27
April
2009

What happened to “I watch your back if you watch mine”? 18:35 on Monday

These thoughts apply to the industry I know, which, broadly speaking, is digital services. But it might be relevant to other fields, too. I hope it isn’t.

Struggle of Life
Struggle of Life, originally uploaded by Tipu Kibria.

There’s a constant struggle in the industry.

The corporate idea for survival is to maximize utilization by maintaining only minimum resources. For product companies this is mostly about cutting resources that are not providing value, in effect: firing people. This cost cutting is often done in a short-sighted manner, where resources are cut based on how much direct value they provide to the company. Human resources and research and development are very likely candidates for cost cuttings — in my opinion two of the most important functions of a product company.

Provider companies can also employ a strategy of selling more work than they have resources for. So the companies sell their services, then hire staff in a hurry to deliver those projects. If the project outlook gets worse, and the skills of specialized staff are not needed, the unnecessary staff gets fired. Unfortunately the sales pipeline visibility is rarely more than a few months, so people tend to get hired and fired quite erratically.

The workers’ idea for survival is to create and maintain a personal brand. Making sure you do your work well, keeping in touch with old colleagues, keeping and updating a list of references, and more and more often, changing your employer whenever something more interesting comes along.

This looks like a sweet combination, at least for the companies, doesn’t it: as the market for talent is more liquid, companies can more easily recruit top talent for interesting jobs — even if that talent is a little fickle. At the same time companies can maintain high utilization by cleaning out people who are not making money for the company and increasing the profits.

Yeah, but.

There are other, more long-term consequences. People lose trust in employers, because companies are not committed to their employees. The lack of commitment goes both ways, and as a consequence employees have little loyalty for the companies that employ them. People can and will commit highly, but only if it furthers their personal brand, and their professional and life goals.

Without mutual commitment between companies and employees, company culture deterioriates. In fact, it becomes very difficult to maintain a culture in an environment where people come and go, depending on the demands of the market or the capabilities of the sales team.

It also becomes difficult to maintain processes; and I’m talking about real, working processes, used in daily work, not the fancy process charts that providers often use to sell their services but which have little to no relevance to actual work. Processes enable you to repeat success whether you have access to your superstar employees or not. Processes can make your offering consistent, rather than being fully dependent on certain people. In short, processes are important to the financial bottom line.

It looks rather obvious to me, that for long-term success, and long-term leadership in a given field, a company needs to make sure it hires the best talent, but also spends the effort to keep the talent, developing them into superstars supported by a strong company culture and solid processes. Yet I rarely ever see this happening.

So the question remains: what happened to companions — employees and companies — watching each others back?

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