I feel like it’s a common script that most good companies eventually fall to short term focused management types who are happy to shred the company as long as they get their golden parachute.
Why does this seem to be the case? If you wanted to build a company that was more immune to this sort of thing how would you go about it? Examples and counter examples of these sorts of companies would be awesome to hear about.
It starts with a staff shortage while scaling up, or a small project that current employees don’t have capacity for.
The execs have a decision, find and hire a long term employee(s), train them up, make sure it’s a good culture fit, and pay their benefits and compensation
or get a contractor firm to fill seats and pay the contract.
It’s all downhill from there once they pick a contracting firm.
The contracting firm is a Trojan horse for the short term philosophy, while also eroding away the skill pipeline of raising juniors to senior talent so the company eventually has to keep going back to firms.
Instead of scaling up and building the knowledge pool as the company grows organically, they want to massively scale up and down and cycle through many people and skim the good contractors off the top. But this does not work.
The bad contractors overflow the org with tech debt. Seniors don’t have juniors to train, nor do they work on the core stuff to keep their skills. The seniors and good contractors skimmed off the top turn into contractor babysitters. The juniors don’t exist. The seniors eventually turn into managers or leave for greener pastures where their original skills are wanted and respected and fostered.
Eventually the company is left a husk of past talent and mountain of tech debt, and no in-house skill to turn things around, so the options are to stay with contracting indefinitely or start at ground 0.
Combined with not increasing wages to match cost of living and inflation, not giving bonuses when there profits, and now you’ve got most of corporate America with their burnt out workforce skeleton crew.
It’s the way the system is set up to work. Nobody cares about the stock price of a public company in 10 years - rather, everyone cares about the next quarter results so they know whether they should sell or buy or whatever.
It’s the stock market that fuels this short term gain mentality. You don’t see this happen as much for private companies.
don’t hire management externally. search loyal long time staffers who want to be promoted. don’t just promote them; make sure they want that change in their tasks.
some employers think promoting staffers to management removes a person who is good at their job, but some become fed up and bored and will leave anyway, so might as well promote them. signs are, when they ask to work in a different department/position; it means they are loyal and want to stay, but are bored/frustrated with their current tasks.
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Great to hear! I guess others who are not in leadership roles would like to hear more about guys like you, and would like to know that some of you are also taking the time to teach other leaders take a different approach to work management and leadership culture.
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Short Answer - Money.
Long Answer:
Money and Greed :p
But in reality, it’s usually just money. Ultimately if a company has decided that it’s sole purpose for existing is maximization of wealth for it’s owners, it will inevitably tend to go to the traditional business routes and hire executives who are educated in doing exactly that.
Technology companies in particular are prime for that because everyone hopes to eventually either become the next Apple/Microsoft, or be bought out by them. It’s fast, short term and big money.
Only time in my career I was laid off was because of this. Brother owners had been running their business for 40 years very well and very employee friendly. We got lots of bonuses and pay outs based on revenues and was an awesome place to work.
one of the 3 died and so the other 2 decided it was time to retire, and they did exactly this. Went out and hired a CEO who came from a reputable business school, who has done nothing but “be an executive” since graduating, and was purely a sociopath.
within 3 years the company was a horrendous place to work for. our bonuses nearly all disapeared, or started getting pegged to arbitrary company performance standards and other bullshit. by the end of 3 years 30% of us were then let go.
All because this shmuck’s primary objective was “maximize the value of the company above all else” and for him, that meant going after the employees. Since we released ZERO product in those 3 years since he took over.
Incentive structure. Let’s take a simple real world example I have dealt with.
Me: look I like your software but you got to work with me on this price
Sales: well I can’t really bring it down that much
Me: hmm how about the support contract part? Looks like we get three years. If you could make it ten I could spread the cost over ten years which will make it hit my budget less hard.
Now the sales guy has a choice. Make money today and get his commission hurting the company down the line or maybe not getting the sale. Keep in mind it isn’t like the company is losing money, they are just not getting as much as they want, or at least that is what he will argue to himself.
This is a small example but I think it illustrates the point. The incentive of the individual in a company do not have to align with the company and even if they did the company today takes priority over the company a decade from now.
Short answer: tech companies are still companies doing business, so they hire business people who do stupid business things.
