It boggles my mind, given the big money involved, why so many people continue to bet huge sums of cash on the proven short-term penny-wise/pound-foolish idiocy of MBA-think.
I mean sure-- if your company is under cash flow pressure you have to pinch pennies. You have no choice. Spreadsheet says so, and spreadsheet's the boss. But if you're not, you should be investing and thinking long term cause the other guys probably aren't.
I've seen a related phenomenon in the startup world. Watched it, front row seat. I did a stint in startup-tech-focused business consulting. If you have a top-ten MBA and connections you can raise millions of dollars, set fire to it like the Joker in Batman Begins, and then raise millions of dollars again, serially.
They were basically cargo cultists, mindlessly imitating the words, phrases, and superficial behaviors of supposedly-successful people and businesses. But there was no higher-order conceptual thinking beneath the surface-- no "there" there. They had no plan and no plan on how to acquire a plan. They got the money and then did a kind of mindless MBA rain dance until the money was gone. Then they'd raise more.
I watched them do shit like destroy products that big customers had money in hand ready to pay for when they were inches away from release. I mean a done product, ready to go, and better than anything else in its market. A product that they owned and had already paid to develop. The rationale was always some kind of MBA newspeak blather. I can't even remember it since my mind filters out sounds that imitate language but lack conceptual content. Otherwise I risk wasting a synapse.
But what do I know? I went to a po-dunk Midwestern state school, so what looks obviously stupid to me is maybe genius. I'm not saying I definitely could have done better, but I do think my probability of failure would have been <= to theirs. But there is no way in hell I could get what they got. Not a chance. I saw people try with better credentials than me and who were probably much smarter, but they lacked whatever special magic blessing the cargo cult guys had.
I'm convinced its pure cronyism and ass-covering. I guess nobody ever got fired for losing their clients' money to a Harvard or MIT Sloan MBA. Nobody with a degree like that could be at fault. It has to be the employees (I've seen really good people get blamed for following stupid orders several times), bad market timing, etc.
The top-10 MBA cult is awful. These are usually those people you knew in high school/college who were excellent at studying for and passing tests. Excellent at getting great grades on projects. Excellent at everything except building ANYTHING.
I think that the people who are best at building things that people want don't want to get an MBA. They instead choose to spend their time building a business, a piece of software, a piece of hardware, whatever. People are good at what they love to do. MBA people love to go to school and get pieces of paper that say "pay me I'm smart."
As a data guy, I have to go in and deal with these assholes all the time. I have hard numbers, they have hand-wavey MBA speak bullshit. It is probably the hardest thing we data people have to deal with: criticism from the "trusted advisors" who, due to the cognitive dissonance suffered by the executives who pay them loads of cash, are deemed to be intelligent when they really aren't. After all, what executive wants to admit that the man or woman he has been paying high 6 figures to advise him for months is actually a talented actor/mimic at best and an idiot at worst??
I don't think it's the MBA degree itself that causes this. Most MBA programs go very heavily into the idea of culture and competitive advantage - and obviously stopping a core part of your culture like the 20% time would be against what most MBAs are taught.
This problem has nothing to do with education and everything to do with short term professional management that is compensated based on short term results. If you want to blame anyone, you need to blame current financial thinking by most board of directors.
Of course, most of those guys are just in it for the short term too. So ultimately you need to blame the guys with money who give it to people who don't know how to invest. I'm sure most of us, including me, are guilty of this as well.
Not at all - MBAs teach company management and company finance. There really isn't anything in an MBA that would have anything to do with the job of corporate oversight that a board of directors handles.
The board of directors are simply large shareholders who are put there to make sure management does what is in the best interests of share holders. In most large companies, these people are mostly made up of employees of pension funds and similar institutions. Their job is to try their best to make sure the company is committed to giving their investors a return of x% and are usually there because it is conventional thinking that having control of a company is in your best interests.
Now obviously these guys have no idea what should be going on in a technology (or just about any other) company. They aren't really concerned with employees or anything like that - only with a few accounting and market figures such as return on equity, share price, potential acquisitions of other companies they have invested in, and whether or not to sell the company to others. Actually running the company or how the company works is the furthest thing from their minds.
Now, as I said above, these guys are not actually to blame. They are just doing their jobs - giving returns to the guys who have dumped money into their funds. The people ultimately to blame are you and me. We put our money in these massive pension funds and similar. We don't even care where the money goes. Each year we check our statements and say 'oh, 13% returns only, maybe I should switch pension funds?'.
As always, the problem is apathy, entitlement and 'well these guys are a big company, they must know what they are doing'.
"MBAs teach company management and company finance."
