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What’s Wrong with Hiring Cheap?

Posted by tropicaltheartist on February 26, 2015
Posted in: Thoughts. Tagged: , , , , , , , , , , , , , , , , , , , , , , , , . 1 Comment

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Abstract: Hiring the cheapest candidate looks like sound business management, at face value, but cheaper employees can be problematic and companies may be screening out the very top talent they actually need to succeed in a highly competitive environment.  The ultimate, true, hidden cost of refusing to entertain the idea of paying fairly, to attract top talent, may be catastrophic for the viability of the company, in the long term.  The widely reported skills shortage has its roots in low pay.  Much of the best talent simply leaves the industry for good, seeking better pay elsewhere, or better quality of life.

With an exclusively financial focus, it would seem to be the case that if you can fill a certain job specification for much less money, it is a benefit to the business, but is it really?  Do people that offer low salaries really understand the consequences of their actions on the viability and competitiveness of their company?  Is a candidate that works for half the money really as good as the one that wants a higher salary and is the difference significant, if there is one?

Silicon Valley employers will tell you that penny pinching, when hiring talent, is roughly the same as guaranteeing your company won’t produce anything outstanding and will, therefore, fail to succeed in the highly competitive world of technology-based products and services.  They know that really good talent is scarce.  For every incremental dollar they pay for talent, the multiplicative effect on company value increases dramatically.

There is anecdotal evidence that, at least in the UK, pay scales for technical talent are lower now than they were ten years ago, for equivalent roles and skill sets.  Real wages have not only failed to keep pace with price rises, they’ve fallen, leading to lower material standards of living for technical talent.  Meanwhile, the complaint of a skills shortage regularly does the rounds.  What is the cause?  Why are UK-based companies so apparently unwilling to pay to attract the best technical talent?  Is low pay for technical talent an attitudinal problem, or a structural one, or both?

Many technical roles in the UK are filled through recruitment agencies.  As they predominate, the salaries they set are taken as the benchmark for all technical salaries.  In this process, the employer asks advice from the recruitment agent regarding salaries and the agent nominates a salary range on the basis of what they think they will be able to find talent for most easily.  There is pressure on recruitment agents to nominate low salaries, as they compete on price, which is ultimately tied to the salary offered (as a percentage).

Given their almost total stranglehold, as gatekeepers, on the employment market, the salaries that recruitment agents nominate, in order to keep their fees to employers low, fixes the salaries on offer to all technical talent.  Technical talent is forced into a “take it or leave it” position.  There is no possibility of negotiating a salary.  When a recruitment agent learns that a candidate requires a higher salary than that on offer via the advertised position, they simply screen them out of the recruitment process.

From the employer’s perspective, this means that they never even see the very best candidates, because the recruitment agent screens them out before their CVs are ever presented.  They remain invisible.  Employers are forced into settling for less than the best talent they need, because the salary has been established for the job specification in question.  The option of increasing the salary on offer to attract a slightly, or even dramatically, better candidate never arises, because no such candidate is ever presented to the employer.

Often times, the job specification asks for just about everything imaginable, while the salary attracts only those with, at best, a partial match to the job specification.  This attracts chancers, who are prepared to represent themselves as meeting all of the job specification requirements, while not actually having the skills and experience required.

The prevalence of chancers applying for roles has led employers to suspect all candidates of being chancers, to some degree.  This causes another problem.  When a candidate presents with broad and deep skills and experience, it can make their CV look less specific to the role advertised.  Consequently, they are assumed to be under-skilled for the role, whereas in fact the opposite may be true.  They may have such an arsenal of skills, that they make a small deal of the specific skill the role demands in their CV, even though they are more than accomplished in it.

Despite careful screening, employers frequently make offers to chancers who have bluffed their way through the process, claiming they can do more and have done more than they really have.  The problem with hiring chancers is that they are learning on the job, making costly mistakes that could have been avoided entirely, by hiring better talent.  While chancers are prepared to work for a relatively low salary, in order to remediate their work history, two chancers do not produce the same bottom line results, for the company, as a single top flight talent who asks twice the salary of each chancer.  It’s a false economy.

The moral to the story is that offering half the salary only attracts people that are half as good, if you are lucky.  They will not be able to produce the outstanding, breakthrough products and offerings that a really good candidate, who costs more, would.  If you want a higher rate of mistakes, as the candidate learns at your company’s expense, burning customer good will and competitive advantage in the process, hire inexperienced and cheap talent.

Setting low salaries for technical talent is a “red flag” signal, to candidates, that the company does not properly value the contribution of its technical people.  A company that is unwilling to move on salary, on discovering an outstanding talent beyond their nominal salary range, is kissing a valuable opportunity for outstanding performance and results goodbye.  On the rare occasions that top technical talent finds a company with a position to fill, sticking rigidly to a fixed idea of what the salary ought to be, without being open to negotiation, is going to guarantee that top talent goes elsewhere, perhaps to a competitor.

