexity and uncertainty.
- Empower your people to build up confidence and trust inside the teams.
- Use the “Fail fast — learn fast” principle that helps minimize the pain associated with mistakes.
- Create fast value delivery practice that helps to facilitate confidence.
If you help your team to set small, achievable goals, it creates a trail of small, consistent victories. People have to have confirmation of their capabilities and success. It’s always better when it comes from their effort rather than just your words.
Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?
I would personally choose “Always Start with Why.”
Disruptive, turbulent times are always scary and disorienting. Facing uncomfortable challenges, people are often seeking refuge in routine, the known, and easy actions. Unfortunately, in these times, the routine is useless, at best. Challenging times are a prime opportunity for creative and unusual responses. We must get out of our comfort zone to find them.
Asking yourself, “Why am I doing this” helps you find the courage to act.
Asking yourself, “Why is this happening?” helps you understand the nature of the problem.
Asking yourself, “Why didn’t I think of that?” helps you find the areas of complacency and opportunities to evolve.
Can you share 3 or 4 of the most common mistakes you have seen other businesses make when faced with a disruptive technology? What should one keep in mind to avoid that?
Even though every business is different, there are a few things that are in common when it comes to mistakes during turbulent times:
- Failure to recognize the disruption in time. We can find millions of reasons to ignore something new. When the world around is changing, being stuck with your head in the sand will not help. You need to fight off the complacency and the fear of change.
- Haste in the adoption of disruptive technology. Usually, the new technology is not a silver bullet or one-size-fits-all solution. You need to understand why it appeared, why it’s disrupting, and how you can benefit from it. Adopting and applying new technology in the wrong way can do more harm than good.
- Applying old principles to new ideas. You should not necessarily reinvent the wheel every day, but approaching every new technology or situation with the same old toolkit is a mistake. The world around us is changing faster and faster every day, so we need to learn how to change while keeping up with the pace.
- Bureaucracy. Usually, the front-line people are the first to see the change–new questions, new problems, and unique patterns. If you have too much red tape between them and your decision-makers, you will always be late to the party. Give people more freedom, empower them, hold them accountable, and witness great results.
You cannot always solve every issue on your own; that’s why having trusted partners is crucial for every business.
Ok. Thank you. Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business leader should do to pivot and stay relevant in the face of disruptive technologies? Please share a story or an example for each.
1) “Start with Why.”
I often go back to Simon Sinek’s “Start with Why.” It’s not only applicable for sales or for creating a start-up or defining the purpose of your business. The “5Whys” practice from Lean or Ishikawa Diagram — they all empower you to ask “Why?”
Understanding the driving force behind the changes happening is crucial in accepting these changes and benefiting from them. Understanding the values for yourself and your clients helps you find the right way to adapt to these changes. This principle helped us on many occasions and prevented some costly mistakes for our clients and us.
Once, we had a client that asked us to redesign their API because of their users’ complaints. In traditional culture, the sales team would be all over the client, selling the “award-winning API” solution that only we can do. Instead, our team started with the “Why.” In just a few short days of work, we realized that the API our client had was the perfect fit for the purpose and found the issue. The problem was not the lousy API, the problem was a lack of documentation and support for the API users.
Our client got away with a much cheaper and shorter project of updating the documentation and samples. Eventually, when the market demanded a truly new API, and we could disrupt the market with our solution, the same client trusted us to do that.
2) “Be a leader, not a manager.”
Nothing in the business is as valuable as the people, and nobody can help you more than an empowered team of like-minded people. Over the past twenty years, we had a few turning points for our company when we had to make significant changes to catch up with the world around us. Every time, our team helped us, supported us, and collaborated with us to make these changes happen. I could not even imagine doing all that on my own.
In the beginning, a lot of our team had to work nights and long weekends, just like any other start-up. Our management team always stayed with the teams even if we could not help them professionally. I always made sure that the team had something to eat (as simple as getting them a take-out or ordering a pizza) or could get home if buses were no longer going (driving them myself or getting them a cab). In 2008, our CTO and a few trusted employees opened our first US-based office. These people left the comfort of their established lives at home, they encountered a profoundly changing environment around them, and they practically had to travel half-way around the globe. However, they did it for us and with us. Some of our employees practically became part of the family.
3) “Don’t assume: suppose and validate.”
The most dangerous attitude while being disrupted is sticking with old rules and outdated logic. The disruption may make our experience irrelevant in a single day. We must use practical evidence to recognize when the rules have changed and adjust our course of action accordingly.
This practice helped us a lot when NFA sharply changed Forex companies’ regulations in 2009, leaving our client less than three months to comply. “Complying” meant refactoring a big part of the existing software system. It was an incredible amount of work for such a short period of time, leaving no space for the traditional project approaches.
The only way to succeed was to make hypotheses, prototype them, and collaborate with lawyers and compliance officers to validate them. It was a challenging job, and I think that less than 30% of the businesses in the domain could make changes in time, and most of those who couldn’t didn’t survive.
Accepting the unknown and uncertain, and applying the scientific approach, helped us turn “practically impossible” into a successful project.
4) “Action over reaction.”
Time is always the critical factor when you are dealing with disruption and changes. The faster you adapt to a new reality, the faster you stop losing and start earning. Sometimes this would be about business survival.
I can give you an example when we paid quite a price for not following this principle. We had a very successful project with a 17-year history. This long-lasting relationship, and the slow pace of the project, lulled us to haze. We’d missed the moment when the changing technology demanded significant changes in user experience. A reactive approach couldn’t save us here because the client decided to depreciate the project and move to a new solution.
We learned the lesson, and we adapted proactive behavior to other projects. Eventually, the client even expressed regrets about the decision to move away from us. However, the proactive position would have saved us a good account and protected our client from needless expenses by changing vendors. So, we made sure that it never happened again.
5) Collaboration over confrontation.
As an outsourcing business, we often face initial hostility from in-house teams that demonstrate protective behavior. They’re often more concerned about their “status quo” rather than the success of the project. Collaborative work principles, sharing the knowledge and shared understanding of the common goals, usually help overcome this hostility.
Once you have an established collaboration between management, who understands why the change is happening and what value it brings, your in-house development teams, and your contractors, the successful projects happen. As a result, years-long productive relationships are established.
Moreover, the Agile community is very giving and very involved. For example, just this year, over 150 experts from around the world volunteered for the “Woman at Agile” mentorship program, and we are proud to be a part of these efforts.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“For all of sad words of tongue and pen,
The saddest are these: “It might have been!”
by John Whittier.
Business Agility is first and foremost about the mindset, rather than tools, principles, or practices. You need to have an open, growth mindset to succeed. Growth is about mistakes; it’s about learning from them and focusing on the value you produce rather than the efforts you put in.
It’s about never passing onto a chance for something better just for the sake of the “status quo.” The most significant success with fighting off disruptions came from the understanding and accepting that sometimes a fixed mindset is still in me and it’s ok to make an effort and overcome it.
How can our readers further follow your work?
Please, do follow me on LinkedIn:
https://www.linkedin.com/in/ivan-gekht/
And follow our corporate blog at:
https://www.linkedin.com/company/gehtsoft/
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