The Elves Leave Middle Earth – Sodas Are No Longer Free

http://steveblank.com/2009/12/21/the-elves-leave-middle-earth-%E2%80%93-soda%E2%80%99s-are-no-longer-free/

by icey • 17 years ago

327 226 17 years ago

gaius5• 17 years ago

Absolutely. Another symptom is machine naming. When people who will never themselves log into them tell you to dump whatever whimsical themes you had and call your boxes according to an official convention, you gotta wonder what value they're adding to the organization.

ramanujan2• 17 years ago

Hmmm. It's a lot easier to automatically manage boxes named "server001" than a list of random names that constantly has to be maintained.

Your own personal laptop is a different matter.

Moreover, if you want personality, just set up your ~/.ssh/config to retain the legacy name for yourself, e.g. "ssh middleearthname" to connect to server001.foo.com

dagw3• 17 years ago

The thing that more often than not that list of 'random' names isn't random. There is often structure and information embedded in the naming scheme, even when it might not be obvious to an outsider. Having someone come in and replace all of that with server001-server999 will often remove information.

gaius5• 17 years ago

The names aren't random, tho'. The people using the machines every day know that (for example) all the database servers are named after planets, all the web servers are elements of the periodic table, all the development boxes are Muppets characters, etc. It costs nothing and makes your engineers happy. Plus it is intuitive, mistakes of the kind of being logged into the wrong box never happen.

I personally have very nearly experienced a disaster because the official naming convention had only one character difference between production and UAT...

Anyway, you've missed my point a bit. It doesn't matter much in the grand scheme of things what the boxes are called. It DOES matter than your company is employing people to impose pointless, trivial changes and policies on people with real work to do.

bcl• 17 years ago

It depends on the number of machines. When I have 3 or 4 they get names (currently using Firefly characters), but when I have say 20 or more they get numbers. Or they get both so that my scripts are easier to write. For me it also depends on function. If its just another app server cloned from the master, it gets a number -- it has no personality. But if it is a backup server, mail server, dev or test system it gets a name.

xiaoma• 17 years ago

"Hmmm. It's a lot easier to automatically manage boxes named "server001" than a list of random names that constantly has to be maintained."

That's true. However, humans do better with names than numbers. Otherwise, DNS wouldn't exist. The real question is who do you want to optimize for?

raganwald3• 17 years ago

Hmmm. It's a lot easier to automatically manage boxes named "server001" than a list of random names that constantly has to be maintained.

I bet you could save $10,000 a year by eliminating the arbitrary names and calling them ServerXXX.

Sorry for the attempt at a witty reply. Let's start again. Agreed, there are efficiencies. The point of the article is that when you institute changes like this, you may create unintended consequences like a mass exodus of people who liked working for a company where the servers were named after Muppet characters and associate "Server042" with a company where professional managers demand cover sheets for their TPS reports.

Before making such a change, ask yourself this question: Is what I'm doing good for the company?

jimbokun3• 17 years ago

How the heck are you supposed to remember what is running on "server001" vs. "server002" or "server003", etc.? Why not just stick to IP addresses if you're going to do that?

billybob• 17 years ago

"It's a lot easier to automatically manage boxes named "server001" than a list of random names that constantly has to be maintained."

I'm not a systems admin, but I presume this is because you can write a for loop that counts through your machines and does something to each, right?

In that case, couldn't you just have nested arrays?

machines = ['mailservers'=>['Earth'=>'some IP', 'Mars'=>'some IP'],'devservers'=>['Dopey'=>'some IP', 'Sneezy'=>'some IP']] ...etc.

Now everyone can connect to a machine with a memorable name, AND you can loop through all the dbservers if you need to, AND anyone who doesn't understand the system can look in one place to grok it.

What's the problem?

theBobMcCormick3• 17 years ago

How is managing boxes named server001 easier than giving the servers, oh, I don't know.... actual NAMES! Are you seriously gonna tell me you manage the boxes with scripts that iterate through the numeric portion of the server names?!? Because if that's the case, your problems are WAAAYYY bigger than just naming convention problems.

Names like server001 are great and fine for a cluster of more or less identical, interchangable machines (Beowolf cluster, cluster of VMware hosts, etc.). But it sucks ass for most other circumstances. Seriously. Try having discussions about a project involving a dozen servers (out of hundreds in the company mind you), each with names like server3056, server3087, server3109. It sucks, because 5 minutes after talking about it you find yourself wondering: Hmmm... was I supposed to reboot 3087? or 3078? :-)

pavel_lishin3• 17 years ago

Having only ever worked for one small company, it's really hard for me to imagine this actually happening.

