The future of work: What happens when talent trumps capital?

http://crashdev.blogspot.com/2011/10/future-of-work-what-happens-when-talent.html

by turoczy • 15 years ago

77 24 15 years ago

crashdev.blogspot.com

troels• 15 years ago

I don't think it's quite that simple. The overarching problem that big companies face is not single, hard knots, that can be solved in isolation by an outside team of experts. The real problem are with infrastructure and even culture. Big co. traditionally treat IT as a suppirtive function. Unless they start thinking IT as an integral part of the company's processes, nothing will change.

johapers• 15 years ago

I think it is an interesting scenario, but I don't think that every competent software engineer will want to start their own business, even if the capital cost is zero. I believe that even most of the competent people in the world likes a safe employment where they are challenged. So maybe there is a middle ground somewhere.

sdrinf• 15 years ago

In circumstances, where the means of software production outweighs the readily available business intelligence (see: every "Show HN" poster, ever), largecorps posting their pain-points might be sufficient alone to get things started. Savvy engineers, armed with some knowledge of customer development, can use this to kickstart problem validation, with a significantly higher probability of turning into a viable startup, than the de-facto "let's make a better mousetrap" way.

lsc4• 15 years ago

>the best creatives would rather start their own company than work for someone else

I do not believe this is true. There are many very good technical people who don't mind running businesses, but my experience is that the best technical people? they don't want the headache.

The best technical people I know lack the business/social skills to negotiate what I think their maximum salary as an employee would be, much less the ability to run a business.

We can't all be polymaths.

wccrawford• 15 years ago

That's true to a point. But most companies aren't willing to treat their top talent well enough to keep them. There comes a time when running your own business is less headache than dealing with a bureaucracy, and they go do that.

But again, I said 'most companies'. Some of them have a very clear view of the situation and make sure that talent is happy and unwilling to move to another company, let alone start their own. And I think there are more of those companies all the time.

And to be fair to the rest, they probably can't afford it.

lsc4• 15 years ago

My experience has been that top technical talent doesn't want to focus on non-technical things, like finding a new job, or even maximizing their income as an employee, so I think keeping them happy has more to do with how you feed them technical challenges and how much freedom you give them (and how you give them that freedom) and how valued they feel than with how much you pay them. I mean, if you pay them so little that it's a problem, they will deal with that problem, but after that? yeah, I don't think that compensation is as important as you say.

My experience has been that the people who really focus on maximizing the money are folks like me; I mean, I'm no idiot, but I'm certainly nowhere near the best of the best technically. And even me, I'll choose freedom over maximizing my short-run income.

dextorious• 15 years ago

"but my experience is that the best technical people? they don't want the headache."

Exactly. From Alan Kay, Brian Kernighan, Rob Pike, Guido Van Rossum to Linus Torwalds the best technical people could care less about "starting their own company".

NY_Entrepreneur4• 15 years ago

You seem to be saying that "the best technical people", because they are so good technically, are, then, necessarily less good than others at "business/social skills".

It's an old myth used by people without technical expertise to put down technical people. The put down is quite general with a cute twist: The technical expert is painted as good ONLY at the technical topics and is poor at EVERYTHING else including even ordering lunch. It's just a put down to win in competition within the organization. The usual way to avoid such a put down is to 'fit in', 'go along', and 'don't stand out'.

BELIEVE me, becoming a technical expert does not somehow ruin a brain for other work.

It is true that some technical experts don't bother with 'social', etc., but the issue is desire and not ability.

lsc4• 15 years ago

I know it doesn't ruin a brain for other work. I'm a technical person who later in life learned some business and social skills.

But you know what? I'd be a better technical person today if I took the effort I put into business and social skills and instead put that effort into becoming a better technical person. And I'm never going to be as good of a social person as someone with similar innate ability who started seriously practicing at an earlier age.

If you can win in competition within your organization through putting down other people, your organization has bigger problems. I suggest finding a new job, or, as the article says, starting your own company.

mark_l_watson• 15 years ago

Totally agree with you. Sometimes I dream a bit about having my own company, but when I look at the hassles the owners of my 3 customer companies have, I am grateful that I get to work with 3 groups of talented and interesting people, potentially learn 3 times as much on the job, not as many hassles, and have a "diversified" work base. I won't get rich consulting but I still count my blessings.

6ren• 15 years ago

> spectacular business failures over the next decade as the incumbents who fail to engage the "technical creative class" are eviscerated by nimbler and more tech-savvy operators

Sorry, this is encouraging for us here, but I think it's silly. Clayton Christensen studied why strong incumbents fail. He found again and again that incumbents were the best at adopting new technology, even radical architectural changes, provided that the technology gave an improvement that was valued by their customers.

They failed when the new technology wasn't valuable to their customers. Even when they developed the technology in-house, to a level of excellence, it didn't help them - if their customers didn't want it. The reason it eventually caused them to fail was that other people did want it, and firms grew up to service them. Eventually, the new technology improved enough so that the incumbents' customers also wanted it - but they bought from the new guys, who had by now become the "incumbents" for that technology, and had all aspects of the business worked out (engineering, product design, brand, advertising, channels, distribution, support etc).

