The perfect triangle

Written by Alistair Croll, Co-founder & Chair of FWD50.

Trigger Warning: I’m going to say mean things about governments, startups, and corporations. So you’ll probably be offended by something in here.

There’s an old adage in design and consulting work: Good, fast, and cheap—pick any two. Expecting all three from a project is naive. The rule underscores a hard truth, which is that these three outcomes are fundamentally opposed.

As this diagram illustrates, expecting all three is naive, but optimizing for two out of three can be done—you just need to know what you’re getting into. If you have to get a solid product shipped quickly, be prepared to pay top dollar. If you’re willing to wait, you can give a small team a long runway and produce something superb. And if you insist on doing things quickly and cheaply, you won’t get a good product. This is often referred to as the Iron Triangle of Project Management: Every project is a tradeoff between scope (how good something is), cost (how affordable something is), and time (how fast something is.)

But there’s another aspect to this trifecta that’s seldom discussed. The three factors also reflect three kinds of organization—governments, corporations, and startups—each solving for the thing they value most: Predictability, profit, or speed.

As this triangle shows, each kind of organization has an underlying goal it’s trying to achieve. This is a gross oversimplification—institutions can land anywhere on this triangle, and the three apexes are extremes—but while the map is not the territory, it’s a good way to understand where we are and how to get where we want to go.


Startups want fast, not cheap or good

Steve Blank, one of the founders of modern startup thinking, defines a startup as an organization formed to search for a sustainable, repeatable business model in conditions of extreme uncertainty. The key word here is search: A startup will burn millions of dollars just to build something that lets it learn whether a business model exists. It doesn’t care about costs much, which is why we have venture capital.

Most startups don’t know what they’ll become when they find their niche. One of the most-quoted lines in Lean Analytics, a book on data-driven startup methods I co-authored with Ben Yoskovitz, is “you’re not building a product; you’re building a product to figure out what product to build.” That means startups value speed above all else, so they can iterate repeatedly to the right product before money runs out, and they tend to ask for forgiveness instead of permission.

Early-stage startups launch a minimum viable product, the simplest, easiest thing they can do to test the biggest risk the startup is facing. Sometimes they announce a product that doesn’t exist to test demand. They often ignore accessibility, or launch on only one mobile platform or in one language, because they don’t know whether they’ll ever actually build a full product.

Once a startup discovers a sustainable, repeatable business model, it’ll hopefully fix these things. But it will also cease to be a startup, because it is no longer prioritizing learning over all else, and it’s now transitioning to execution. It becomes a corporation.


Corporations want cheap, not fast or good

In 1970, the economist Milton Friedman wrote an article for the New York Times entitled “A Friedman Doctrine: The Social Responsibility of Business is to Increase Its Profits.” This was more than an opinion: If a company’s CEO doesn’t maximize profits for shareholders, she can be ousted by the board of directors or by a majority of shareholders.

This isn’t quite as cynical as it sounds. All else being equal, every company wants to be faster than its competitors in bringing new things to market, and every company wants to satisfy its customers. But these are outcomes of a focus on profit: Take too long to ship something, and others will steal your market share. Deliver a shoddy product, and your brand will suffer irreparable damage. Patagonia’s Don’t Buy This Jacket ad campaign urged customers to go outside and hike on Black Friday, rather than spending the day fighting other buyers for discounts at big-box retail stores. This enhances their brand as a sustainable, outdoor-focused company. Their executives have decided this is good for the business, and shareholders agree.

Unfortunately, the fastest route to profits is often the exploitation of an externality. Companies sell opioids and nicotine, but don’t pay for the collapse of entire towns or the cost of lung cancer. They hire migrant workers for seasonal work, but deny them basic human rights. They entertain tourists on the high seas, but don’t pay for the pollution of oceans. They sell shoddy investments for profit, but get bailed out by taxpayers when those investments collapse. If capitalism has proven one thing, it’s that corporations are extractive. The public sector is often left to clean things up, providing healthcare, pensions, environmental regulation, minimum wage, and more.


Governments want good, not fast or cheap

The opposite of progress is congress. At least, that’s the perception most citizens have of government. Paul Craig’s recent article Paperweight lays the blame for this squarely on “onerous levels of foresight.” He cites the example of a trivially small website—just twelve pages—that required approval from eight different groups over six months, and 39,230 words of documentation. That’s half of the first Harry Potter book.

With the exception of intentionally malicious regulations designed to discourage people from completing a task (what Richard Thaler calls sludge, the opposite of nudges designed to move someone towards an outcome) most bureaucracy begins with noble aspirations. We want to avoid corruption, so we put in governance. We want to avoid marginalizing users, so we add an accessibility review. The list builds up, and soon you’re spending more money making sure grants are delivered equitably than on the grants themselves. Bureaucracy breeds caution, and caution breeds bureaucracy, because the public service must, above all else, do what it promised for everyone.


Fixing trust in government

In 2020, our annual FWD50 conference coincided with the U.S. Federal Election. One of our core themes that year was resilient democracy. The events since that time have underscored just how fragile democracy is. A year later, our 2021 conference touched on restoring trust in democracy; during an async panel last fall, Hillary Hartley repeated a fundamental truth of digital government: Strategy is delivery. Societies rely on government services all the time, without knowing it, and the best way to rebuild trust in shared public institutions is to deliver.

It’s naive to expect that something can be good, fast, and cheap. But it’s just as naive to think that the perfect organization lives in the middle of the iron triangle. The answer is not a bland, one-size-fits-all compromise.

Instead, we need situational awareness. We need to decide where on the triangle each government initiative should live, and judge it accordingly:

Much has changed since the governments we know were founded, and many norms are now outdated folklore. The pandemic has further accelerated digital adoption within the public sector and the people it serves, and we’ve seen what happens when we intentionally solve for different outcomes. We need to know when to prioritize speedy iteration, when to prioritize careful scope, and when to prioritize efficient affordability. For any organism to survive, it must be able to adapt, and government is no exception.

If we want to restore trust in government, we must learn from startups and corporations (while avoiding their obvious perils.) Sometimes we need ruthless efficiency, outsourcing, and an acceptance of externalities. Sometimes, we need speed and learning, even if it costs us, or we cancel the project when we conclude it was ill-advised.

Above all, we need leaders who can understand the situation, communicate it clearly to stakeholders and the public, and give their teams the right priorities and metrics.

Throughout 2022, we’ll be exploring the tradeoffs this triangle represents. We’ll seek out technologists, ethicists, corporate leaders and entrepreneurs, asking them what they’d do differently.

When we better understand how to navigate the iron triangle, we turn it from a border that constrains us into a canvas that helps us deliver better. And when we deliver better, we restore trust in government, and make it resilient once again.