Hell, from most of the stories I've heard from people working for bigger places, people who don't log into the machines frequently don't even know that the machines have names.

allenbrunson• 17 years ago

you might be surprised, then!

i used to work for a company where i wrote critical pieces of their software infrastructure. it's a series of interconnected apps which i named after marsupials. i have now left, and they are in the process of giving the apps boring names that more directly indicate what they do.

DannoHung• 17 years ago

I understand the appeal, but I disagree. Even at my most whimsical, I'd rather have the name a of a machine really be tied to some actual information about the machine. You don't have to use muppet names to indicate that something is a development database server, for example.

gaius5• 17 years ago

At one job, the convention imposed on us was <manufacturer><number>. So dell001, dell002, sun67, etc etc. You can see why I have issues with this ;-)

iamwil• 17 years ago

This reminds me being told the column names in a table of the admin panel that customers would never see would have to be changed.

Furious but didn't contest it.

RiderOfGiraffes• 17 years ago

Some care required. Four years ago we coined some names for internal use that we knew no one would ever see. Now they've leaked out into places where some customers can see them and the entire code-base really ought to be cleaned for consistency. Currently we have visible names and hidden names, and remembering the dichotomy is proving difficult. We're cleaning as we go, but we are all wishing we'd been a bit less whimsical.

shpxnvz2• 17 years ago

I've seen this happen once, and I can almost understand why it did. In this case there was a rather severe production problem that had potential long term revenue effects for the company.

In the course of the after-action report some screen dumps were shown to the executives in which the "whimsical" server names appeared.They were (understandably) in a rather agitated and non-whimsical mood, and incorrectly (in my opinion) correlated the seriousness of the problem which the perceived lack of seriousness of the naming scheme.

They could not see that the naming scheme was not whimsical - it was in fact quite methodical and conveyed more meaning to the engineers who lived with the machines everyday than the strict, sanitized names we eventually ended up with.

potatolicious5• 17 years ago

... and this is why I absolutely oppose letting non-engineering-background people run a company. You really have to have been in the trenches yourself to be qualified to manage those who are.

gojomo• 17 years ago

Given that you've anonymized the company, can you share the theme from which the 'whimsical' names were drawn?

(I'm curious as to what seemed so out-of-place in a serious action report. Mythological gods seem like they'd be OK... but maybe Seven Dwarves or Deadly Sins or Slang Drug Terms would be embarrassing?)

Scott_MacGregor2• 17 years ago

I like having my servers named things like HQDC01 instead of something like MrSpock or Samantha, but I do know others who prescribe to the Gunnery Sergeant Hartman (Full Metal Jacket) style of server naming--"Tonight, you p*kes will sleep with your servers. You will give your server a girl's name. Because this is the only...etc...".

The HQ is for Headquarters, DC for Domain Controller, 01. HQDS01 for Headquarters Development Server 01, etc... It's an MCSE best practices naming convention to locate and indentify servers.

InclinedPlane6• 17 years ago

Yup. And then you are forced to move the physical location of the server to some remote data center. But because your infrastructure is tightly coupled to the specific machine name you can't change it, so now the name is misleading.

ax0n2• 17 years ago

I've worked at two startups while they slowly took away the free stuff. It sucks, but it's a phase that successful (okay, and not-so-successful, in their death throes) companies eventually need to go through.

Also, thank you for removing the apostrophe, icey. gnashes teeth at stray apostrophes

algorias4• 17 years ago

Why do they need to go through it? free soda will always be a tiny expense in relation to everything else.

Sure 10K sounds like a lot of cash for soda, but a company with 50 employees is spending millions on salaries.

mechanical_fish• 17 years ago

10K sounds like a lot of cash for soda

This, by the way, is the very definition of bikeshedding. Everyone knows about soda; everyone has bought it before. So cutting out soda is something that the entire executive team feels competent to discuss -- unlike, say, the efficiency of the QA department's staffing schedule, or climate control zones, or the use of electricity for lighting offices at 3am, or the difficult politics of downsizing particular business units. Soda is a simple theatrical stunt for making the CFO look good. It's a good show.

Of course, as Steve points out, it sends a very clear message to the people who've been drinking those sodas: Your work is no longer considered an investment in the future. Now you're a cost center.

m_eiman• 17 years ago

A quick calculation says that $10k for 50 employees is roughly $16 per person and month. Less than one percent of the salary cost. If the margins in the company are so thin that this expense matters, they've definitely got bigger problems.

qjz6• 17 years ago

In a startup, every expense is potentially a total loss, whether it's for a computer, a soda or a consulting fee. But when a business establishes a revenue stream that is insufficient to cover expenses and generate a profit, it has to differentiate between essentials and luxuries. Free soda will always be considered a luxury, whether or not it is a cost effective employee incentive.