By the same token, working for too low a salary, relative to one’s skill set, sends the signal that you don’t value your skills, experience or contribution either.  This leads to abusive or difficult working relationships in both cases.

There is an ageist bias that works negatively in technical recruitment, as well.  Most recruiters, today, are drawn from the ranks of the Millennials, or those born in the decade before.  Millennials, it appears, think that nothing of significant technical merit happened before they were born, whereas in reality some monumental technical feats were accomplished, using computers that were too slow and which had not enough memory, to provide user experiences that were often superior to those provided by profligately wasteful, modern technology stacks.  I know of at least half a dozen of the finest engineers from that era, top talent, currently struggling to find a suitable role for their skills.  While their credentials are impeccable and their abilities beyond doubt, among their peers, recruiters born much later cannot understand or appreciate the value of these long work histories, it seems.  They are frequently overlooked for younger, cheaper, less capable candidates.  Employers are, again, short changed.  Talent is squandered.

About a decade ago, there was an enthusiasm for offshore development, because it was thought that much cheaper engineers could be hired to produce the same quality of result, due to differences in exchange rates and local costs of living.  While the engineers were often impeccable, the use of offshore development teams came with hidden management costs.  The most expensive part of using offshore development teams turned out to be in transferring the requirements and domain knowledge to remote developers.

Irrespective of how diligent, capable and dedicated they were, offshore developers struggled to produce the same quality of finished technical work as those that were embedded in the markets and geographies they served.  Rework was more prevalent and products mismatched to requirements were frequently produced, due to incomplete understanding of the problem domain, despite the best will in the world and sincere efforts to produce the right thing.  The enemy was simply the paucity and limited nature of the rich communication that is required to produce excellent technical things, caused by distance, language incompatibilities, differences in cultural norms and expectations, and time zone differences.

Offshore development proved to not be a route to cheaper results, but the effect on technical talent salaries was that it depressed them, because the perception arose that the same technical talent could be obtained for much less money.  Factoring in the additional costs of managing offshore development, however, this was never true, but that did not stop the chilling effect on technical salaries.  Offshore development often ended up costing more, in the end, than on shore development.

Very few of the best technical talents can afford to work cheaply, due to the cost of living where they are and their stage in life, with its attendant commitments.  Working at less than would be required to maintain a reasonable standard of living, in the overpriced real estate markets that characterise the location of most technical jobs, means that the technical talent must accept a considerably reduced standard of living, effectively subsidising their employer through their own personal sacrifices.

Having worked hard and incurred considerable expenses to become top flight technical talent, it is very unattractive to be required to accept a lesser remuneration today, than a decade previously, yet that is precisely the offer many technical employers are making to potential hires.  For this reason, employers can only fill their positions with people who are able to structure their living expenses to work for less.  This means single people, younger people and people with alternative or supplementary incomes (parental support, etc.).  That eliminates a lot of the very best people and the very valuable skills they have.  It also dooms the people that accept lesser salaries to permanently constrained lives, in which having children, for example, becomes impossible, financially.  Recreational and discretionary spending is also severely constrained.  Work becomes their whole life and drudgery.  Consequently, they become progressively more miserable, increasingly unwell and less productive.  Outstanding products will not pour forth from people working under such duress.

What many financially-oriented people, in a company, fail to recognise and acknowledge is that their company’s value derives critically from the talents they hire, especially in engineering.  Making people disaffected, financially distressed and grumpy, by underpaying technical talent, or else hiring the relatively incapable and inexperienced, puts the value of the entire company in peril.  Even the best marketers and chief executives cannot sell substandard products profitably, if produced by mediocre technical talents.

If a company hires somebody relatively cheaply, to do their hiring and firing for them, they often lack the experience and wisdom to really know what they are looking at, when the candidates for various positions they are trying to fill come in.  Their hiring decisions are apt to be sub standard.  There is also some evidence that they hire to protect their position, not to find the best possible talent for the company.  Feeling insecure about their own qualifications, they tend not to hire outstanding individuals who might eclipse them, within the organisation.  They rarely recognise exceptional talent, anyway.

In recruitment, the inexperienced hiring manager makes some characteristic mistakes.  For example, when technical people applying for a role have done a lot, in their career, it is a total misreading of their CV to assume breadth of experience means shallowness.  This perception arises when you fail to take into consideration the sheer length of their career, relative to that of a person who looks more specialised, but has only been working for a handful of years.  It is also a mistake to hire somebody that appears to be more dedicated to the narrow job specification advertised, because the limited range of their skills gives the impression that this implies depth, on their CV.  What you are actually getting is somebody with not very broad experience, not a specialist that will do superior work.

The lack of experiential breadth means the seemingly more specialised candidate will not know how to really do the job, because real working roles are rarely as narrowly and specifically defined as the written job specification suggests.  Broadly skilled candidates bring highly valuable, additional abilities to the company that the job specification writer may not even be aware the company desperately needs.  Inexperienced recruitment consultants and inexperienced people making the hiring decisions compound and exacerbate this issue, with their obsession with exact keyword matches between CVs and job specifications.  Buzzword compliance is a poor measure of ultimate candidate value.

