I'm surprised they didn't look at Walt Disney for how to run a successful creative company. His ideas apply equally well to software as they do to the arts.
I've been watching the documentaries on Disney+, particularly The Imagineering Story (great doc BTW). They talk about the history of the creative side of Disneyland.
What you learn is that when they are simply given a budget and told "build" they thrive. When a CFO type gets involved with Disney, suddenly their output drops, because that CEO is asking what the ROI is for everything they do. A lot of what they do fails and has no ROI, and the people that work there start to worry about what their ROI will be before they start working.
When the CEO just says "We're going to spend X% on research, here is the budget" then they thrive again.
I think this is applicable to software. When an engineer isn't asked to think about the ROI ahead of time, they are left free to come up with novel innovations. But if they know they will be judged on ROI, they will take fewer risks.
This of course is all predicated on being a profitable company. You have to already have a good cashflow to have the freedom to say "just go create".
Within the last 5-10 years, Disney outsourced entire technology divisions using the H1-B visa program and forced employees to train their replacements for their last 90 days or forgo severance.
A former Disney IT employee testified before Congress, at times crying while he recounted the experience of being let go and having to personally train his replacement.[0]
Whatever Walt Disney was doing back in the day doesn't seem to apply anymore, at least based on your description of what a successful creative company looks like. To me, this looks ruthless and manipulative.
Throwaway because I wouldn't be surprised if Disney retaliated because of this post.
As a person who recently joined the Disney org not by choice, I wouldn't wish Disney on my worst enemies. Seems like OP bought into Disney's propaganda hook, line, and sinker.
Take the CFO types example and dial that to 19. You can't even buy a sandwich without Disney corporate asking for the ROI of it. Want to use a different programming language? An OSS library? A SASS vendor? Please get approvals from legal and finance with ROI estimates. Nevermind the yearly dance to justify why engineers you already have should still stay on payroll. Contracts and employment are cancelled by default at the end of the year unless management makes a case on ROI for every head. Software projects to them are like movies, once it's "done", the people involved can kindly fuck right off.
This isn't just limited to the technology side, I have friends throughout the creative side in both film and parks divisions. Every hour of their time has to be accounted for and approved up the management chain, every project must be forecast with sufficient ROI before start, and will be cancelled without notice the moment it there's a hint of missing expectations.
Even getting a H1-B replacement is luxury that you have to fight for. H1-B is still more expensive than a contractor in a developing country under one of Disney's international divisions.
The magic of Disney is the boatloads of people who continue to _want_ to work for Disney despite all this.
You are very cool for speaking out like this, so I'll follow your example. A company I worked at went through the Disney Accelerator [0] and had an absolutely horrendous time of it.
> The magic of Disney is the boatloads of people who continue to _want_ to work for Disney despite all this.
YES. This nails it. Disney's unique capability is its ability to churn out its "magical" content while conceiving of human capital in this dreadful way. They've figured out how to extract beauty and precision out of people while not having to return the favor in any meaningful way. They treat their janitor the same way they treat their janitor's mop.
They seem to conceive of their customers in the same sort of way. When people buy tickets to a showing of a Disney film in theaters, how many of their customers realize they are also having their eyes tracked by Disney? [1]
>When people buy tickets to a showing of a Disney film in theaters, how many of their customers realize they are also having their eyes tracked by Disney?
Are they actually doing that anywhere? Your link just mentions that they patented it but doesn't say if it's been implemented.
This explains the recent Star Wars movies then. Well, possibly except one.
Belt tightening like that is usually the sign that the MBAs took over. This is fine up to a point except when they start running a financial services enterprise instead of ... whatever you'd call they had before. Animation media entertainment company?
I wonder when the rot set in. The creativity out of Disney is now matching Hollywood baseline and that has been dropping significantly. They're buying major franchies rather than creating them. I think this strategy is biting them. Too much financial analysis. They are losing the sharp creative edge.
Or is this my view, not based on insider knowledge, and completely inaccurate?
Oh, absolutely spot on. I remember tuning in to one of Disney's internal talks about how they make a movie, and they were so proud that they audited every movie scene to make sure they were min-maxing profitability on the scene. If the scene wasn't considered profitable enough (such as not enough product placement or focus on marketable characters), the scene would be cut (or even denied to be filmed if possible). They would do things like take all the scenes of a movie/script, critical or not, and stack rank them on profitability.
> Want to use a different programming language? An OSS library? A SASS vendor? Please get approvals from legal and finance with ROI estimates.
This is true of all of enterprise IT though. It's not due to "CFO types" getting involved, it's just part of operating at scale in a public company where your tool choices have an impact on long-term support and governance/controls. I don't begrudge technologists who are chafed by this, but it's inherent to the category and not particular to a single corporate entity.
It's more the severity and granularity at which they did this. It's definitely done by most enterprise IT orgs and there's good reason for it. Then there's what Disney does which blows past any level of reasonable.
Think: getting approvals for upsizing an AWS instance in accordance with AWS's recommendations on an instance class you're already using in an account already serving production. Adding a user to a per user billed SASS that's critical to the org (we had to seek approvals to add employees to Slack/Github/email, and they frequently got denied).
They will spend thousands of dollars in man hours to make sure you're not misusing a penny.
Found this comment really strange, I work at a far smaller company and not only would they ask that they'd be laughing at me the whole time while doing it. These aren't the sort of things even nimble companies take lightly and without a lot of discussion and review.
These would be things that would have to be escalated to an SVP or above to be brought to an equivalent on the business side. In just about every company I've had experience with, these type of decisions stay within engineering and rarely need to involve lower executives.
> The magic of Disney is the boatloads of people who continue to _want_ to work for Disney despite all this.