This is inherently what the board of directors does. Furthermore, you characterization of the make-up of a board of directors is not necessarily correct. Many (if not most) boards also have independent directors, who many not own a single share.
"There really isn't anything in an MBA that would have anything to do with the job of corporate oversight that a board of directors handles."
This left me scratching my head, my experience was the polar opposite of this comment. In my MBA program the topic of the board came up a number of times in finance and management classes. The board & corporate oversight were very much top of mind issues.
"This is inherently what the board of directors does."
That would be what the board of directors is theoretically meant to do. In practice it's extremely far from the truth, with board meetings being very infrequent and focused primarily on share price and dividends.
This discussion is not really about Google though: Google does actually have a very relevant board of directors with most of them being founders or directly involved in starting large tech firms. Many other companies (Nokia? Microsoft?) are not so lucky.
Interestingly enough on Google's board only Paul S. Otellini (previous CEO of Intel) and L. John Doerr (early Intel engineer and VC) have an MBA. 
I agree with your point about theoretical vs the reality of a Boards function. I should have been more explicit, I am disagreeing that Board of Directors are overlooked in MBA education. At least in my experience, the Board was discussed often.
I really don't see the need to stereotype, and even less to call names.
Personally, I have worked as a software developer, and I do also have an MBA, and I strongly believe that my broad/diverse education allows me to better interface with people from different backgrounds within a work environment.
Are there ways to obtain broad skills (technical, management, etc.) which are more time effective, cost effective, etc.? Maybe, maybe not. Each person is free to make their own choice.
However, back to the article's point, if Google's 20% is dying down it is ultimately due to Larry Page, who is clearly a technical guy, doesn't have an MBA (1) and most likely is seen as a "doer".
(1) According to wikipedia, he actually received an honorary MBA for his entrepreneurial spirit.
You've been in "this community" for less than 3 months according to your username. I'm not SV technorati, and I've run a business, as well as been a founder in a non-tech business that grew to 150 employees. I know business, and I know what I said is correct.
It doesn't matter how long he's been here. His statement about the community may have been hyperbolic; do you have a real rebuttal against the content? Or will you nitpick one sentence you can attack?
SV Tehnorati is a stereotype because he's drawing comparisons, he wouldn't normally make a steretype argument unless you had already. The point was to demonstrate a different perspective, and this entire thread is just demonstrating a disgusting level of stereotyping for a category of people - MBAs.
The bottom line is that there is nothing inherently evil or pejorative about an MBA. Judge human beings on individual merit, not on a piece of paper.
Yep, absolutely correct. Well, save for Nike, which was founded by an MBA. Oh yeah, and Apple, whose CEO has an MBA and was personally selected by Steve Jobs. Well, now that I think about it, Meg Whitman, the current CEO of HP and former CEO of eBay has an MBA. And wasn't Bonobos founded by a Stanford MBA? I think Birchbox was born by a group of MBA's as well.
Except for those and probably thousands of other exceptions, your logic is water-tight and well-reasoned. Kudos, sir.
Either it is a meritocracy for them, in which case we can draw some really nasty conclusions using people like Sculley, or they aren't operating in a meritocracy, which jives with the other accusations leveled at them....
Yeah, we're in the middle of a massive bull run which has swelled every company in my portfolio like a balloon. And the correlation between stock price and awesome company in the short run is really really tenuous. Many of the less savory leaders out there have a penchant for making short term profits look awesome by killing off investment in long term prospects, and the market eats it up.
SV technorati pretentiousness is indeed awful sometimes, and stereotypical MBAs do not have a monopoly on brain-dead business ideas.
But last I checked SV and California in general pumped out more innovation than the rest of the country combined, and is preparing to colonize another planet and electrify transport.
There is obviously something fundamental in the "California mindset" that differs starkly from the majority of the rest of the world, and that ought to be understood. I think it has something to do with reasoning from first principles, and with an expansive risk-tolerant business culture.
That risk tolerance and general liberal thinking is going to generate a fair amount of silly stuff, but it's also going to permit genius.
I forget who said this, but I recall reading it somewhere: "the further West you go, the further into the future you go." I'd say it's not true literally but certainly philosophically.
Reality distortion fields don't emit actual products that work.
It's a field alright, and it does have some reality-distorting side effects, but there is actually a "there" there.
If I had to boil it down I'd say it's this:
(1) California believes in the future. People in California (stereotypically) think about what they can do tomorrow, building on what they have today. Everyone else thinks about what they already have today and fears losing it tomorrow.
