A Product is not the Sum of its Parts

The assembly line was a simple but effective idea: complex products could be broken down into their smallest components, each optimised independently for maximum efficiency. This approach was based on the work of Frederick Taylor's book, The Principles of Scientific Management. Taylor proposed that the key to industrial efficiency lay in breaking down every process into its constituent parts, then optimising each one separately. This approach transformed manufacturing, creating unprecedented efficiencies in an era where standardisation and scale were the primary competitive advantages.

But today's world moves at a dramatically different pace. Even traditionally stable industries like auto manufacturing and energy distribution are experiencing rapid, fundamental change. Tesla can update their vehicles' capabilities overnight, while energy providers must rapidly adapt to the complexities of renewable sources and smart grids. In this new reality, the ability to adapt quickly has become more valuable than the ability to optimise individual components.

The Legacy of Component Thinking: Ford's Software Dilemma

Perhaps no example better illustrates the limitations of component-based thinking than Ford's current software challenges. In a remarkably candid interview, CEO Jim Farley revealed how the company's traditional approach to manufacturing has become a liability in the software age.

For decades, Ford treated vehicle components as discrete units that could be outsourced to specialised suppliers. This strategy, born from assembly-line thinking, saved approximately $500 per vehicle but created what Farley describes as a "loose confederation of software providers." The result is a modern Ford vehicle containing roughly 150 different modules, each controlled by software written by different companies in different programming languages.

This fragmented approach has created a nightmare scenario where even simple software updates require navigating a complex web of intellectual property rights and disparate coding systems. As Farley noted, "Even though it says Ford on the front, I actually have to go to Bosch to get permission to change their seat control software." While each decision to outsource made sense in isolation, the cumulative effect has created a system that's nearly impossible to evolve. Ford are now rewriting all of their own software from scratch in an effort to catch up with the competition.

The Integrated Alternative: Octopus Energy's Kraken

In stark contrast stands Octopus Energy, a company that has fundamentally rethought how to approach software in the energy sector. Instead of breaking their system into isolated components, Octopus built Kraken – an integrated platform that seamlessly connects everything from energy supply management to customer service.

The results have been remarkable. In just nine years, Octopus has grown from a startup to become the UK's largest energy supplier, capturing 24% market share. Their integrated approach allows them to operate with unprecedented efficiency, offering better pricing and superior customer service compared to competitors still trapped in siloed systems. The Kraken platform has proven so successful that other energy companies are now licensing it, creating an additional revenue stream for Octopus.

The Shift in Product Thinking

The contrasting fortunes of Ford and Octopus Energy highlight a fundamental shift in how we need to think about products in the digital age. The traditional approach of breaking down products into independently optimisable components – while brilliant for traditional manufacturing – becomes actively harmful when applied to software-driven products.

Software, by its very nature, is about connections and interactions. The value of a software product lies not in its individual features but in how those features work together to create a coherent experience. When we fragment development across different teams, companies, or systems, we create artificial boundaries that limit innovation and adaptability.

This isn't just about how we write code – it's about how we structure our organisations and think about products. In today's world, software isn't just a component of the product; it's the nervous system that connects everything together. Treating it as a separate function, isolated from marketing, operations, and finance, is like trying to separate a car's engine from its transmission and expecting both to work efficiently.

The Way Forward

For established companies, embracing this new reality often means painful transitions – as evidenced by Ford's decision to completely rebuild their software architecture from scratch. For newer companies, it means resisting the temptation to optimise individual components at the expense of system coherence.

The key lesson is clear: in a world where software is becoming central to every product and service, we need to evolve beyond the assembly line mentality. Success lies not in optimising parts but in creating systems that can evolve and adapt as a whole. The companies that master this shift in thinking – seeing their products as integrated systems rather than collections of parts – will be the ones that thrive in the decades to come.

For companies looking to break free from legacy constraints and embrace true product thinking, the path isn’t easy—but it is necessary. ZeroBlockers helps organisations navigate this transformation. Let’s talk about how we can help.