It will be the same here: if incumbents can harness new technology to serve their customers, they will do so. If they are fighting for their lives, will put their massive resources into play to secure the necessary technical talent.

And the danger that is hard for them to fight: other firms serving different customers, with technology that one day will be good enough for their customers (but not yet).

e.g. target people who cannot afford the incumbents' product, with a product that's not good enough for the incumbents' customers.

e.g. target people who can't use the incumbents' product in a specific situation, with a product that is not as good as the incumbents' product in the usual situation.

e.g. target people who lack the time, skills or expertise to use the incumbents' product (i.e. not worth the hassle), with a product that is not as good as the incumbents' product for their customers (who do have the time, skill, expertise).

This is the mechanism - avoid threatening incumbents, and you have a chance. Threaten them, and they will kick your ass (you will "provoke a competitive response"). It's not as simple as lacking technical expertise.

vtnext• 15 years ago

Except when a competitive response to your offering threatens the incumbents revenue stream. That's the one case an incumbent will be slow to invest in competing technology.

Swannie• 15 years ago

The toughest problems in large enterprises are not solvable by one or two guys. And these are the problems that interest me. Where implementation of OK software can save $100k+ a year, and implementing a good software solution: millions.

They can be solvable by a small team who raise capital, innovate, build a team, win some smaller customers, grow their sales... but by that point they are approaching 100 people and have been around 5 years.

That sort of success is around. I used to work for a company, started in 1996, which was acquired around its 10th birthday. That's exactly what they did - now part of a 20,000ish person company, they are now considered the incumbent (and all of their peers from the late 90's have also been aquired!).

viandante• 15 years ago

You can acquire as many top talents as you want, but if you don't look at your customers and their real needs you go as far as with a group of bottom talented engineers.

The real problem big corporation face is that they don't even think there is a problem. If they can't see the holes in such things as, let's say, SAP, how can you even think to apply a better solution? And even when you manage to convince them to see IT as a strategic part of the business, even there, you don't neew top talents. The situation in corporations is so bad that almost any decent programmer whose brain has not been killed by corporate software 'values' can bring something to the table.

ianterrell2• 15 years ago

> Those that failed to spot this trend early and lack a native culture of technical competence have very little hope of hiring the talent they need to survive, no matter how much they offer to pay.

When your argument relies on developers' not being able to do math, it's not very convincing.

cliftonmckinney• 15 years ago

Less a matter of math and more of culture, IMO.

Large organizations are, for the most part, slow to change, and they tend to treat all "talent" in a similar way. They've been able to get away with this for technical talent for some time because the grass wasn't greener on the other side. Now, and for the foreseeable future, it will be.

Many large organizations (in my limited experience having worked for two non-tech focused Fortune 100s) value years experience over real experience and talent, have a stratified (and slow) system for promotions, are wary of young people making critical decisions, are not meritocracies, and are not really champions of the methodologies/technologies that most of the startup world has adopted for years. Each of these things are working against them in a major way.

In short, it's about more than the paycheck, and in the current environment that's especially true. Large corporations have to be willing to adapt and make the changes necessary to adapt to this fact, but their slow moving and old school cultures won't allow it. It's going to require a change from the ground up, and only the most progressive organizations will embrace this fact. But, then again, if they're progressive, then they're probably one of the few that don't need to worry about this issue.

ianterrell2• 15 years ago

Your points are all valid, but still: developers won't overlook that for $200k? 300k? 400k? 500k? 600k?

zwieback• 15 years ago

I think we're in a phase right now where small companies absorb a lot of the top talent but many or most of these companies will fail and eventually some of the really good people will be available for larger companies again. I can attest, though, that hiring for mega-corps like the one I work for is very difficult.

All this talk about how large companies are so horribly incompetent, etc. is hogwash. I think it's just incredibly hard for a large organisation to solve their inherent problems. From what I can tell the leaders generally figure out exactly what the problem is but are somehow incapable of solving it. And it's not a matter of salaries or benefits alone.

NY_Entrepreneur4• 15 years ago

For the changes the article is predicting, for at least 20 years there's not even as much as a weak little hoot of a tiny chance of the change happening to any significant extent.

It's an OLD story with a very well known outcome -- the change struggles, dies, and doesn't happen and people give up.

And the reasons are very well known:

(1) Downside Only.

Broadly in companies, people in middle management are evaluated very strictly on very specific criteria. Basically for a job description, a superior writes it and the subordinate is to DO IT.

The norms for nearly all the company and especially for middle line management, are rock solid that the job descriptions never require doing something, as in the article, creative to save the company.

So, no middle manager ever gets a negative mark for failing to do something creative, that likely no one in the company understands, to save the company. Doesn't happen.

A middle manager who sponsors a project that fails gets a really BIG black mark that can end his career. So, for sponsoring a creative project, there is a big downside.