Somebody struggling to make an entire career, specialising in just one thing, is not a better hire than somebody that has successfully accomplished many things, professionally, including the particular area of skill written up in the job specification.  The more broadly skilled candidate is the more valuable because, not only do they possess the depth necessary for the specialist role advertised, they can also readily adapt to do the thousand and one other things that a real job requires of them.  They are rarely in a position of not knowing what to do, when faced with challenges beyond the nominal job specification.

Strangely, underinvestment also has played a role in depressing technical salaries, in recent times.  While potential investors, with piles of cash, certainly exist, they are currently hoarding it, rather than investing it, for fear of the mass market not having the discretionary spending power to buy anything they might make or offer, produced by any enterprise they might invest in.  As inequality has increased, the tendency to impoverish the middle classes, which describes the economic status of the best technical talent, has also increased.  The richer the richest have become, the poorer the best technical talent has consequently become.  Potential investors are playing out a self-fulfilling prophecy, as their failure to invest guarantees that fewer people have the money to spend with any enterprise.  Enterprises, therefore, find it harder to make a good return on any investment.  As a result, good investment opportunities have become harder to find.  It’s a downward spiral.  Cash hoarders, ironically, are ensuring that the value of their hoarded treasures is more in peril of collapsing than ever before.

The perceived skills shortage has its origins in low pay.  Some of the best talents simply find better things to do with their lives, which are more remunerative or which offer a better quality of life.  As a result, they leave the industry for good.  Their skills are no longer available to potential employers.  Low pay for technical talent drives out excellent skills, leaving a vacuum in its wake and creating an artificial skills shortage.  There may be many candidates, for each advertised role, but the best skills are no longer in the market.  The overall quality of candidates is reduced, as the best and brightest simply exit the market forever.

Great talent, if you are lucky enough to find it, is worth every penny to a company and then some.  The returns on investment in outstanding people are always much more than any increments in salary required, to secure their services.  Setting salaries at too low a level screens out exceptional talent.  Those are the very people who are necessary to create extraordinary offerings.  No company can thrive, or even survive, offering unremarkable products, today.

A Rotten Way to Create Anything

Posted by tropicaltheartist on February 16, 2015
Posted in: Thoughts. Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Leave a comment

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Abstract:  Under-estimation in technical projects is chronic and widespread.  It arises from bad beliefs and behaviours.  The consequences of under-estimation harm both projects and people.  It also causes under-delivery of promised project features.  It is wiser to choose to properly estimate and fund complex enterprise and development projects.

Yesterday, I had lunch with a dear friend and colleague, for the first time in a decade, who I have known for close to fifty years.  We’ve been good friends, man and boy, but have lived in different countries for several decades.  At one time, I worked for him, in the IT department of a tertiary educational establishment.  Throughout most of our working lives, though, we’ve experienced the world of enterprise Information Technology (IT) and of software development from the perspective of different countries and continents.  What astonished us both was the commonality of experience, in our working lives.  There are global factors that appear to arise, no matter where you practice engineering or technical management.  Perhaps they derive from human nature.

What emerged, early in our catch-up discussion, was that we had both frequently worked on projects whose estimates had been approximately one third of that which, as time would tell, were actually required.  Time and again, we both encountered budgets and timescales which should have been tripled.  With this underestimation problem being so commonplace and seemingly ubiquitous, we began to ponder on why it might be that estimates were so often risibly low and what the knock-on consequences of that perpetual error were.  It was an interesting and far-ranging discussion, drawing on our decades of experience in the industry.

The problem with ludicrously low under-estimates is that the technical and people problems you must solve, during any technical project, must be solved no matter what, or else the project delivers nothing.  There is no way to estimate and budget these problems away, by simply declaring them to be non-existent, on paper.  They happen anyway.  The remedial works you have to do mount up and press on the team and project stakeholders alike.

The issues accumulate, assert themselves and demand answers, which cost time and money.  If there is no time and money available for these unexpected, but wholly predictable and easy to anticipate issues, then other sacrifices are inevitably made.  Usually, the sacrifices involve demanding donated personal time, from those working on the project, or else the deliverables are decimated, resulting in a less than satisfactory outcome for the project’s sponsors and end users.  The opportunity costs, associated with addressing unbudgeted additional tasks, are particularly high.  While you are spending the project budget on fire-fighting or rescue missions, you aren’t using that funding to create needed functionality.

When things go wrong, during a technical project, you have to fix them.  If you don’t fix them, nothing works.  If you do fix them, you need to spend time and money that hasn’t been allocated or budgeted for.  The robbery required to fund the remedies usually takes place at the expense of the people working on the project, or on the delivered functionality.  In the case of a minimum viable solution, taking any functionality away from the deliverables runs the very real risk of causing the solution to be non-viable.