(2) California reasons from first principles more than elsewhere. Everyone else looks at what everyone else is doing and tries to superficially copy what looks like it works, or looks to the past. Ideas from the past will only get you what was done in the past, and other peoples' ideas will not make you competitive since they're everyone else's advantages. (Assuming you succeed in copying them at all, and don't just end up cargo-culting them.)
I quoted this elsewhere in the thread. It bears repetition.
"For the engine which drives Enterprise is not Thrift, but Profit." - John Maynard Keynes
Reality distortion fields don't emit actual products that work.
I'm not saying that a lot of great stuff doesn't come out of California/SV (just like Apple, for whom the 'reality distortion field' thing was first coined, also produces great products). The casualness with which you suppose that California alone is producing more innovation the entire rest of the country suggests that you're overwhelmingly focused on a very, very specific definition of 'innovation'.
I was talking about an idea more than a place, and should have made that clear.
The places where innovation comes from are going to be places that believe in the future, are open to experimentation and risk, and reason from first principles instead of cargo-cultism. It just seems like California (and SV in particular) has an above-average amount of these things.
Have you actually been to and/or lived in California?
[A little background about me: I was born in Cali, left when I was 6 months old, returned when I was in my late 20s, and stayed there for 5 years (San Diego).]
The reason I ask you this is that your viewpoint is why I went to Cali. But when I got there I found that the idea of Cali is very different from the reality of Cali. I have lived in a variety of places around the world, and I must honestly say that California was one of the worst...
Re your first point: (1) California believes in the future.
I would say NO, California believes in itself. They think (sometimes)that they are the future, but most often they build on what they have today because they fear about losing it. Not about what they can do tomorrow. A lot of what they do is about preserving the image of what they are, not about progress or the future. And as for the people (stereotypically)... Rednecks, gangbangers, surfer-dudes... There are a lot of them.
Your second quote: (2) California reasons from first principles more than elsewhere. Everyone else looks at what everyone else is doing and tries to superficially copy what looks like it works...
I think here you have it 50-50. Yes, some new things come out of Cali, but on the whole, they copy, (it's just that sometimes the copy is way better than the original)Except the idea of copy is a little changed, they don't copy exactly, they take an idea and 'shift' it. First is was a shift from real world to online. At the moment it's a shift from many to individual (online).
And your quote does need repeating, as is sums up Cali well, from gold rush to dotcom boom -
"For the engine which drives Enterprise is not Thrift, but Profit." - John Maynard Keynes
San Diego is something of a Silicon Valley for genetics and other life sciences, LA is/was something of a hub for aerospace and arguably movie technology (it's more diversified now, but does have a Silicon Beach movement).
I'm not sure what objective measurement one could use to really determine "innovation", maybe economic activity from industries or products established within the last x years?
I don't really believe there is such a great divide. In a greater probability most of those who are "genius" in childhood will continuously perform better when they become adults, in all fields including "doing" things. Sure there are some prodigies who turn out to be quite useless in real-world scenarios, but those are really few, IMO.
That's probably too far-stretched. In fact I believe conventional wisdom states the opposite, that those who get high scores in tests will likely be technical geniuses who understand how things work and do the hands-on stuffs, while those who manage are likely those who know how to talk but don't know how to study. MBA is more of a place to socialize, not to "study" things, right?
"MBA is more of a place to socialize, not to 'study' things, right?"
What? Go take a financial statements analysis class and then tell me how MBAs don't "study" things. There are certainly ways to coast through an MBA program, as there are ways to coast through many things. Simply because MBAs don't have to go through the mathematical rigor that an engineer or physicist does does not mean there is NO rigor or requirements necessary to attain an MBA. There are many vacuous, over-confident, arrogant MBAs out there, but that is part of the human condition not simply inherent in those who go earn MBAs.
This broad (and widely inaccurate) characterization of hundreds of thousands of people is mind-boggling.
Not to sound arrogant, but I took a few MBA courses which included Enterprise Finance and Operations Management. There is some rigor to the courses, and I found the finance class in particular interesting and applicable. However, the level of difficulty was at least one order of magnitude below the engineering courses I had taken, when compared EE & Physics courses. Aside from some term memorization the math was really easy and "coasting through" was definitely possible if you're used to stuff like semiconductor physics.
I agree - an MBA is not engineering, and many in my class would have been unable at that stage to finishing 3rd year engineering mathematics. A few of us had engineering backgrounds though, and some very deep at that.
However there is (usually) a deliberate effort to overload students with volumes of work, so that they can figure out how the real world works and work in teams.
Also in my MBA course students had a minimum of quantitative work they had to do, and if they wanted they could dive deeply into the more serious mathematics in certain courses. It was part of the expectations that people who were more technical or more experienced in one area would help out those who had less experience, and vice versa.