Personally, I hate working in places with these kind of perks. I think they're abused by both management and employees. If your salary isn't enough to cover your personal needs, free soda doesn't solve the underlying problem.

assemble4• 17 years ago

10k pays for half the janitor's salary.

We don't get free anything where I work, and I'm fine with that. My company's job is to make more money, not baby me with things that I'm perfectly capable of paying for on my salary.

ax0n2• 17 years ago

Everywhere I've worked that's not a startup, I've had to pay for all my stuff. The startups I worked for, as they became non-startups, started ditching perks like beer:30 Fridays, catered on-site lunches, free soda and the like. One took off and is wildly successful these days, the other became a non-startup by becoming a non-company.

It's my personal observation. Of course, it's probably different here on the prairie (Kansas City) than it is in The Valley. Maybe the Oracles, ciscos, Googles and Yahoos of the world still provide plenty of goodies for free out there.

I agree with many others in this thread that expenses are expenses. $16 per person per month is $10k at 50 employees. What about the 18-kilohuman corporation I work for right now? $16 per head per month turns into a $3.5M line item per year at that point. When does free soda become impractical?

Also, the original article posits that it's more a symptom of the culture change than anything. Having to rifle through your pockets to score that Mountain Dew that used to fall out of the machine with only a button-press is often the first tangible effect of that culture change.

jameskilton• 17 years ago

Sorry, I've never seen a "need" here. Google gives free lunch, massages, has exercise equipment rooms, the works that they'll never charge employees for.

No, this is too much tunnel-vision focus on the bottom line without even a simple thought of the people.

endtime2• 17 years ago

Didn't they stop offering free food to the non-engineers a little while ago?

lallysingh2• 17 years ago

Common, I think, amongst people who work just for the money, and don't actually enjoy or care about the work itself.

markkanof• 17 years ago

Why does any company need to go through this phase? It's such a small cost relative to any pretty much any other expense that a business might have.

I know this is just an anecdote, but I worked for a non-profit for a number of years that had free soda fountains for employee use. It was a nice touch, and didn't cost them very much at all to maintain versus all the other costs of keeping the organization running.

iuytgfghjmk2• 17 years ago

Because the managers all learned in MBA school that results are measurable, Removing sodas saves a measurable few $K/year, and the only downside is the unmeasurable loss of all your good people. It's the same with banning personal web use, flexi-time etc - the downside isn't measured, therefore there is no downside.

bmj2• 17 years ago

Maybe I'm just weird, but this wouldn't bother me. My employer does offer free sodas and snacks, but I don't take advantage of them (I don't drink soda, and tend not to snack on junk food). I do drink the free coffee, but in the past, I've survived this by bringing a thermos from home. I can understand why some people might not like the free stuff to be taken away, but I'd prefer to work for an employer that compensated fairly for my work, and one that does not expect that I work more than 40-45 hours on a regular basis.

dagw3• 17 years ago

The point, as mentioned in the article, is not so much the (lack of) free soda, but what it is a leading indicator of. Once a company starts pinching pennies and ignoring the effect it has on moral then there is a good chance that worse is to come.

gaius5• 17 years ago

See this for why it doesn't make sense:

http://www.businessinsider.com/2008/11/why-companies-fire-pe...

algorias4• 17 years ago

It's not about your compensation at all. The impact of free snacks is so tiny for the employers cost structure that the decision to offer them or not is completely unrelated to their ability (or willingness) to pay a fair salary.

Would you really prefer an extra $200 or so per year over free soda? I think you wouldn't even notice the difference in your bank balance.

qjz6• 17 years ago

The company has to succeed, my stock has to go up in value, and as the company grows in size it can get much better deals on things like health insurance than I can alone. $200/yr spent on soda doesn't benefit me in any way at all. I'll drink tapwater at work if I'm thirsty. Is startup culture really so averse to frugality and so blind to its benefits?

mmt3• 17 years ago

Part of the problem is that, to replace $200 of company-paid snacks, an employer would need to pay me quite a bit more to purchase the same thing out of a vending machine.

I'd estimate the vending machine operating markup to be, conservatively, 25%. That makes my cash out of pocket $250. To get that amount of take-home, with 34.3% federal and state income taxes and 15.3% social security, my salary would have to go up $500.

Yes, I'd rather have the $500 increase, but an employer would be foolish for doing it this way.

eli3• 17 years ago

It's not really about compensation... or even about soda.

These engineers joined a start-up in its early days because they wanted to work at the fun, informal sort of place that would stock free sodas.