It has to be said: the main cause of under-delivery is under-budgeting, most of the time.  Peter is robbed to pay Paul and then people wonder why Peter is unhappy.

So, why do professional, educated, experienced people perpetually make these hideously silly under-estimates and why are they accepted as immutable gospel?

We both agreed that there is an over-zealous willingness to make “acceptable” promises to project stakeholders and sponsors, which is to blame for chronic under-estimation and hence under-investment in technical solutions.  At the first sign of disapproval, the estimates are reduced.  This is understandable in a hierarchical power-relationship, where the person with the more powerful position (usually the one with the money) can hurt the one making the estimates, if their pronouncements are met with disbelief; feigned or born of ignorance.  The terrible fact is that project sponsors can and do hurt people that steadfastly defend realistic project estimates.  They always want them to be lower.  They are prepared to dispense harm until the estimate they want is the estimate they get.

It is only once that these estimates sound musical to the ears of the sponsors that they become frozen in stone.  The other terrible fact is that, even if the estimator agrees to a musical-sounding, acceptable, low estimate, the practical impossibility of delivering to that estimate will also cause the estimator to be harmed by the project sponsor.  From the point of view of the estimator, you are going to be hurt, whether you low-ball the estimate and fail to deliver on it, or else stick to the realistic estimate, which your experience tells you is the true figure, but displease the sponsor with the discordant sonic nature of your projected numbers.  The duress is merely delayed, in the case of offering a derisory under-estimate.

Project sponsors, for their part, are usually mired in debt and cash flow precarity.  Their imperatives to call for low estimates are born of fear and desperation and a naive belief that software comes from thin air.  They wear their lack of insight into the technical development process as a badge of pride, citing their specialism in money matters as a justification.  It’s a form of wilful ignorance and arrogance and leads to very bad decisions, when it comes to funding technical development.  Their every decision, related to sponsoring technical development projects, is, by necessity, based on hearsay, gut feeling and guesswork.

Younger, more thrusting career ladder climbers see advantage in estimate disputes.  If they are trying to score points and win the approval of superiors, in order to get ahead, they will make extravagant promises of being able to do something for nothing.  If they have credibility, the sponsor will gravitate toward the nirvana-like lies, rather than be supportive of more rigorous, fact-based analyses.

What the young go-getter is rarely aware of are the consequences of their seemingly attractive guarantees.  They’re heedless of the terrible downstream ramifications, which in reality nobody wants.  They are also oblivious to what their promises will require them to do to innocent other people, many of whom are the very creators of the technological solution that everybody depends upon, in order to make good on their impossible pledges.  They’ll end up being hated by everyone and hating themselves.  The psychological damage related to this turn of events cannot be underestimated.

Of course, at the point of the inevitable, predictable outcomes rearing their grotesque heads, not a single person that placed pressure on the estimators to deliver a low estimate will be willing to take responsibility for them.  That particular badge of dishonour is usually placed squarely on the technical team and their commitment and competence called into question.

With this turn of events being so common, it is little wonder that my friend and I have not advised our respective teenage children to pursue careers in technology.  We wouldn’t want them to experience the trauma, as interesting and fulfilling as creating things from scratch can be.

Agreeing to under-estimates sends out a broadcast message, throughout the organisation, that technical work is not valuable or to be valued highly.  It casts the aspersion that the technical developers are lazy, good-for-nothings who perpetually sandbag and pretend the work is much more complex and difficult that it really is.  Of course, in reality, the reverse is true.  Technical developers are dedicated and diligent, working far harder than most of their non-technical colleagues, to deliver work that is far more complex and difficult than even they themselves will publicly admit to their colleagues.

One of the drearily predictable and inevitable consequences of under-estimates is that if you are replacing a number of custom-built, bespoke systems with an enterprise-wide, common platform, individual groups, who once had their perfect system, which did everything they wanted to do, the way they wanted to do it, will lose sometimes vital functionality, as it is sacrificed to meet the needs of the dwindling project budget.  The reason they cannot keep their old, bespoke systems is that the organisation cannot afford the maintenance costs on all of these peculiar, vertical solutions.  Only an enterprise-wide, horizontal suite of software makes economic sense.

However, because of under-estimation, they lose utility, when things they once had fail to materialise in the new system rolled out.  The vociferous backlash, coming from system users who are no longer able to do their jobs in quite the same way as they used to be able to, cannot be underestimated, either.  It can bring a change management programme to its knees.

The fundamental problem is that estimated development budgets seldom seem to include the research or maintenance and solution evolution costs.

Firstly, there is scant acknowledgement and recognition of the need to find out what the development team doesn’t know and to learn it, before the work can be accomplished successfully.  There seems to be a preference to pretend that everyone on the team knows everything they need to know already, at the inception of the project.  This leads to construction of the software with significant and telling gaps in the developers’ knowledge.  Obviously, that can lead to downstream issues.