This sounds similar to game development in a way. You get individuals who are really passionate about the brand/products and are willing to work in unfair conditions because of it.
One could argue that both you and the parent are not in disagreement.
The extreme success of Walt Disney as CEO has created a huge company that is an unfeeling monster predisposed to owning everything and chewing up human capital when needed.
Yeah I think this is common when the founders of a company either pass away or their memory fades. At some point, you have 2 or 3 generations of corporate management with little of the original entrepreneurial spirit and creative risk-taking.
Disney died in 1966. Jobs died in 2011. Apple has a few decades yet.
This may be an understudied advantage of well-managed unionization of high-skilled industries. Many old European companies appear to have maintained a healthy corporate culture for more than a century.
And the management practices that allowed the creative culture to thrive weren't applied to tech and IT because the creatives were the "rockstars" at Disney and everyone else was the boring business side that supported them.
I think the takeaway for the tech side of things is what parts of our businesses are we not letting thrive because the engineers are the focus.
Or maybe it makes sense for the creatives to be the "rockstars" at Disney, and for the engineers to be the "rockstars" at software companies.
Companies should invest most heavily in the areas that are directly creating and discovering value, and outsource everything else to the greatest extent possible.
> What if understanding everything opens better possibilities ?
It does, but understanding is limited by time and money. In additon, the more humans you throw at a problem, the more complex solving adjacent problems becomes. A big org will not solve new challenges quickly or efficiently, this is why big orgs buy startups instead of having internal disruption programs.
While true and pretty awful, this is a bit of a non-sequitur from OP. Disney could still have had good creative practices that we can learn from, even if they do other terrible things.
I’d argue that has little to do with Disney as a corporation/organization and because humans are innately driven to create
Look around the web at the content being generated by people at home?
It used to take warehouse size buildings of people at tables sketching page after page of what were really long flipbooks, with huge machines churning to get it all together on reels.
Now 4-5 people, some nVidia cards can make something that artistically is miles beyond Steamboat Mickey and Snow White.
My kids don’t even know those movies exist. Precisely because of the points raised by OP you would look passed. Though I think you’d quickly see it’s mostly just people driven to create.
Disney is a draw to creatives that grew up on a lot of non-Disney created works Disney owns these days. A nice paycheck, not a source of creativity and inspiration.
How many more decades of Mickey, Marvel and Star Wars people doing the same old Mickey, Marvel and Star Wars looking things do we need? How creative.
Is IT a creative part of Disney though? Given that digital anything (until recently at least) was not really Disney's business and more of a support function, I don't see this comment as disagreeing with the parent one.
It depends on how broadly IT is defined. IT includes everything from updating Windows across the org to potentially the software engineers working on Disney+. But yeah, I suspect that the IT people being discussed here are strictly an operational cost.
I know a bunch of software engineers that used to work for Disney, specifically in their online content divisions, and they universally reviled that place.
The usual bad software engineering practices with overbearing management, unrealistic deadlines, etc. but also below market pay and benefits, constant pressure to lower costs and outsource, and just generally a very cutthroat business environment.
Like other "cool" companies, they cash in on their brand cachet to treat employees badly, because they should be honored to work for such a company!
Whatever "magic" there is at Disney is all marketing.
Like any company, it’s much better working in the function that drives their competitive advantage—supply chain at walmart, marketing at coke, etc. They get the management attention and the budget. Working in software at Disney is going to be closer to working in software at your average company, which isn’t fantastic.
That's true of anything! Engineers optimize for a living. $ + labor ($$) = Output. It works when you grow, but gets expensive when growth slows. When the accountants come in, that's when the business is settling for (by choice or by market pressure) whatever they have, a little cheaper.
You see this with big capital assets in your personal life like houses and cars. Check out a cookie cutter subdivision new house with "builder spec" trimmings. The house is $600k, so they'll put in a granite countertop and shiny metal appliances to check the boxes and get the mortgage approved. But the light fixtures, toilets, etc are "builder grade" crap that are $14.99 at Home Depot! In lower price developments, the developers will skimp even more -- one near my house actually stripped and sold the topsoil! Imagine the corners cut inside if they were harvesting dirt for $.
Brian Chesky says, verbatim, if he could be anyone, it would be "Walt Disney." Okay, here's a CEO who read a bio on Walt Disney, he's been aspiring to be Walt Disney for a while, verbatim, at least since being some guy at 3DID.
Is AirBnb profitable? Then? Now? Is it just really about saying the right stuff? Are they creative and innovative? Do engineers like working there? So what if they say yes versus no? Is it really about ROI versus not ROI?
If Brian Chesky says, as he frequently does, that he learned a lot about management from Walt Disney, okay, he did. No dispute there.
But you're talking about Walt Disney, you are speculating about CEOs who should be copying him, I found one for you. Go ahead and analyze that, Brian Chesky and his company.
Management performance is, and always will be, mostly but not exclusively explained by "I was around in the right place at the right time to concentrate returns on capital in my hands."
For every S&P 500 exec there are 6 Russell 3000 execs, most of them receiving roughly the same elite educations, learn of the same trends, representing a great diversity of businesses. S&P 500 median CEO pay 2019Q1 was $12.2m and Russell 3000 was $2.7m. Russell 3000 CEOs might be at worst 10 percentage points "less creative" than S&P 500 CEOs, but no way they are 4.5x less creative.
It matters little what you do, if the pie is big and you eat most of it you will be the fattest. This is also incidentally VC view of management and corporate strategy.
> Management performance is, and always will be, mostly but not exclusively explained by "I was around in the right place at the right time to concentrate returns on capital in my hands."
I agree with this statement. [1] seems to agree with it as well, finding no correlation between CEO performance and quality of MBA program or past successes as CEO.