(That said, it's not like keeping free sodas would have prevented everyone from noticing the changing culture forever; it's just an emblematic change that is difficult to ignore, even if you rarely look up from the screen)

bmj2• 17 years ago

I see this point, and can understand it. I'm not criticizing people for leaving the company, either--merely saying that I would be less concerned about _that_ particular culture change. For me, losing my ability to work remotely would be a HUGE deal, and probable cause for me to look elsewhere for employment.

gvb2• 17 years ago

Sodas are a correlating effect, not a causation effect. Steve says "The sodas were just the wake-up call." (his emphasis).

The problem is not that the sodas are no longer free, the problem is that the company starts treating its "most valuable asset - its employees" as just another cog in the machine. As such, the company has started to transition from being exceptional to being average, and its exceptional employees leave to find another company which is exceptional, completing the transition.

pavel_lishin3• 17 years ago

So what you're saying is that you wouldn't miss the free things that you don't use?

Yeah, I probably wouldn't even notice if my company stopped handing out free goats once a month.

scj2• 17 years ago

I'm kind of confused on the timeline:

"Last week as a favor to a friend..."

"The best engineers quietly put the word out that they were available, and in less than month..."

While both statements can be true together, it would seem to me that "in less than a week..." would be more appropriate, and devastating.

I realize I'm just fussing over unimportant details though.

gvb2• 17 years ago

The second statement is referring to the four times Steve saw this happen in the past, in other companies. If his prediction is correct, the company whose board he sat in on last week will start seeing an exodus soon.

barrkel2• 17 years ago

You left out the bit in the middle:

"I had lived through this same conversation four times in my career, and each time it ended as an example of unintended consequences."

scj2• 17 years ago

I would agree completely with you, if the next sentence was "In a similar situation at a different company, no one on the board..." But without such a line, I read that as commentary based on previous experiences, followed by a continuation of the main story.

(I assumed that "the board" in the next sentence referred to the board in the first part, which lead to the continuation. This is re-enforced by using "This company" and "the company" which would imply that the author was referring to the only company introduced)

briancooley• 17 years ago

If the accoutants looked at free sodas and snacks as leveraged salary/retention bonuses, they wouldn't suggest eliminating them.

eli3• 17 years ago

My employment contract lists free sodas as one of the benefits, right next to health and dental. Probably one of the main reasons we still have them.

numair• 17 years ago

That's pretty amusing. You get health and dental benefits, along with one of the leading causes of health and dental problems... I know soda is considered holy water among many HNers, but for those of us who are highly health-conscious, that sounds a bit like the Detroit assembly lines with the cigarette vending machines.

silentbicycle2• 17 years ago

Free fruit works well as a similar perk, though not very many are caffeinated.

clistctrl• 17 years ago

my employment contract listed all you can drink star bucks coffee as a benefit. We used to have a credit card we would pass around, and you could go around the corner. After $18k a year coffee benefits the president purchased a star bucks coffee machine. Personally I like this a lot better, far more coffee.

Poiesis2• 17 years ago

An excellent point.

What I find strange is the insistence on cheaping out on the food I see a lot of places. Once you've commited on food, the incremental cost of healthy vs. cheap and crappy isn't all that bad, and keeps the premiums down if you're an employer subsidizing insurance. In any case, keeping employees healthy is in fact a good thing...

noonespecial3• 17 years ago

Outstanding. Using "jumped the shark" just never felt right for this situation. "The elves have left middle earth". A spot on perfect description of this sad and awkward phase all startups encounter as they grow to successful bigcorps. I love it.

jcl• 17 years ago

A minor flaw in the metaphor: Middle Earth doesn't have to compete with whatever the elves create in Valinor. Talented employees leaving is both a loss for the company and a gain for competitors.

pyre4• 17 years ago

That assumes that they move to competitors.

hugh_3• 17 years ago

Did Tolkein ever write any stories about what happened after the Elves left Middle Earth? They didn't seem to be doing a helluva lot of good.

snorkel• 17 years ago

I never expected employers to provide snacks and beverages but it is demoralizing when executives take away such perks but continue to fly first-class for the same cost as buying a month of snacks for everyone.

iuytgfghjmk2• 17 years ago

So for you there is a different breaking point.

Like when you have to clock in and out at lunch time, but work unpaid overtime and weekends.

Or when you lose admin rights on your own PC

Or you have to start wearing a tie.

For me it was when we had to start signing in and out with a time. Supposedly this was for fire safety, but never seemed to apply to VPs.