A reasonably complex enterprise system, once installed and running, is rarely static.  It must be maintained, so that it continues to serve users.  Capacity must be planned, upgrades and patches must be applied at intervals and data must be scrupulously backed up, in the event of disaster recovery being necessary.  The system generally evolves, as the organisation is supports also changes.  Both maintenance and evolution have costs and corners cut, during the initial development of the system, can dramatically increase these costs, which are seldom accurately budgeted for, anyway.  System evolution and extension costs are normally regarded as operating costs, but they are really ongoing development costs.

Technical project funders imagine they can get away with cutting the funding for IT and development projects with few practical effects.  Without being mindful of the fact, often, their mental model is that the software they need will somehow appear, due to diligent programmers working harder, or donating their personal time to the cause, or else that their enterprise system will be miraculously conjured out of the ether, by some form of technical magic which they don’t fully understand.  Such a belief is, of course, utterly nonsensical.  Making anything takes time and effort.  If that effort and time is not paid for, it either won’t happen at all, it will be donated grudgingly and sparingly or else they are expecting people to do real work and create tangible value, for free.

Project stakeholders, who ask developers, already under extreme budgetary pressure, if they can add additional functionality, without additional funding and time, using the incantation that begins with the magic words; “Can you just…?” are particularly frustrating and odious distractions that raise the hackles of any development team.  If anybody asked them to do more work, spending more hours doing it, without any additional pay, funding or deadline extension, they’d be furious, yet they blithely, breezily and happily ask for additional features in the software project, as if they come from a bottomless jar of features, for nothing, in no time.

Once the project funding dwindles and the development team begins to be unfairly seen as obstructive, difficult and incompetent, their work performance is scrutinised minutely.  Their every movement, decision and choice is second-guessed, restricted and commented upon.  These judgements are made, often multiple times, by other people in the organisation, who neither understand what the developers do, nor could do it.  Micromanagement by non-technical managers is thought to be the answer to wringing more software out of less money; the unjustified implication being that the technical team is catastrophically and dysfunctionally disorganised.

Ignorance of how software must be created, for it to have lasting value and low cost of ownership, makes for a very poor project sponsor.  It leads to needless, arbitrary, artificial haste, which is self-defeating anyway.  Pared-to-the-bone staffing levels mean that quality is invariably the first casualty.  Corners cut in testing and quality assurance, the first candidates for cuts, come back to haunt system users in the form of egregious software defects that never seem to get resolved.

This kind of poor corporate behaviours sets up the developers to be permanently on the back foot, fire fighting and under constant, extreme pressure.  Sheer corporate denial of the true costs of development projects leads to corner cutting, short changing the user, making the developers feel bad and to lose pride in their work and in their achievements to date.  It is demoralising and soul-destroying, resulting in a lot of jaded, cynical, burnt out people, who have little residual loyalty to the organisation that has reduced them to this state.  You can’t help getting the sense that people’s parents did not raise them for a working life under these conditions of prolonged psychological stress and social engineering.  It’s the stuff of nightmares.  The emotional and psychological scars are long-lasting.

At the nominal end of the woefully under-funded project (for these projects have a habit of running indefinitely, as the mistakes made have to be patched up somehow, usually by a skeleton maintenance staff), reputations are trashed, pay stagnates, appreciation is never forthcoming, career trajectories are damaged and derailed, stress and depression have been induced, health is damaged and all in the name of delivering something that couldn’t have been built for the time and money available in the first place.

The way that IT and R&D projects are chronically under-funded, poorly run and mismanaged is no way to create anything of aesthetic, technical, business or artistic merit.  It’s a very poor method and model for obtaining utility and growing the value of an organisation.  There’s nothing remotely nurturing about it.

It does make you wonder why anyone with programming or technical talent would want to create anything, under these needlessly Draconian conditions, which arise solely from a fictitious belief that complex, valuable software comes very cheaply.

Patronising Rewards

Posted by tropicaltheartist on February 1, 2015
Posted in: Thoughts. Tagged: , , , , , , , , , , , , , , , , , . Leave a comment

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Abstract: Rewarding employees the wrong way can be patronising and demotivating.  It is better to not reward at all, than to reward in demeaning, belittling ways.  Key contributors want meaningful recognition that speaks to their autonomy and significance.  Top-down rewards, only bestowed from on high, reinforce the meritocratic injustices in the company hierarchy and cause discontent.

How do you encourage people to do their best work?  It’s an important question, because excellent work contributions translate into company advantage and better earnings.  The need to reward people for doing good, valuable work would seem to be a straightforward thing, yet the way those rewards are handled can actually have the opposite effect to that intended.  Instead of being a factor in promoting consistently high quality work, it can instead lead to demotivation, dissent and withholding of an employee’s best ideas and contributions.