Obviously those aren't the only two factors to consider what makes a successful CEO, but it's what a lot of people in society think.
If you are 10% better at something than the second best in the world (that is, you are the best), than you are going to get paid way more than 10% more. Even if you're not the best, 10% better than someone else is going net you a disproportionate amount of money.
The reason for this is that skill tends to fall along a normal distribution. As you get better and better, the number of people as good as you starts to fall at an exponential rate.
But, for your example, I don't CEO compensation in many cases has much to do with the value you provide. CEOs of bigger companies usually get paid more not because they are better but because there is more money that they can personally capture, since the companies they run are large.
And then there are CEOs that are incredibly compensated, like Cook and Nadela because they truly are providing incredible value.
Exactly. Creativity is incommensurable with developing best practices in an MBA program, going both ways - there are strong priors about the weights of factors in a model of performance, and creativity is basically impossible to measure.
My friend at Pixar says they've slowly dismantled all the good things and benefits at Pixar after Disney bought them. Disney+ was built by the acquisition of BAMTech I believe. Maybe they have more autonomy like AWS does inside of Amazon.
D+ was literally built by BAMTech using the same tech that powers HBOGo and MLB streaming.
I think the Pixar thing has more to do with their management, namely John Lassater, moving south to head up Disney Animation, which did extremely well when he took over. Apparently they're doing even better under Jennifer Lee, who took over for him when he left/was ousted.
"Pink" also brought us Dylan, Kaleida and Taligent. The old Mac team was pretty core to General Magic w/ IBM, Motorola and AT&T as partners. A lot of it was pretty good! But it suffered from a top-down "from on high" market introduction, and somehow never got traction. Which is too bad. (General Magic's mobile agent model also had some unfortunate dynamic security effects when an agent "traveled to a 'bad neighborhood' to compute on the results of a query, it wasn't allowed back into the gated-community good neighborhoods to deliver results. Large distributed systems got pretty unusable pretty fast. Unfortunate - because I liked the vision - and some super-smart people worked on it - and I was surprised they didn't catch that early on)
That still kind of making my point. The right product at the wrong time is the wrong product. Post 1997 Apple, there was Jobs, Cook, Schiller, Ive and Forstall among others that actually focused on shipping products instead of letting the “smart people” run wild.
All indications is that they balanced each other out as leaders.
If I remember correct suppesedly Walt said:"I dont get (stomach) ulcers, I give them".
But I fully agree on the CFOs spoiling the show: remember Tom & Jerry? There are (I think) 114 (great) episodes. Then at their creative peak the whole animation team was dismanteled, since they calculated they can make more money with reruns than with new content. Later there was a low quality reboot, though.
trying to move/migrate gigabytes of old emails that people stopped trying to sort/delete.
gsuite docs are another point.
Applications on one's phone that they are used to, not to mentioned all of the google service integrations that individually aren't too hard, but in aggregate much harder to work around.
I do think o365 is leaps and bounds better than gdocs, and outlook, even on android, is better than google's mail.
The last time I used Firefox for a few days, it wasn't bad, only a couple plugins I use regularly were missing, and that was difficult and evenually moved back to chrome.
I actually let myself fall into using my google or twitter logins across other sites... which was really bad when I was false-flagged on twitter, and after 5 days and 2 appeals, just deleted the "offending" post. I still say the person in question was a "fucking moron," and that it wasn't a call to action in any way shape or form.
And while I've started migrating some stuff away, the daily use isn't always easy.
Applications on one's phone that they are used to, not to mentioned all of the google service integrations that individually aren't too hard, but in aggregate much harder to work around.
Switching from Android to Google though is easy because no company serious about mobile makes Android only apps - not even Google.
Google also makes it easy to import and export documents from GSuite and Office.
As standalone software, Apple’s iWork equivalents are better than Google’s (yes their are web versions), not to mention like you said, O365 apps are miles better.
Google pays Apple a reported $8 Billion a year to be the default search engine for iOS. The profit from Android isn’t even enough to pay Apple.
YouTube is thought to be barely above break even and streaming music has horrible economics for the platform. Look at Spotify. Google Music is third behind Spotify and Apple.
Who pays for Google Photos? You get free unlimited good enough storage.
$23 BILLION over 3-4 years is a lot though! Since Apple isn't confirmed we can only speculate, and if you're right that's crazy.
What about Google cloud infrastructure and Sass that they deliver?
Possibly this and data across services is part of the package they sell to add companies? I don't think it's fair to compare between different companies. If they turn a good profit, then good for them.
Of course, not photo books are likely not selling at the scale of other products. Also, I meant Google One for storage, which I pay for, and you can buy photo books via Google Photos.
> What about Google cloud infrastructure and Sass that they deliver?
Around $10 billion in revenue and no telling how little in profit. GCP is a distance third.
> Of course, not photo books are likely not selling at the scale of other products. Also, I meant Google One for storage, which I pay for, and you can buy photo books via Google Photos.
If DropBox is number one by a large margin and can’t make a decent profit, how well do you think Google is doing? But that is also included in the $10 billion revenue for cloud.
How many of those 2.5 billion phones are $30 phones sold in India? How much money are people in the US spending on Google services that are buying cheap phones from one of the MVNOs? The only method that Google makes money from Android are Google Play and ads. They have a rev share with OEMs for the ads.
People who are willing to spend money, overwhelmingly by iOS devices.
I just watched a series of videos by Technology Connections of the opposite playing out at RCA leading to the failure of the CED video system. They hired a bunch of smart people with various science/engineering degrees from prestigious universities, gave them essentially free reign to research things, and all they ended up doing was floundering around for decades, not wanting to develop anything to practicality because that's less interesting than new theoretical research and is less likely to get them more published papers. Seems like you certainly need at some degree of direction and limitations on research teams.