We worked on banking systems and often had to work all nighters while the bank was offline. The time tracking system couldn't cope with the concept of being on shift for >24hours - the HR people treated us like it was our fault. Their solution was that we all went out at 23:59 and signed back in at 00:01 and that would solve the problem WE had created.

gridspy8• 17 years ago

For me it was :

Generally working unpaid overtime for a long time and then during a quiet patch coming in early and leaving early (5-10 minutes early). I got personally told off by the team lead.

Having a virus checker on my machine that I could not remove on pain of huge financial penalties. It scanned every input, intermediate and output of my compiler and turned the computer into a sloth. Didn't help that the final output was 230mb in size (and had a translation step into another 230mb executable). I tried in vain to get exceptions added but to no avail.

These little things slowly chip away at you and you later realise that you left for the wrong reasons - but it is too late.

keeptrying• 17 years ago

Yeah I think the taking away is worse than not providing them in the first place. Humans tend to weigh loss more any other emotion.

sethg• 17 years ago

A certain VP I know once remarked that at one of his previous startup employers, he advised the upper management against providing employees with free coffee in the first place, because savvy employees know that losing the free coffee is a leading indicator for layoffs.

He said this at the engineering staff meeting following our day of carnage at which a third of the company was laid off. We also lost the free soda.

blackguardx2• 17 years ago

At the last company that I worked for, they didn't remove the free coffee but they took away the free napkins, sugar, creamer, coffee cups, etc. I was laid off two months later.

The coffee also got better right before the layoffs. In an effort to save money, they looked for a cheaper coffee source than the crappy business supply company they had been using. They managed to stumble upon a deal at a local coffee roaster to get cheaper coffee.

It was pretty good when made correctly. One of the worst things than can happen at a company is for someone who doesn't like "strong coffee" to be the first one into the office in the morning. Not putting enough coffee grounds in the filter basket makes coffee taste bitter and horrible. If you want weak coffee, add water to a strong cup. Someone eventually had to put up signs giving this same advice.

pwnstigator3• 17 years ago

The CFO failed to anticipate that humans are irrational, and that people will read all sorts of things into the loss of free sodas. It's not just an economic transaction.

I thought the sales point of "business" types was that they were good at managing the irrationality of humans.

dkarl• 17 years ago

Do you think the CFO who proposed this dismal change regrets it? She raised her standing with her peer group by proposing a popular cost-cutting measure, and they probably blame the engineers for the outcome, not her. They may even be glad to be rid of the engineers who wouldn't adjust well to big-company culture. Big-company culture is a culture of mediocrity and interchangeability, and the guys on top like it that way. They want all the initiative and excellence to be on their level of the company, so everything that happens in the company is due to their control. Google is exceptional in even trying to avoid that fate.

pwnstigator3• 17 years ago

I doubt it. Few people are going to mention the sodas during exit interviews. In fact, I think very few people are even aware that the sodas might be a trigger for their decision, since it's not about the sodas, but the show of loyalty.

RyanMcGreal• 17 years ago

> humans are irrational

It's not irrational to recognize that the kind of thinking that would eliminate free soda on the basis of narrow cost-benefit analysis is also the kind of thinking that would transform their beloved startup into a stultifying corporate bureaucracy.

mattmcknight• 17 years ago

Is it really irrationality? If you are taking away a benefit, that is like a salary cut on something you were getting tax free.

The reality is that it is revealing of a CFO attitude, let's take away as much as we can from the employees to help the bottom line. CFO's should first focus on growing revenue, not cutting benefits.

mattm2• 17 years ago

This is why, when any new idea is proposed, it is important to look into the downsides. Every idea, no matter how great you think it is, has a negative side. People making important decisions at companies should always try to come up with the unforeseen consequences and compare it to the benefits.

umjames3• 17 years ago

I work for a non-profit where, to cut costs, they initially took out all the water coolers. When people complained, they gave us one water cooler per building.

I'd really like to be able to say that this would make people start leaving, but no one here is really going to do that. I'll bet senior management knew (and was relying on) that.

Lesson learned: In startups, people are more likely to leave on principles. In big companies (even non-profits), almost no one leaves unless they're fired.

noonespecial3• 17 years ago

I work with doctors, in and around hospitals and clinics. This problem has reached epidemic proportions, especially in the US. Bean counters know that no matter how many perks are removed or how intolerable working conditions get, doctors simply won't walk away from patients. I'm sorry to say that this is being taken advantage of in the worst of ways.