Traditionally, employee recognition took the form of token spot awards.  These are small amounts of money, awarded for a job well done.  The problem with spot awards is that psychological research tells us they only work when the task rewarded is mechanical, routine and largely brain-dead.  For anything that requires initiative, novel thinking or taking personal responsibility, they fail.  In fact, they cause worse outcomes than no reward at all, for those kinds of tasks.  The implication of the small amount of money awarded is that this is all the employee cares about.  It is an explicit way of calling your best contributors “coin operated”.  That can be demeaning and insulting for those whose vocation gives them a higher, more worthy calling.

Also, the amount of the award can be pathetically small, compared to the impact on the company’s bottom line that the employee’s contribution caused and this is not something that employees are unaware of.  Telling an employee that their “good job” was worth £10 or $10, it doesn’t matter which, when it causes the company to earn an additional million, simply outlines the fact that the employee should be working for themselves, not harder for the firm.

Incentives, based on the amount you sell or the amount of profit you generate for the company, are like an unearned bonus, when the orders would have come in, irrespective of your work contribution.  They are relatively easy to scam and they erode teamwork.  They also come to be expected as an entitlement and so, instead of motivating, they merely cause displeasure and dissent, when they are withdrawn or reduced in value.

The other kind of recognition traditionally used is the “attaboy” award.  It’s a token gesture, like sending an e-Card or putting their photograph on the “employee of the month” wall.  Usually accompanied by a fruity and over the top citation, relative to the achievement, the award is both worthless and cringe-worthy, causing embarrassment, rather than pride in a job well done.

Also popular is the share option, which offers the chance of a possibility of maybe earning an indeterminate amount of bonus money some day, if only you willingly submit to inhuman and degrading work practices, or else tolerate excessive top-down management abuse, in order to earn the carrot.  It is an attempt to convince you that you are an owner of the business, who should therefore be willing to make greater personal sacrifices for the good of the business, but an option is not the same as a vested share.  Fully vested shareholders, with voting rights, actually own the business.  Rest assured that the bonus is far from indeterminate.  It has been very carefully determined to ensure that not too much is given away.  In exchange, the employee so incentivized is expected to give their all, sacrificing personal time and relationships, if need be.

All of these recognition techniques can leave the workforce feeling belittled, unappreciated in significant material ways and “owned”, like some kind of pack of good doggies.  If a company’s intention was to encourage their employees to do their best work, there are few things as undermining of that aim as making everybody fully realise their impermanence, replaceability, interchageability and lack of recognised uniqueness, through patronising employee reward schemes.  It’s almost like rubbing their noses in it.

If you ask employees what motivates them, it’s genuine peer respect, autonomy in setting their tasks, assignments and schedules, better conditions, when travelling on business, flexibility in hours worked and place of work, control over their working environment (furnishings, decoration, noise abatement, lighting, comfort), the ability to easily inject their own ideas, innovations and direction into the company’s roadmap, the resources they need to get their job done and realistic, proportionate participation in the good fortune of the company, if their work contribution causes the company’s earnings to rise significantly.  They want to have more of a say on company policy and direction.  When being recognised for their contribution, they want it to be for the things that add purpose and meaning, to the lives of their customers and colleagues, not for things that undermine, destroy, cheat or short-change, as profitable as these might be.  In essence, they want to matter more to the company their work efforts are helping to build and grow, through increasing ownership and to feel genuine pride in their achievements.  How many employee recognition schemes offer that?

On the one hand, companies are fully aware that their value depends critically on the quality of their people and the work contributions they make.  On the other hand, they deny it outright, insisting that the top-down hierarchy is a pure meritocracy, with the earnings, accruing from individual outstanding work, flowing directly into the pockets of upper tiers of management and shareholders, predominantly.  There is clearly a conflict apparent here.  The more that employee recognition rewards are bestowed, exclusively from on high, the more obvious it is that the awarders are not in their positions based on merit.  It becomes quite literally patronising.

Were it the case that the hierarchy really did reflect a pure, internal meritocracy, the most valuable work contributions would always come from the top and it would be obviously the case to all, but this isn’t what we observe.  Just having a recognition scheme that attempts to extract better work from the lower tiers of the organisation reveals the truth.  The top tiers are free-riding.  The things that matter most, to the company, come from people who aren’t in the highest positions in the hierarchy.  Employee recognition has to be a peer-to-peer collegiate thing, or it tends to lose its legitimacy and potency.  Expecting outstanding contributions consistently and returning only crumbs sends a clear message to employees that they are being blatantly exploited and manipulated.  Retention problems and disengagement soon follow.

Employee recognition schemes have traditionally been a system that asserts value comes from the unique contributions of individuals, while the internal organisation of a company, its hierarchy, tells the opposite story.  Few reward effective teamwork.  Whereas employee recognition programmes try to get the most valuable contributions from low level employees, because those things really do significantly affect company earnings, the amount awarded tells the opposite story.  Most importantly, a badly designed employee recognition scheme draws the contradictions into sharp focus, in the minds of those participating.  They cause dissatisfaction and despair, instead of encouragement and motivation.