Suppose the manager sponsors a creative project and it is successful, say, quite successful, even saves the company? What is the upside? Since usually the middle manager doesn't have an equity position in the company, there is little upside.

And if the project is seen as successful internally, then everyone else in management will feel threatened and will undercut, sabotage, gang up on, and otherwise destroy the career of the 'successful' manager.

Net, for a middle manager to sponsor a creative project has essentially only downside.

(2) Managing Creative Projects.

To do something 'creative', from the aspect of practical management within a large company, there are really only two approaches:

(A) The CEO sponsors such projects. However typically in a large company, the CEO is too busy to sponsor a project.

(B) The CEO sets up a 'creative division'. Such a division typically gets resentment and no cooperation from the rest of the company and, finally, gives up on helping the company and spends its time in make-work, junk-think, busy-work, nonsense projects. When the next CEO comes in, the group is axed.

(3) The Extant Business Model.

A large business has a successful 'business model'. Mostly what the company does is JUST execute that business model, that is, stay with their 'bird in the hand' and not go looking for more birds in the bush. Or finding good birds is difficult; they already have one good bird; so, they would rather nurture that bird than go on the difficult search for more good birds. To execute the business model does not require, in any very direct or accepted sense, doing something new and creative. So, net, creative projects are not welcome.

(4) Professionalism.

There is a role for creativity in the economy, but one important condition is a lot of highly respected professionalism of the creative workers. Such professionalism typically has some high formal education requirements, a strong professional society, professional peer-review, professional liability, and government licensing. Examples include law, medicine, and some fields of engineering. So far, 'creative software' does not qualify.

Without the professional respect, a creative worker is trying to paddle a small canoe up a tall waterfall.

Note: For law in companies, how do lawyers not get eviscerated by the rest of the middle management? One way is, there is a rule in the legal profession that any working lawyer must be supervised only by a lawyer. So, really, in companies, lawyers are insulted from the usual middle manager organizational struggles.

(5) How to Be Creative.

If someone has a great idea for something creative that will be valuable, then they should start a business. They should be the CEO of that business, the main source of creative ideas for that business, and the main sponsor of additional creative work for that business. The creative direction of the CEO becomes the 'business model' for that business.

Then the valuable results are provided to other businesses as products or services. If the 'creative' work can make money this way, then fine. Otherwise, net, f'get about it. Sorry 'bout that.

To some extent, the large companies change. So, something that starts off being creative and becomes quite successful can be taken up by the 'field' of the business as standard, accepted practice. A good example was using linear programming to manage an oil refinery. How? Each day at the refinery, you have supplies of crude oil available with an analysis of each supply. You also have the selling prices of the various possible products -- naphtha, gasoline, jet fuel, kerosene, motor oil, heating oil, etc. So, your mission, and you have to accept it, is to say how much of each crude supply to process and how much of each of the possible products to produce to make the greatest profit.

When this bit of 'optimization' first became possible, the gains were large enough that the work was accepted as part of the standard technology of operating an oil refinery. Indeed, the Chicago branch office of IBM was selling mainframe computers, at some millions of dollars each, for just this calculation.

Actually, however, it is still the case that much of the creative work is performed by specialized companies that supply their results to the refiners and not by the refiners themselves.

An "old story"? Right: The bones in the graveyard have tombstones reading applied statistics, management science, operations research, applied research, etc.

Net, a big company that might be 'saved' by some creative work in computing mostly won't worry because there is little chance there will be any competitor who will make any significant business progress from any such creative work. So, why bother? Usually the answer is, don't bother.

There is an example of how to make such creative projects work: Find a nice area and set up a research group. Fund the research group directly by the company and as approved directly by the CEO. Have the research group visit the operating groups and select problems to work on. The research group selects their own problems. The research group works on the problems on their own funding. Typically a project goes from two months to two years before it ends. When the research group believes that they have something valuable for an operating group, that group is contacted. The operating group decides whether to implement the project. If the project is implement, then the financial results are carefully tracked. For the first three years of implementation, half the financial gains are credited to the operating group and half to the research group. After the first three years, all the gains are credited to the operating group. With such accounting, typically only about one research project in 10 is successful in making money for the company, but the research group can return about $3 to the company for each $1 in the funding of the research group. When the research group goes for funding, the CEO always offers more money than the group wants, and the group always declines the extra money! That's one way to execute 'creativity' successfully in a company. It can help if all the general managers of the operating groups have Ph.D. degrees, say, in chemical engineering, and if the company is owned by the CEO.

medinism• 15 years ago

I would seem to me that if anything is going to change now is the time. Performance reviews are becoming more evaluative (is that a word?) of both upside and downside of not taking a particular action. Also, as competition within a company heats up, internal folks will look for outside talent to help their projects shine more. The argument you made could have been made for facebook, groupon, and a number of other startups/concepts that have been tried before and failed but "for some reason" are working now

SyedMuhammedAl1• 15 years ago

Hi.

The future of work: What happens when talent trumps capital?

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