The ultimate example of this is Symbolics, the company behind the General Lisp machine. PhDs controlled the place and they ended up wasting gargantuan sums of money on building the "perfect" Lisp machine. It's still probably the most advanced OS ever designed and yet it failed miserably.
Like all things, balance is required. Engineers and finance people need to be on equal footing, to serve as a system of checks and balances. The when either group becomes to strong, it spells doom.
It's usually the finance types that win these struggles of power though (I'm not exactly sure why), so don't have as many examples of engineers destroying companies. Though, I think Google might be a good example of flaky engineers taking over and the bad that results from it.
The big financial fuckups at Symbolics were done by non-PhD "business people" that got into company later on, especially certain big inflexible contracts on real estate. This turned out to be a giant anchor when a proper war chest would have allowed finishing Ivory replacement and/or actually delivering full scope of OpenGenera (version 2.0 doesn't even cover what was planned for 1.0)
Have seen those videos (quite good) and very familiar with the downfall of RCA, but not sure I agree with this take.
RCA basically set up an unworkable scenario and management did not heed the sunk cost fallacy to realize they were down the garden path. A stylus based cheaply made consumer electronic device with the technology at the time was pretty much impossible (and then of course by the time tech had advanced a stylus based system was totally moot). You could have hired manhattan project people and it wouldn’t have changed the physical/economic realities of what they were trying to do.
I got the impression everyone on the research team was more interested in publishing papers and going down obscure research than more immediately useful results. That kind of research has its value but I think you need more direction and a mix of more people that are more interested in making working stuff.
Interesting that you bring up Disney. My company had an organization go through Disney's training (I don't remember the name of it), and then later the rest of the company had similar training.
Some things have changed for the better since thing, but IT is still a cost center, which drives how projects are allocated. Until you get upper level management away from treating IT as a cost center, you can't really unlock the creative potential. Of course you have to have financial discipline, and one of the classic methods for that is cost based accounting.
If you aren't a software products or services company (engine of revenue), won't IT always be a cost center? If you are in IT at a bank, in retail, logistics, telecom, O&G, even trading, if what you produce isn't what you sell, then is IT not a cost center?
If you were the CEO at a retail giant, like Target, how would you account for IT's in/out budget and expectations?
I'm frankly amazed that Xerox PARC got away with being unaccountable rogues (with great unmonetized results!) for so long given that they didn't support the revenue side of the house one little bit. (Amazing place and time, though! And the director of the lab appears to have been a hell of a manager of unruly computer scientists!)
Counterpoint: 3D Realms. They made so much money off of Duke Nukem 3D that they never learned how to manage their business and burned all their money trying to make "the perfect sequel".
Here’s a look at how and why Valve lost their way and hopefully an indication that they might be on the path back to making great games again (although I personally think their new focus has more to do with competition to Steam from Epic and GOG sharpening minds).
> When an engineer isn't asked to think about the ROI ahead of time, they are left free to come up with novel innovations.
In the cases I've seen, given free reign the engineers were happy to focus their effort on their personal interests, such as writing everything in a functional language or developing byzantine microservices + CI/CD.
Seems quite presumptuous to assume those choices were not adding value. Would you be able to tell if they were?
Most importantly, as mentioned in the article, engineering teams need (and want) clear business goals. There is a huge chasm between having an expected ROI vs having no targets at all.
The very complex and ambitious solutions they engineered, are currently a nightmare to maintain, as it's hard to hire people who can understand them (thanks to the technologies being very new and/or niche). Meanwhile, the requirements were bog standard and there's no demand to be scalable, to have high reliability etc. The system could probably be coded by a bunch of interns and grads in whatever language they fancy.
I can only speak to engineering, but in my experience it isn't that simple.
An example: SpaceX vs Blue Origin.
SpaceX was actually founded 2 years after Blue Origin, but it has a significant technology and business lead. Elon Musk set ambitious deadlines and micromanaged some of the technology goals from the start, requiring deliverable products to be able to stay in business. Whereas Bezos still just infuses up to a billion dollars of his own money a year, and as a result has a more relaxed atmosphere and slower progress. The result is that everyone knows what SpaceX is doing, but only people on HN have heard of Blue Origin.
Caveats: Elon Musk's far more active leadership may have also played a role, while Bezos left leadership to people who probably did not fully match Musk's creativity and drive.
> and the people that work there start to worry about what their ROI will be before they start working.
This is it I think. People start basically self-censoring. The problem is that it's notoriously hard to predict ROI ahead of time. Many of the highest ROI projects look like long shots while many "sure thing" projects bomb.
You can see the result of this with Hollywood and its endless remakes, reboots, and comic book flicks. These are "sure things" and most do in fact make money, but the whole sector is sinking. I have zero excitement about movies anymore. All the interesting stuff is in serialized series and indie projects. I don't even pay attention to what movies are being released, and I'm not alone.
That’s an idealized version of how Disney has worked for decades that doesn’t match reality.
Disney is all about the “wheelhouse” where the various parts of the company work together to monetize IP - movie distribution, merchandising, home video, parks, licensing, spin off cartoons, etc.
Apple doesn’t let “1000 flowers bloom” either. Everything is coordinated from software, hardware, design, marketing, operations, etc.
Apple is actually a perfect example. Most of their employees are directed in what they do, but they also have small groups of people who are just handed money and told to make something amazing. Usually it starts with an executive who has an idea, and is then given budget to spin up a team to execute that vision.
I would vouch for Imagineering Story as well. Great mix of technical stuff that's awesome from a nerd perspective, while entertaining for the non-techies too.
i think for most software engineering, pursuing novel innovations is not the best thing to optimize. novelty can mean complexity and duplication. but i would totally agree with taking risk around giving people freedom to decide what to work on.