There is a contradiction between the structures of company ownership and to whom the spoils ultimately go, for the effort and success of the enterprise, versus the reality of where company value actually comes from.  In wanting better company performance, it is imperative for firms to share the resulting success generated by those individual contributions, many of which are turning points for the entire enterprise, more equitably, or their efforts at encouraging superior work contributions will backfire.

Proprietorial ownership of the company, in proportion to the significance of one’s contribution, matters more than money, in most cases, though money is not an insignificant factor.  The best employee contributions cost a meaningful equity stake in the company.  In so doing, the employee gradually transitions from paid hired hand to beneficial owner.  Of course, very few enterprises are rewarding and recognising their employees in this way and consequently, failing to unlock the value that otherwise could be made available to all.  In some cases, that unrealised potential value dwarfs the value of the company, even when taking into consideration the best case growth projections.  Staying in charge and in control is a very costly choice.

Designing the Off-Screen Interactions

Posted by tropicaltheartist on January 31, 2015
Posted in: Thoughts. Tagged: , , , , , , , , , , , , , , , , , . Leave a comment

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Abstract:  Interaction designers sometimes limit their design artefacts to screens and software.  In fact, the most important interactions that take place, between a customer and a business, might not involve software at all.  These need to be designed into flawless, smooth, business process flows and for the software to seamlessly connect to these off-screen interactions.  Ideally, all engineers and business process implementers need some training in and mindfulness of interaction design thinking, so that all customer interactions are designed well and provide a good customer experience.

A lot of what a business does has nothing to do with the forms users fill in and the buttons they push, on a screen, be it through a web, desktop or mobile application.  Much of what your business represents and delivers, to its customers, are human-to-human interactions, loosely associated with your on-screen applications, but outside of its flows.  The value your business provides is in the totality of the customer experience, not just in their interaction with your applications, though your software, if poorly designed, can actually degrade the value of a customer interaction with your company.  Many interaction designers and engineers make the mistake of thinking the entire business is contained and takes place within the software they create.  It doesn’t.

For example, if your business involves the handing over and redemption of keys, the delivery of physical goods, the need to gain access to certain company assets and so on, then when these things happen in the real world, interaction designers need to ensure that there are well-defined and seamless processes available, should things go wrong, so that the customer experience can be remedied, simply and satisfactorily, without undue delay.

Where the company’s enterprise software has to be updated with new information, in response to a real-world transaction, this also has to fit into the software-modelled business process flow, without disruption and provide graceful recovery paths, accessible to the user, should the transaction be in any way exceptional, incomplete or in error.

What is completely unacceptable is to drop the customer on the ground, if the real world transaction doesn’t fit nicely into a pre-defined software application user interaction design.  So-called “happy day” flows are of no use, when things go wrong.  It is possible to anticipate and design interactions to deal with “sad day” user experiences, yet so few enterprises do.

If your enterprise delivers physical products to customers, then the way these products actually work, how hard they are to live with and maintain, and what sort of troubles are encountered, post-sale, are all part of the user interaction with your enterprise.  It matters little if you deliver a slick pre-sales experience, only to inflict the archetypical “product from hell”, which nobody is able to help the customer with, after the sale.  Rest assured that this is likely to be the last sale of a product your company will ever make to this customer.

Out of date and incompletely tested drivers, cursorily dumped on an obscure and barely navigable “afterthought” support web site, mandatory automated software updates that fail and cannot be undone, and impossibly complex parts ordering and service processes are all interactions that are, today, usually designed very badly.  These contribute to sour, bitter, unsatisfactory customer experiences.

The job of the interaction designer is to consider all customer-to-business interactions, especially the interactions that have no software involvement at all.  Unfortunately, this leads to a problem, because many of the implementers of the off-screen processes, or even those that must code the on-screen experiences, have no interaction design skills or training.  This is dangerous, for a business.  It can lead to no design, poor design or highly inconsistent design, for the customer interactions with your business.

Leaving users of enterprise software with no options to remedy an exceptional transaction is the same as losing an otherwise loyal, happy and lifetime-valuable customer.  This applies whether the software is customer-operated (self-serve) or operated by a business representative.

Nothing infuriates a customer more than having to guess which particular ad-hoc rules du jour apply, to any given request or transaction they make with the company.  They also hate having to repeat themselves, or enter the same information at multiple steps in their experience of dealing with the business.  It wastes the customers’ time and it leads to data inconsistencies, when different answers are given to the same questions, through human error, in different parts of the enterprise software.

Worse still is the error recovery workflow that takes the customer on a futile, wild goose chase, which ultimately wastes more of their time, does not solve their problem at all and leaves them with a very poor user experience, unable to complete the transaction they want to complete with the business.

Lastly, if during a customer transaction, “computer says ‘No’”, leaving no possible way to complete the transaction to the satisfaction of the customer at all, even the most forgiving and loyal repeat customer can blow a fuse.  It doesn’t take too much intelligence to realise that something really could be done, but that the remedy is being obstructed by the unnecessarily rigid design of the software orchestrating the customer experience.  Nobody likes being prevented from reaching a sensible outcome, because there is no button to press to permit it, or no form to fill which would enable it.