Be careful working at a job you "believe in", it puts you at a fearful disadvantage.

umjames3• 17 years ago

You're right. I don't know about doctors, but I work in an IT department. You can tell that pretty much no one here "believes in" the job. It's just a paycheck. I think people don't leave for a variety of reasons, but passion for the work or the good that the work is supposed to provide is definitely not one of them.

hugh_3• 17 years ago

Another good example: academia. As of a few weeks ago, the janitor only comes once a month, and we have to take out our own trash.

modoc• 17 years ago

I worked at a very large company, which post-merger started rolling out various changes which negatively impacted our development group. $0.25 sodas, redbull, and snacks went to normal prices, release night dinners were cut, flex time became less flexible, etc...

While no one quit due to any one of those changes, it did change the place from somewhere fun to work to somewhere that wasn't fun. As a result about three months later a large number of the architecture group and other key people quit within a 1-2 week span. So while no one may quit the day the water coolers are removed, that type of change will lead to higher turn over later on, especially among the top folks, who can find a new job pretty easily.

umjames3• 17 years ago

That's true. It's also bad PR for the company. Disgruntled former employees will not recommend anyone they know to work at such companies for these reasons.

That might not seem to be such a big deal (as compared to an external, traditional PR problem), but if your best employees are the ones leaving on bad terms, then most likely the people they know are above average too. Now the company will have a harder time recruiting great people.

ZachPruckowski• 17 years ago

While no one quit due to any one of those changes...about three months later a large number of the architecture group and other key people quit within a 1-2 week span

Sounds to me like they put out resumes shortly after the cost-cutting, it just took a few months to get a better job.

alexgartrell2• 17 years ago

On the very first day of my internship at a very big corporation, they removed the free sodas. Even though this was only part of a large collection of cost-cutting measures, it sent the most clear "F*&# you". (There was a number of other fun things that they did, such as allowing certain groups to use their Engineering interns as QA people without ever alerting them that this would be the case)

Needless to say, Carnegie Mellon students are heavily discouraged from working there by those of us who screwed up, and I definitely think that the huge dump they took on their recruiting pipeline has affected them negatively in the quality of people they'll be able to hire.

endtime2• 17 years ago

Do you mind saying which company this was?

alexgartrell2• 17 years ago

Cisco

foulmouthboy• 17 years ago

I think part of what would irritate me here is not just that they've taken away free soda, but they're now actively charging me for it. I wonder if it would've come across better if there just wasn't any soda offered in the office anymore.

Maybe it's totally illogical, but I'd be more irritated with the idea that the company not only took away this perk, but is now trying to make a profit off of it.

Zot95• 17 years ago

No, that (removing soda as an option) wouldn't go over well at all. Forget the idea of being offended, the practical matter is that soda is no longer an option... or at least a convenient option. You may as well take away the coffee as see how that goes over.

brown9-2• 17 years ago

I just want to say I really love this analogy.

msluyter2• 17 years ago

I went through this transition once. Initially, sodas were to be .50$, but that caused an uproar and price was quickly reduced to .25$, where it remains today. It's one thing for sodas to not be free; it's another for them to be a profit center.

Aw well, at least coffee is still free.

elblanco2• 17 years ago

>Some had already been irritated when “professional” managers had been hired over their teams with reportedly more stock than the early engineers had.

I'd say this was the main reason. The original employees had already proven they could manage and grow the organization from 0->even, and hadn't slowed down expecting to move the company from even->profit.

Now they have "supervisors" who don't know anything about the business or technology, shoved in on top of them, who's only role is to act as liaison between them and the corporate officers.

Bristling at the lack of corporate loyalty shown to the people that made the company happen, those people leave. The calculus is really very simple.

I've seen this pattern happen a number of times, and the usual result is that these new managers show up, make poor decisions (because they don't understand the business) cycle out (taking their stock with them), repeat 4-5 times until a manager shows up who is so inoffensive that the remaining engineers simply end up running the show in the end anyways and the manager just shows up to weekly meetings so she/he can liaise with corporate.

In the meantime, the company stock has diluted as it fled out the door to the past managers, the company lost most of its senior engineering staff, forcing them to promote lower level, less capable staff to senior positions or to hire externally (again people who don't understand the business further exacerbating the vicious cycle).

BerislavLopac7• 17 years ago

Agreed. It is my understanding that the best companies are led by their original founders (cf. Apple, Google, Oracle) or by people nurtured for years to become their leaders (Microsoft, IBM).

jimbokun3• 17 years ago

I would put Microsoft in the former group. It was one of the best companies when led by its original founder. Now, not so much.

elblanco2• 17 years ago

I think Google (and companies like Google) has learned this lesson well.

As an organization, it appears to be focusing on keeping as flat of an organization as possible. In addition they just simply cut to the chase, and hire middle-managers purely to act as liaisons rather than drivers, and save themselves the couple years of failure they are bound to endure while a new division gets organized "properly" (as in the old way).