CEO's aren't failing software engineers, no more than software engineers are failing the cafeteria crew by using too much ketchup.
If they are failing, they are failing the business. There's evidence of significant problems in business/management philosophy, as the consensus is that you need to optimize for now, and later is somebody else's problem. That has nothing to do with software engineers.
Technology people sometimes get this worldview that they are the sun, and the universe revolves around them. Hate to break the news, but no.
There's evidence of significant problems in business/management philosophy, as the consensus is that you need to optimize for now, and later is somebody else's problem.
Dead on. I've seen boards of directors ask for fried ice:
Management: We haven't put adequate time into building a sales training program.
Board: Focus only on revenue this quarter. It's the only thing that matters!
Then next quarter:
Board: Why aren't your new sales guys producing?! They need to drive revenue!
Management: Uh... you told us not to spend time on training.
Indeed. Ultimately it's the (specific incarnation of the) shareholder model of capitalism that's at fault. Shareholders have ultimate control of companies, and their incentives are aligned all wrong (to the short term).
> Shareholders have ultimate control of companies, and their incentives are aligned all wrong (to the short term).
This is actually not true of individual shareholders; most individual shareholders are investing for the long term, because most individual shareholders are investing for a long-term goal, like retirement.
The problem is that most shares in most companies are no longer owned by individual shareholders, but mutual funds, and from the standpoint of an individual stock, a mutual fund does have short-term incentives, since if the stock's performance goes down the fund will just sell it and buy something else. The individual investors whose assets are held by the mutual fund, and who have a longer time horizon (most mutual fund accounts are retirement accounts), don't care about which individual stocks the fund holds or how often it trades them. So the longer time horizon of the actual individual investors is masked and only the short term incentives are visible to the individual companies.
I agree with basically everything you've said. I'd add: the system is such that mutual funds are able to make greater profits from the system by playing things in this way. This means that over the long-term, capital accumulates in these funds, further skewing the proportion of investment that is driven through these vehicles.
Ultimately, "long-sighted" shareholders should be able to outperform the short-sited ones, as long as they can retain control of the company. I wonder if there's any way to form a sort of shareholders union to maintain the control of an organization by shareholders who plain to keep stock for a long time.
The two-class stock structure (ala Facebook and Google) is one experiment in this, but being able to establish such a structure depends on investors' appetite for it during IPO-time.
Such an incentive problem is easy to fix. Simply put the people who do the work at the company in charge. Their incentives are aligned to doing the work well, keeping the business stable, and developing a healthy culture.
Nope, not that easy. Look at Scuderia Ferrari F1 team. In 2014 - 2018 the team principal was a business guy (Maurizio Arrivabene), whom was pushed out to make room for a technical guy (Mattia Binotto), whom led the technical work to bring Ferrari challenging the F1 title. And look at what happens now: they went backward from the 2nd best team to shared 5th-6th, burning a budget of $400M for a car that was a lot slower than their own version last year.
> "Technology people sometimes get this worldview that they are the sun, and the universe revolves around them. Hate to break the news, but no."
I've worked construction and at a manufacturing plant, and tech is a genuinely different business, with a different mindset than other businesses. Yes, they are failing the business, but they are failing the business in a new and interesting way, which is what this post is about.
Tech is the engine that accelerates business. Acceleration used to be slow. If you don't have an engine that accelerates quickly now, and you don't have a HUGE moat, you won't survive.
Can you give some examples of the mindset of construction and manufacturing businesses? It would be interesting to me, and I think to other people here too.
Construction and manufacturing are usually about cookie cutter replicas, with log degrees of customisation. There isn't a feedback loop in the manufacturing line to product development once you have a stable product.
This is roughly analogous to corporate IT operations. There's a set of standard services which everyone uses, and there's no innovation on the desktop by most users.
On the other hand, with software and R&D, the feedback loops are primary drivers of generating information (and value). This is why so many of us preach about "testing in production" for web services.
The core of these two philosophies is pretty much summarised by two books:
The Goal, by E. Goldratt (ISBN: 9780884271956 ).
The Principles of Product Development Flow, by D. Reinertsen (ISBN: 9781935401001).
Construction and manufacturing are very much about following defined instructions and processes and not updating or deviating from them without good reason. (Obviously there's a lot of Get Stuff Done too, where people ignore the above rules).
Manufacturing Management is also all about metrics and counting productivity. Trying to apply similar metrics to tech leads to things like counting developers lines of code or defects.
Well, for one, TPS is attempting to optimize the manufacturing of a fixed design.
With software the design-made-code, where software is what in automotive would be considered the design process is 100% of the cost, the shipping of bits is 0%. In automotive, it is more like 5% design vs 95% building the car, goes the other way.
When people apply manufacturing methodologies to design practices, it rarely works out. "Design" is messy, but people expect to be able to apply a manufacturing-like "LEAN" process to it. They are mixing goslings and goats.
a lot of "LEAN" is about making work pieces smaller. This not only reduces waste, but allows quicker reaction time when you do need to change something.
I don't know solution for the entire IT industry but can suggest something for Corporate IT:
New IT staff should be given grounding in Business Curriculum relevant to the Corporate's business / Team's mandate - this ought to organized by upper level of IT management.
Software Developers / Engineers working in Corporate IT tend to stagnate in terms of their careers once they hit the wall (wall = business knowledge).
E.g., take an investment firm and within it, say IT Department XYZ Supports the firm's Private Equity investment team. It is easy for Software Engineers in the team to code up and provide Tech. solutions however for complex business cases where advanced Private Equity knowledge is required, the Software Engineers have to rely on the Business Analysts or the clients themselves to do hand-holding.