Engineering mathematics is not for everyone, and indeed not required for every MBA graduate, but it certainly helps for the more quantitative courses. And finance at one school can differ wildly from finance at other schools. Look for the professors. Look at the courses people take.
But also look at the culture. Some universities are focussed on the money, others, like Yale, on much wider impact in business and public service.
There's a cohort of people who do particularly bad in academic measures (especially the standardized testing sort that is in such fashion now), that are exceptionally good at what they do. I haven't seen a statistical study, but there are many, many anecdotal accounts of scientists, inventors, and businessmen who did poorly in academic settings but were brilliant.
Incredible. Truly. I would have never guessed somebody with an MBA might start a company or work in management. Somebody with an MBA who also is capable of technical things? Stunning. You have opened my eyes; clearly getting an MBA allows one to create incredible things. These are incredible.
Which one of us is wearing the SV blinders again? What have MBAs done, in the capacity of MBAs, that is incredible? Founding or working at some tech startup is not incredible.
Your best defense of MBAs is that some are capable of doing other things as well. You may as well tell me that dogfood is a perfectly reasonable meal for humans because sometimes you feed your dog your leftovers: "Dogfood makes great people food. See, here is some dogfood that also happens to be people food""MBAs can create just as well as technical people. See, here are some MBAs who are technical people as well""Chiropractors aren't all quacks. See, here is a chiropractor who is also a licensed physical therapist."
I can only conclude that it is as I suspected; you are full of hot air.
The root cause of this is company ownership. Even if Page wants to follow an innovative approach, he might not be able to convince the board and the big shareholders to invest long term because they want to see their shares "appreciated".
If you want to keep innovating, the company need to stay nimble, with the owner(s) only interested in innovation. I don't know, maybe that's why the startup eco system works.
Another model that seems to work as well is the "duel roles". For example, Jeff Bezos lets the MBA optimize the hell out of Amazon, while he can play with Blue Origin in his spare time and focuses on more innovative technology ideas. Again, this is possible because Bezos probably has far more influence at Amazon than Page at Google.
Unless something has changed that I'm not aware of, Google has a share structure that gives Brin and Page effectively full control through shares in a separate class that has 10 times the voting power of the A shares that were offered in the IPO.
So if Page can't convince "the board and the big shareholders" I believe it means he can't convince Brin, not some horde of faceless MBA's or institutional investors.
Your assumption about Bezos relative influence over Amazon seems unlikely, as Bezos Amazon holdings and the lack of a similar share structure means Bezos has far less voting power at Amazon than Page has at Google. Last I heard, Bezos held less than 20% of the voting power at Amazon.
From a management perspective, you're forgetting about the obvious: the less than productive people. The benefit of giving employees no- or few-strings attached time to work on whatever is clear. Things like GMail, Apple 1, etc. The "cost" is that people are doing things that don't necessarily contribute to the bottom line -- for every GMail, there are 1,000 low-impact ideas.
When your ability to make money hand over fist starts to get challenged, it is difficult to continue giving people free reign, especially when your competitors focus on cost, cost, cost. HP was a great place that made oodles of money selling tank-like PCs (among many other things) that cost $3k. But then Dell came along, invested $0 in R&D and started cleaning HP's PC clock. Bell Labs was engineer/scientist nirvana, then the AT&T monopoly went away.
The other issue in big companies is that as people with direct connections to the business start losing control, the bureaucrats (well intentioned as they are) start moving in, and they worry about things that the engineers/etc didn't really care about. They are passionate about you using the appropriate powerpoint template, and will speak to your supervisor if you don't comply!
Re: productive people. We have this notion of the 10x producer, but the real problem is high variability within the same person's work.
I know productivity superstars, but if you catch them on the wrong day or at the wrong time, they look like lazy bums. Over a year, they're extremely productive. On any given day, they may look like they're wasting time.
This property of conceptual work is at the core of a lot of culture clash with people who have more predictable work-comes-in, work-product-goes-out flows.
I know productivity superstars, but if you catch them on the wrong day or at the wrong time, they look like lazy bums.
I've encountered a particularly nasty variation of this since Agile became a Thing, where anyone who isn't writing code or running tests or showing up in the commit logs every few minutes obviously isn't working. The idea that it might be better to step back for an hour, or a day, or even a month, to think things through properly and maybe do some throwaway prototyping before you start pushing code to production, doesn't even seem to be accepted as credible any more in some quarters.
People don't recognize it as such because the LOC -- lines of code -- has an added time dimension now and a different name. In Agile / Scrum it's K-(issue/day) where issues take the place of raw lines and the metric is applied per unit of sprint duration.