This has bad sides too, I've heard from numerous people that, when compared to other organizations, most of the engineers in Google have a very hard time understanding what their managers actually do. Additionally, it also can prevent unified visions from flowing down from the top in as structured a process as you might see in a traditional organization.

But we now have more than a decade to observe companies like Google applying this sort of obvious management philosophy and now have lots of lessons learned we can apply going forward.

I don't know enough about the internal organizational structure at Apple and Oracle, but I'd wager they are much more like the traditional management model than Google's semi-flat structure. Apple in particular is likely a very hierarchical organization (just a guess) due to the necessity in carrying out Jobs' vision.

netcan4• 17 years ago

You are taking the story further then it really needs to go.

There is really no reason to assume that these managers are not a net gain for the company. I dislike the fact that a storyline where managers/business guys are the root of all evil can always find some takers. It's silly.

Changing from a 5 person team to a 50 person team is tricky. Adding hierarchies & middle managers is potentially problematic. Moving from an engineer only company to a company that also has a CFO and an HR guy and such is also tricky.

This is all part of the story. The simple story is dumb. Just as dumb as the spoiled silicon valley rockstar story.

vii• 17 years ago

We all like free stuff, but there is no demonstration that the company was actually harmed by saving the money on free drinks. Did having the early engineers move on have a significant negative impact? Apparently not, or it would have been mentioned in the article. . .

After all, you could hire them back if you offered them enough, and you'd do that if they were essential.

Maybe it was in fact better to replace them with people happier working in a medium sized company.

isleyaardvark• 17 years ago

Having workers move on always has a cost, generally called retention costs/turnover costs. The employer has to go through the hiring process again. The position may remain unfilled until that's done, meaning your team is short on personnel. You have to train the new person, even a skilled hire needs to learn the particulars of your business. (That's one reason why employers look at how long you were at previous jobs, to avoid that turnover.) Depending on the position, the company could lose 1x to 1.5x the employee's yearly salary, sometimes more.

And if you're trying to "hire them back if you offered them enough", that rather negates the point of trying to save money by eliminating soda, doesn't it?

potatolicious5• 17 years ago

> After all, you could hire them back if you offered them enough

This is typical HR thinking, and is only valid for a certain demographic (i.e., the people on the mid-to-low end of the bell curve). In my experience the absolute top-level engineers cannot be retained with just money.

Let me put it this way - you're an ace engineer with oodles of experience. You are in high demand, and if you were unemployed, you probably would have recruiters banging your door down by week's end. These are the "top talent" that all companies claim they want to hire - and they will make top dollar regardless of where they go.

Having known some of these people, the motivator is not money, because money is not why they do this, and honestly they're swimming in it already. To hire these guys you need to do something more - a great working environment, a kickass team, a sane management structure, etc etc.

Money can only motivate someone so far.

JoeAltmaier2• 17 years ago

Yes, money will make a certain character swallow their pride/morals: a prostitute. Anybody with self-respect will have other reasons for taking a job. My old manager said "Nobody every quit over money". Well, he managed high-end Engineers, but you get the idea.

cmos2• 17 years ago

If you look at the energy costs of a vending machine it's actually cheaper in some cases to have an efficient fridge with soda for free. (at least back in the day) The vending machine company often doesn't pay for power, so they have no incentive to cool the soda efficiently.

A nice 'interim' way of making a change would be to have a $.25 'donation' for each soda which eventually goes to some animal shelter, which would then be a tax writeoff.

CFO's will suck the lifeblook out of a company if nobody stops them. That is their job. Shame on the others for letting the CFO mess with their culture.

InclinedPlane6• 17 years ago

The big cost here is likely to be labor. When you give away free sodas you have to pay someone to keep sodas in stock. When you sell sodas you can even sell a contract to a 3rd party to restock the machines. This is why free sodas are fairly rare, because soda machines are a money maker for the company and involve fewer employees on the balance sheet, whereas free sodas rack up all of the costs of an employee (salary, taxes, benefits, etc.)

On the whole it's probably a silly tradeoff, since the benefits to employee retention of free sodas almost certainly far outweigh the comparatively minor costs, but if you just look at the balance sheet it can be awfully tempting to get rid of.

cmos2• 17 years ago

true - at my old company we insourced it. One couple choose to maintain a small store with soda's and candy and fruit from a warehouse store. It made enough to keep interest in it maintained, and kept the money stream in the company.