”Design-led” companies have tried their best to address these failings.  They typically establish a hard demarcation between the designers and the engineers who create their enterprise software, because the skill sets are very different.  The consequence is that the company either winds up with design inconsistency across the enterprise, because separate designers are assigned to different engineering teams, or else you get broad brush stroke design, as a single internal design consultancy tries to serve all engineering teams simultaneously, leaving detailed design to the individual engineers.  Both approaches have disadvantages to the customer.

It’s actually better if every developer is mindful of those user experiences, especially the ones that take place off-screen, instead of leaving it to designated interaction designers, because what possible argument can there be for disregarding the user experience, at any stage of building the technology the business relies on to deliver its value?  The same applies to any related processes.  Everybody needs to be a customer advocate and to see user experiences from the customers’ point of view.  Their individual insights into how customers experience the company are as valuable as those of the designers.

Inconsistency of user experience is still a risk, with this decentralised interaction design approach, but at least the customer is less likely to be totally abandoned, when things don’t go according to the “happy day” plan.  Interaction design guides, prepared by the interaction design authorities, in the enterprise, can go some way toward addressing the inconsistencies in separate user experiences.  A slightly peculiar customer experience is, by far, preferable to an extremely bad one, in any case.

Engineers and business process analysts must embrace interaction design thinking, or else achieving customer experience consistency will become impossible, especially for the off-screen interactions.  When the customer experience of a company becomes bizarre, Byzantine or schizophrenic, customers take their business elsewhere, if a better overall user experience is available.  Nobody needs to tolerate sheer stupidity and nobody likes dealing with an enterprise that appears to be inflexible and bone-headed, due to the poor design of its interactions.  It doesn’t matter how pretty the web site looks.

The Potency of Product Design

Posted by tropicaltheartist on January 28, 2015
Posted in: Thoughts. Tagged: , , , , , , , , , , , , , , , , , , , , . Leave a comment

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Abstract:  Instead of weapons, governments could spend money on developing useful products that people need and use. That could increase tax revenues and provide employment. It would reduce the deficit and increase export earnings for the nation and update the technical base. A government could provide tech and devices for its citizens, rather than leaving them to find solutions from private companies. A lot of traditional products would become more valuable if enriched with software. 

Over breakfast, this morning, my wife and I were discussing the news story that Apple had become the most profitable company on the planet.  Sipping her coffee, my wife had this thought: if the UK government scrapped the Trident nuclear missile replacement programme and instead spent a fraction of that money on developing a superior iPhone competitor, then the profits arising could pay for the nation’s entire education budget and the National Health Service.  Far from needing to raise taxes to fund the development, there would actually be money left over for tax cuts.

Instead of needing to pursue a company like Apple for tax evasion, the act of creating a superior product would, at a stroke, provide employment for the country’s engineers and those that assemble and manufacture it.  Meanwhile, teachers, doctors and nurses would be fully bought and paid for, the roads would be mended and children would receive a decent education.  Every citizen would receive free health care at the point of delivery.  In terms of national security, why would anyone attack a country that made such cool phones for them?

The deficit would reduce, because the product would clearly be export-worthy.  For those that protest that there would be no personal profit incentive, so it would never happen, the counter question is this: how much do individual Apple employees really profit from designing and manufacturing the iPhone, individually?  Still don’t believe anybody would bother?  Why did Tim Berners-Lee bother to create the World Wide Web?  Indeed, in what sense is permanent taxation of every working income an incentive to create?

It’s an interesting way at looking at it.  When a company makes so much profit, from the act of designing a successful software-rich product, why shouldn’t a nation do it instead, to fund all the things they currently fund from taxation?  All the counter arguments appear to me to be purely ideological and based in rigid belief systems, rather than rational objections.  The alternative mode of thought is to embrace pure possibility.  Of course, the current political class doesn’t have the skills, knowledge, experience, will or wit to do this, but a different crowd could.  Apple’s staff did build an enterprise that rivals the finances of a nation.  It’s clearly and demonstrably within the realms of human ability.

It doesn’t have to stop there.  A nation could decide to make an Amazon and an eBay, a PayPal and a Google, running on an operating system and computing platform designed and owned by the people.  The profits arising could be shared by all and used to increase the standards of living of every citizen of the nation, not just the one percent, thereby addressing rising inequality.  Indeed, by having directly democratic control over these digital utilities, some of the more egregious practices of these private effective monopolies could be reined in.

There are other ways at looking at the national enterprise rather than through the dogmatic prism of government and civil service.  If the country set its collective mind to producing and making useful things, for profit, the commercial gain could easily pay for all the other things the society wants to do, to provide for its citizens.  The only truly baffling question is why it doesn’t.

More baffling still is why more companies don’t create software-rich products.  When the potential gains are so great, why are there so few companies rising to the challenge?  There is no shortage of useful things needed.