I have only seen something like 1 in 10 Software Developers in Corporate IT willing to pick up Business knowledge beyond the basic business terminology. And this is why I believe the value of Software Engineers at Corporate IT takes a serious hit - from CEO / Board / Upper layers of Finance, it looks like the drivers of revenue are basically their finance folks (CFAs, CPAs, Investors) whereas IT are just a cost center to enable the finance folks to do their work (which is a very bad vision but that is how it looks like from their POV). In these cases, the only group from IT that benefits somewhat are the top IT management who act as the guardians of the IT division.
Another thing that works against IT folks in Corporate IT is self-criticism (critical of current IT culture, constant itch to reinvent self), constant need to associate with low-paid/ low-educated professions (factory line worker analogy, plumber mentality) and appearing far too casual. Sure, jeans and T-shirts and having eccentric/artistic personality is the culture spawned from Tech stalwarts based in Silicon Valley, but that mentality does not translate into rest of the World. Even if the Corporate's HR policies allows for dress-down environment, guess what - the HR and Finance People typically appear well polished in their appearance - they rather have nice office lunch rather than pizza and pop chow-downs and you can't deny that as humans (especially if the CEO and top Execs are non-IT), it doesn't leave a very favorable opinion about the IT staff.
It’s not just software, it’s like that for every industry. There are some, usually large, group of people whether in sales/marketing/operations/etc who aren’t particularly interested in the industry of their business but prefer to focus on the details of their task.
It’s not wrong or bad at all, but it does tend to be compensated less.
I agree that lack of business domain knowledge becomes a limiting factor in career growth for IT people at a certain point in non-software companies.
But I think that is an argument for working for a software company as the optimal career path for a software engineer (or founding one). It will help you to know more about finance as an IT guy working at a finance firm, but you will probably never be as valued as the traders.
I don’t really like the idea that Need, Belief, Opportunity, and Anticipation are the drivers of engineering as opposed to money and personal growth. I’m not surprised though because these guys appear to be Scrum Consultants who want to tell software orgs they can improve productivity by paying them for “training” rather than paying employees more for work.
Ultimately what I want as a software engineer employee is my own personal success. I actually identify a lot more with their “Business Management” step: I want incentives to be aligned and I will be motivated to do great work if I feel like I can share in that success. Yes it’s easier to get up in the morning if I’m working on something that’s overall successful, but that would be negated if I couldn’t get a piece of that.
This seems to fit into the more common trope that engineers are easily fooled into working for less pay than they should be getting through bullshit like “vision”. Even if I’m working on something cool I’m not going to be happy to just make someone else rich. If I only cared about solving a problem I would just write OSS.
I used to think this about myself (and I do still think money is a floor, not a ceiling). But I've come to realize that there are two monetary thresholds for me. A lower threshold after which more money doesn't bring me more joy, and a higher one (which is the real floor) which is compensation compared to others/the industry/the area. Although I try not to think this way, it's hard to feel recognized or appreciated when my compensation is much lower than others.
It's a continuum. I would just write OSS but for the need of a paycheck. I'm not fooled, I just don't care about money as much as I care about software, and so I put my time and effort into learning about how to optimize software, not money.
"Financial Management" step also solved an incentive alignment problem: it created a way for investors to cooperate with the organization.
But these two steps are different: the second one aligned the organization with its workers, but the first one aligned the organization with investors.
Assuming this trend will continue, the third step will align the organization with some other group.
Executives are shockingly idiotic about software development, and considering their business sinks or swims on the success of software in very very many cases, it is a major failing of MBA factories.
I actually consider software / IT management to be more important than accounting, and every MBA person takes finance/accounting.
I enjoyed this article very much. I'd add that if you truly want the freedom to be creative, you may have to opt out of being an employee and choose the founder path instead. This nicely compliments pg's "You Weren't Meant to Have a Boss" essay: http://www.paulgraham.com/boss.html
I opted out of being an employee and chose the founder path. I have very little time to be creative (the way I was, for example, when I was in graduate school or at Google).
For me, a large part of thinking creatively is about exposing myself to ideas outside of what I am actively supposed to be doing and then letting those ideas permeate through my thinking when I am working on what I am actively supposed to be doing.
Between talking to users, talking to customers, talking to investors, and perpetual catch-up on my product, I rarely find the space to think about things other than my business.
That said, we have definitely had dark moments that we came out of because of very creative ideas. It's just that creativity is nowhere near the top virtue required of a founder.
Thanks for the suggestion, didn't know about think weeks. Love the idea, and reading is the thing that I miss most - used to read a LOT before moving to the Bay Area. These days, not so much.
There is no reason to have a happy workforce when an unhappy workforce will do.
It's hard work keeping people engaged, everyone wants a different carrot. Everyone understands and fears the stick and it's easy to hire for - can you threaten people with a stick? Yes? Hired :)
We live in a wage slavery society with fewer jobs than there are people, on purpose.
It's not that CEOs are failing software engineers, it's that the current system of beliefs humans hold in sum, seems to be failing humanity as a whole (but then again, if we think this way, has it ever not failed humanity?). Consider children digging through trash for food while billionaires fine dine discussing AI and space travel. I don't know what them rich folks believe, but it's inconsiderate of most of humanity's pain it seems.
This post is atrociously bad. It seems like the author(s) are trying to come up with original ideas, but Steve Blank and Clayton Christensen have written much better works on this subject.
I agree it is poorly presented, which is why having others read and critique something is always helpful. That said, I don't believe it rises to the level of 'atrociously bad' :-).