Then people feel less bad about paying as they know it's not going to some vending machine company, and they can also request healthier snacks.

gaius5• 17 years ago

At my present company the free sodas (and beers, on Friday) are simply delivered in pallets and teams take a week at a time to be responsible for the fridges. Peer pressure is enough to make this work. There was the time Luke's team didn't restock the beer fridge and to this day he's known as Luke Warm...

assemble4• 17 years ago

When I worked at Pepsi, they paid 'rent' for keeping a vending machine somewhere. The rent was based on location, power usage, etc.

munctional2• 17 years ago

Random question, but did Pepsi offer any vending machines that had Coke products?

I imagine at least a few Pepsi employees might like some of the Coke brands (e.g. Dr. Pepper).

SandB0x• 17 years ago

I've been in an office where the free fruit was removed. Towards the end of the afternoon I normally get quite hungry. With a bowl of fruit I would silence my stomach rumblings for an extra half hour and get some more work done. Without - screw it - time's up and I'd rather go home to cook.

nwatson• 17 years ago

A company I worked for in the south-bay area decided to order fruit from a "farm fresh office fruit delivery" service. I don't know how much the delivery company charged.

It worked well for the first several months. The delivery company brought a wide assortment of fruit, many "standards" and also some more exotic varieties like papaya, kiwi, etc. Over the months though the apples took a larger and larger portion of the delivery. And the exotic varieties disappeared.

People got sick of eating all those apples. We canceled the service.

The company also made pretense of being "green" but used extreme and wasteful packaging.

flatline2• 17 years ago

> Over the months though the apples took a larger and larger portion of the delivery

I have to ask, was this over the winter months when many fruits are out of season?

lucifer• 17 years ago

Based on what he says, end of the free sodas is a lagging indicator that is significant only for the reason that it serves as a "wake up call" for the "heads-down" talent. Unless the talent is entirely clueless (which makes you wonder about the "superstar" qualification), at some point they will realize that they are no longer a good fit for the company and will leave.

So it seems the moral of the story is that hold off on sending overt signals to your employees until you have prepared for their (inevitable) exodus.

anonjon• 17 years ago

I bet I could save many times more than 10,000 a year by eliminating a CFO.

BerislavLopac7• 17 years ago

A bad CFO, definitely. And a good CFO would never cut that kind of corners.

A good CFO knows that a corporation's job is not to save money, but to earn it.

jchonphoenix• 17 years ago

Interestingly enough, the same theory applies to recruiting and internships.

I was part of IBM's premier internship program (Extreme Blue) last summer, and of the 3 best developers in the lab, none of them wanted to work for IBM.

One of them actually cited "no free coffee and soda" as his reasoning.

Goes to show that this applies to recruiting as much as employee retention.

derwiki3• 17 years ago

They took away our free popcorn at Silicon Valley Lab. It was demoralizing.

xel02• 17 years ago

I think the main issue at heart is the desire that every human being has in controlling their environment.

I say this because I just read in a book (A Drunkards Walk) how seniors in a home who could arrange their rooms the way they liked and could choose a plant to take care of were measurably happier and lived longer.

Restricting machine names, removing snacks, clocking in and out these all contribute to a negative environment.

Which employee (all other things being equal) is more likely to burn out: a) Diligent and responsible employee is essentially free to do what they need to do to get their job done. b) Diligent and responsible employee who gets shuffled into a 'highschool' scenario: hall-passes, attendance reports, dress code.

Obviously some places feel they require these restrictions. Maybe in a large corporation you'll end up hiring employees who you can't trust to show up on time, etc. But isn't that also HR's fault?

Scott_MacGregor2• 17 years ago

For about the same price as the quarter eating vending machine, a 7-11 style soda dispenser could probably have been installed and the price per soda would probably have been around 2 cents each for a big gulp size. It is very cost effective, much better than bottles or cans. It might have been viewed as a step up in benefits vs. a takeaway. Pennywise, pound-foolish.

http://www.sodadispenserdepot.com/dispensersused.html

flatline2• 17 years ago

Having worked on and off in restaurants over the years, you have to clean these things nightly - and thoroughly - or else they get disgusting very quickly. That's the biggest problem with most of this kind of thing, espresso machines too. We have a single-serve automatic coffee maker right now that's not supposed to require regular cleaning, it's a little better about it but it can still get really gross.

JoeAltmaier2• 17 years ago

Significant: hundreds of posts on this topic. Obviously the social situation is vitally important. Corporate drones will never get it, so one solution is to never hire them. Look at W. L. Gore & Associates, Inc, they do (used to do?) it right.

rythie• 17 years ago

Next step in those companies is that the managers start having meetings in fancy hotels costing a lot more than that small saving.

The Elves Leave Middle Earth – Sodas Are No Longer Free

Related Stories