These series of guest posts are written by the teams attending the Tetuan Valley Startup School 2010 Fall edition. This post is from formacionamedida team by Miquel Garcia.
“Big corporations cannot innovate internally, so to innovate they buy startups”
Alex said that on first week, and I, who has worked for a big one for many years, can’t agree more. I can only talk about what I know, big consulting firms working for the government. But what reasons are behind? This is my view:
A sum of individual benefits it’s not equal to the benefit of the sum of individuals. Given that principle, there must be in any organization some system that does what individuals don’t: assure the benefit of the whole group while individuals seek for their own. For countries, this system is called free market or planned economy. For companies it’s call incentive system.
I think the worst problem in big corporations, and I’m talking about IT corporations, is that there is no incentive to make the programs they are building better, and it’s the main difference with startups, where mostly all the resources are dedicated to make a better site. If you see a PPT of any big IT application, you hardly will see any screenshot, but they are plenty of graphics with boxes that really don’t have much meaning. In startups, you will see often a “Feature tour”, basically screenshots with description, or maybe a screencast (better). The applications we construct are the result of our work, and the main reason clients buy to us and not the competence. But if you take out the final user from the decision chain, this is not true anymore.
Clients, and final users in special, exchange money for some value, and in a software company the value is not other that the program they buy. That is, it does what you told your provider to do, it’s reliable, quick and with good usability. Software by its own its not the only value, you have some interaction with the provider (requeriment taking, help-desk). In an internet company, the application is the only value (have you ever called facebook support or have a facebook representative visited you?). But you use facebook daily and you like it.
From by experience, incentive system in a big company, and specially in a company working for the government, is disconnected from the result, and this is the number one reason you see things like project Diraya, where they have spent 60 milions of euros to create a system that is totally unusable and has to be replaced before being implanted. The reasons for that are both external and internal. Externally, and specially in the public sector, the final user, the one that receives the value you are producing, is often taken out from the chain of decision. The consequence of it is all it is wanted is a program that is barely usable for the task it is meant to do. More than this minimum will not be perceved by the decision maker, then it is not a perceived value and does not exists. The most of the times this humble target is not accomplished in IT projects, for internal reasons.
Internally the incentive system of big companies does not encourage a better result. For an individual, the benefit you take from the company is: promotion, salary and recognition. Recognition is related to the result, but not as you would thought: It’s directly proportional to the distance your job have from it, in terms of day-to-day interaction. Programmers are the ones that interact daily with it, and they deserve the less recognition. The more your job is disconnected from the reality of the programs we are building, the more recognition you will have. A project manager once told me after working for more than a year in a project that he has not entered yet in the program we where building. He didn’t see the need for the task he had in the project, and was proud of it. Contrast it from Steve Jobs, that goes down to the laboratory where designers are developing new products to use from its own hand and give her opinion. Result is the beat of the project, you can see a million of jira graphics but logging in an application and using it for 5 min gives you a view that it’s invaluable. Have you ever seen a doctor that does not go to see the patient? Even doctor house does it. From recognition comes promotion and salary rises (not always, but it’s another matter), then if you want them you must run in the opposite direction of the technical world. If you have a bunch of people running from having to have direct contact with the result (programs), how you can have better ones?
In big consulting firms writing code its not only undervaluated, it values you negatively. It’s a hell everybody is trying to escape from. But not only programming, all that it’s related with technology too. I’ve seen many times a manager or wannabe says “but i’m not a freaky” when a conversation goes too much passional about a technical subjet. I imagine that maybe in tobacco or guns industry happens the same, we are all trying to forget what we are building ultimately.