The authors will come by and read this and dismiss it out of hand when you have a chance to help them get better at what they do (they recognize that failing to do something, in this case present their case clearly, can teach new skills)
So let's be a bit more proactive in the feedback okay?
The post bounces between background/foundation material and new material too rapidly. It can be over expository in background which may prevent the reader from connecting what background material/situation is being addressed by the new material. It fails to present a cogent summary of its thesis statement in the first paragraph, that comes in paragraph 3. Paragraphs 1 & 2 are nominally a problem statement in what reads as an obtuse jargon.
Now some of that is that the entire article feels like it is written for someone who has read all of their other articles and so there are many unexplained phrases which clearly have specific meanings. Statements like "I promise you, in its entirety, the following is something you’ve never heard before, and the ramifications of ignoring the advice herein most assuredly leads to unhappy software engineers." exhibit a certain hubris that can be off putting to engineers and that isn't a great place to start.
Why are you so angry about a blog post? Digesting ideas from thought leaders and re-stating them with a different angle is what blog posts are for.
I've read Christensen's work, along with other authors and came to the same conclusions that this author writes about, but I've never taken the time to put it into words like this.
Large corporations like Amazon offset tax liability with tax credits from huge R&D expenditures [1], and those can be "moonshots" or highly innovative products that change the world. The famous CEOs quoted in this article take full advantage of this and there is definitely room to get creative with how that money is spent.
A friend of mine working at <large tech megacorp> told me that it is not uncommon for them to assign product/eng teams to build novel, competing solutions to the same problem or product space, sometimes without even knowing about the existence of the other team(s).
Similarly, I've heard <other large tech megacorp> sends the green college new grads out to hack together products and innovate with new ideas as quickly as possible, and once they find product market fit, they hand over the project to the seasoned senior engineers to build it out at global scale.
These anecdotes might just be hearsay BS, but it does make me think: how creative can you get with R&D and who makes those decisions? In what ways do the CEO/CFOs play a constructive role in this process?
This article focuses on work-processes and thought-processes that can be thought of as clear, explicit, rational, and goal-oriented. That's an important topic, and I found the article interesting, if a little long.
They define Creative Management like this:
"Creative management is one of three dominant forms of value management. Its purpose is to establish a system of management that enables and motivates creative staff, such as software engineers, writers, designers and artists, to discover and realize new works of value."
It's an interesting thesis, but there a subtle nuance here, I think, which I would put like this:
For every clear, explicit, rational, and goal-oriented form of management, there are degenerate irrational forms, and Creative Management is more vulnerable to degenerate irrational forms than other forms of management.
Over the years, many of my blogs posts have gotten a lot of discussion on Hacker News, so some of you might remember my focus on irrational, destructive forms of management. In my book How To Destroy A Tech Startup ( https://www.amazon.com/Destroy-Tech-Startup-Three-Steps-eboo... ) I give details about two different startups that go off the rails because of the ego-driven nature of the decision making by top leaders.
But the point I'd like to make now is, compared to older management systems, which were somewhat more amenable to data modeling and feedback analysis, Creative Management opens the door to creativity, but also wish-fulfillment fantasy. (As a point of comparison, think about W. Edwards Deming and his very methodical statistical approach to reducing errors in a factory, and compare that to much more open ended process of inventing, say for instance, a sui generis interface.)
Please note, I'm not saying Creative Management is a bad concept, but I am saying it has large pitfalls for which we do not yet have standard answers.
Having said all that, there are some good books that have really looked at failures in the world of software, and ways the process can be improved. The books of Robert Glass are excellent, and I've posted a long excerpt of one of my favorite of his stories here:
Note to author: it might be worth moving the "How are CEOs failing software engineers?" section to the beginning of the article. With a title like "Why are CEOs failing software engineers?", the first thing i want to know is how the CEOs are failing. Only afterwards do i care about the why. This felt a bit like i was thrown head-first into a new framework for classifying types of management before I could figure out whether or not I wanted to learn about it.
Aside from the structure, really interesting piece!
Classically trained CEO's don't use the language of makers. They use language that describes cashflow, savings, and debt. They are accountants at heart (who are beholden to shareholders -- not their employees).
"In his late twenties, “James” was hired in a strategy and business development role inside a multibillion-dollar marketing and communications business. Early in his career, he was offered the chance to build out one of the new businesses. It felt like a demotion, or at best a lateral move, to be handed a blank org chart and a highly uncertain future. “It was zero revenue when I stepped in, and we built that business to $250 million,” he says. By building a new business from scratch, he picked up essential management skills, such as running a P&L, managing a budget, and setting a strategic vision — all critical prerequisites to becoming a CEO (over 90% of the CEOs we studied had general management experience). Thirteen years later, he found himself the CEO of a $1.5 billion education and training business."
>>They use language that describes cashflow, savings, and debt.
Without such language and understanding, founders will have a harder time sustaining their endeavours. Such concepts apply whether you're bootstrapping, taking investor funds, or just an indie builder.
As someone with 3/4 of their foot in management and one foot in the hands-on world, I am often surprised at how my viewpoint changes when thinking about the bigger picture. As an example, one of the things I personally own still as an individual is essentially our kafka platform- that means our actual brokers operations, our automation, monitoring, client availability, etc.
We provided a really nice walkthrough to get you going as a quickstart. The whole point was originally to keep it simple so that you have to be thoughtful about the settings and tradeoffs you make in terms of reliability vs performance. I didn't want to be overly prescriptive in what and how teams use functionality like transactions and idempotence.
But we find, time and again, people get this wrong. They don't look at things like delivery reports, they don't set timeouts that make sense, they often don't even think about their replication factor. I pushed against full fledged client examples because there really isn't a one size fits all and I didn't want people to copy and paste without thinking about what they are doing.
The reality is, I am fighting a war on drugs. People want things to Just Work, and don't have the time to sit down for a day or two and read a book on kafka concepts (which we provide for free) and just want to get things done. We will repeatedly be involved in "outages" because clients could not tolerate a broker restarting and they did not configure their apps to be resilient.
On a more topical note, a guy on my team wanted to rewrite a python app we have in kotlin about 2 years ago, because it was the hot thing for about 5 minutes and our little POC python app was getting unwieldy for the scale it was growing into and its complexity. But we had no one in the firm who knew this, no support network for this, and I kind of saw that this was likely to be a flash in the pan kind of thing. I had to say no, and he was all pissy and was like but JVM! and arguments like that. I am really glad we didn't go that route, because kotlin is all but dead, and that guy left after about a year, and we would have been left high and dry.
My larger point is- what seems like such a cut and dried correct answer when its just from your viewpoint, can look very wrong when put in context of an organization, but unfortunately the end perception is often "my boss doesn't get it."
CEOs can't really communicate with developers or designers if they have no practical experience with development or design. Lack of mutual respect can make it very hard to find a balance between giving enough creative freedom and setting deadlines. They may either give too much creative freedom to avoid problems (expensive in the short term), or don't give enough to play safe (toxic & expensive in the long term).
I think this goes two ways. Yes, management is failing to manage creative work. But in too many companies (and I’m not talking about startups full of youngsters straight out of college) staff has also lost the ability to be creative, take ownership, and push their own ideas. It is very easy to fall into a “I wasn’t told to do so” routine. This is obviously a reinforcing circle
“This phenomenon is due, in no small part, to how our brains, in response to the thrill of successfully completing a rewarded task, releases euphoric chemicals that strongly reinforce the behavior that led to success.”
To borrow a line from "Pulp Fiction" let's not start sucking each other's _?_?s just yet.
"How do you best motivate software engineers? You attract them to significant, life changing work by elevating the need, the thing that's missing from life or society, a problem that needs to be solved, and extending a personal, creative opportunity to solve that problem. Software Engineers are motivated to solve epic problems with solutions that people love."
Let's not try to manage better by making software engineers out to be poor, misunderstood Giants of Action who are just trying to fight the good fight if only the business people would pull their share of the load.
Doctors, lawyers (think family law), and plenty of others are well motivated too. I've done 30+ years of software dev. Software like any other industry attracts a diversity of people ... lots of exemplary but also good doses of risible dumb-asses that no management will ever fix.
OP continues:
"The best way to motivate creative staff is to attract them to meaningful work through the use of strong attractors."
This is where the article just goes stupid and never recovers. Only a moron believes that the employee is somehow unconsciously enabled for greatness but otherwise an empty vessel if ONLY management would fill our need for meaning and direction with something preferably a solid budget, a five year plan, and a goal of staggering goodness. So then what are software devs? The genius of Oppenheimer (smart and good manager?) Linus T? Dirac? Or in fact blank, useless slates that the mommy corporation needs to imprint to get anything out of?
Like 99.9% of all Sunday school lectures this article talks about what without how. So it's largely useless day to day. We're reminded ad nauseam about bad thoughts, bad actions and its consequences but not how --- how to do something better in the day to day.
Let's remind readers of few things:
- Broadly speaking in his "Business Management" phase he forgot to mention that many companies lacked SPC i.e. how to do the day to day and to get away from articles like this that throw around another 10,000 maxims. These same companies weren't customer focused (be customer in not supplier out) ... on and on ... the managements phases he mention forget to mention that even the best corporations in their respective phases waste a ton of money, and a ton of talent not because of high flung issues like motivation and meaning but because of more basic issues like customer focus. Creative management by then is a distraction.
- A major problem at large corporations is not that management fails to play the role of a fundamentalist Baptist selling the good news door to door tirelessly saving us programmer-sinners, it's lack of openness (corporate speak BS), and silos. Those two issues defeat a lot of great guys and gals who already come equipped with meaning, and direction, and a desire to change but who eventually learn the unwritten corporate culture: we aren't gonna change; and if you have a great idea X but aren't in the X department well then it's not for you. Creative management isn't going to fix this; it will make it worse. The whole arc of the OP's story just wholly misses vast swathes of what really goes on in corporations that lower productivity and potential. In particular, the creative management approach fails to admit control battles exist.
- The creative culture sounds nice. Maybe. Or maybe it's a quite different thing. The perpetual ever always need for revolution is necessary to make and perpetuate frivolous consumerism. If there's always something new then there's always something new to buy. Related, there's a vaguely idealistic perhaps anachronistic impulse that any relation in society is a business target: bust it and make money "revolutionizing it".
- Meaning and quality is everybody's problem. You can have superb management and bad engineers or vice versa but if you think engineers are gonna make management enlightened or vice versa you have a lot, lot more to learn. We're here to help each other but also pull our own weight and learn ourselves and not always with the immediate result of gratification, orgasmic release, or profit.
I've been watching the documentaries on Disney+, particularly The Imagineering Story (great doc BTW). They talk about the history of the creative side of Disneyland.
What you learn is that when they are simply given a budget and told "build" they thrive. When a CFO type gets involved with Disney, suddenly their output drops, because that CEO is asking what the ROI is for everything they do. A lot of what they do fails and has no ROI, and the people that work there start to worry about what their ROI will be before they start working.
When the CEO just says "We're going to spend X% on research, here is the budget" then they thrive again.
I think this is applicable to software. When an engineer isn't asked to think about the ROI ahead of time, they are left free to come up with novel innovations. But if they know they will be judged on ROI, they will take fewer risks.
This of course is all predicated on being a profitable company. You have to already have a good cashflow to have the freedom to say "just go create".