But same idea, and same fallacy. It results in gobs of ugly Rube Goldberg machine code that's slow for fundamental O(crap) reasons and bug-ridden.
An org that calls what it does "agile" or "scrum" and then proceeds to accumulate technical debt like the Titanic taking on water is lying to itself about what it's doing. Piling up technical debt is a textbook Agile(flavor) failure, full stop.
What sounds like happened in the case(s) you describe is that someone with dev management preconceptions wore "Agile" like a wolf in sheep's clothing and proceeded to dole out the same old ad-hoc nonsense. Nonsense as in being "efficient" (high KLOCs/metrics, butts in seats, long hours, etc.) and not caring about being "effective" (working on the right problem vs a problem, necessary understanding of the company and customer needs, working smarter vs. simply harder, etc.).
I've seen this attitude a number of times, e.g. in program managers with history in big, established s/w companies. They learned a certain way of working, but then talk "Agile" as the trendy hire-word. Unfortunately, some of these folks never gained understanding of the tools that Agile brings to the table, and when/how to apply (or not apply) them to a situation.
I had a manager who believed that such metrics were the only true measure of performance. This same manager also believed that CUDA on a VM (which is itself on a server hosting numerous other VMs, and the bare-bones minimum graphics card--so no support for virtualized usage of CUDA) was a good suggestion for improving performance, that running a debugger on a specially compiled Apache webserver in the production environment would be a great way to troubleshoot performance issues, and that having an 8-12 week sprint/"rolling release cycle" was "Agile" as long as we called it that.
So, yeah, some people just don't get it. At all. And in my experience management is definitely a place where one is more likely to find such people.
1,000x yes! My productivity comes in intense bursts of effort, with quiescent periods of research and reflection between them (or what looks like goofing off to rigidly process-oriented sorts). Combine that variability with mandatory daily scrum meetings and it makes me want to figuratively slit my wrists.
I'll even go a step further. I have a reputation as one of those people who has an ability to get things done at an incredible pace, but there's definitely days where I'm flat-out procrastinating and being lazy.
For me, personally, and I suspect other people like me, it comes down to an ability to perform remarkably well under pressure, along with a lack of ability to perform well when the pressure is off. If there's no urgency to what I need to do, I find it very hard to commit myself to doing something.
It can also be an anxiety thing, if one has generalized anxiety disorder. The anxiety of doing something hard or with higher uncertainty (a challenging software problem) is high, and it takes the even greater anxiety of the high pressure environment to overrule it.
Worth investigating, because it seems like ADD, but it is not. ADHD drugs in this case can be counter-productive as they tend to increase anxiety.
There are techniques to cope with this that can be quite effective.
Over the years I've come to realize that what once felt like procrastination is actually my brain working out the solution to a problem, and it quite literally prevents me from reducing the solution to code until it's damned well ready for me to do. So I just go with it now. The only thing that seems to speed this process up is intense cardiovascular exercise, which is probably a good idea on its own anyway (but I imagine it seems awfully odd from the outside).
As for ADHD, I probably have a little of that going on with a sprinkling of Aspberger symptoms, but not seemingly in a sufficient way to have any significant effect on my life and/or overall productivity (except that is when it comes to %$!^ing daily scrum updates which drive me bonkers - once a week would be fine, once a day is ridiculous).
Today I spent 5 hours staring at, stepping through some callback-heavy code, reading HN, browsing the web and about an hour to write, test and deploy about 20 lines of code fixing a really nasty race condition. And I'm still not completely sure things are really fixed. I might have spent even longer had it not become apparent that we have just the two options:
1. band-aid around the problem
2. complete rewrite of a large portion of the website
I'll go even further and state that the problem is using MBAs to formulate how to manage creative sorts cough agile cough cargo-cult coding cough. if the area under your productivity curve is greater than everyone else around you, I don't give a you-know-what about the shape of the curve, you're doing just fine.
To be fair to agile though, I can see situations where it can work. The problem is that many of its adherents seem to see agile as a hammer and all software engineering as various forms of nails.
> The problem is that many of its adherents seem to see agile as a hammer and all software engineering as various forms of nails.
Agile isn't a methodology, but a metamethodology -- or, in terms of the metaphor, it isn't a hammer, it is a set of guidelines to use in selecting tools.
Scrum is a hammer, but Scrum ≠ Agile. Often rigorous adherence to particular methodologies (usually Scrum) get misidentified as being "Agile", but rigorous adherence to a particular methodology is not only not the same as Agile, but is directly contrary to Agile principles (particularly, its a direct violation of the first value from the Agile Manifesto, "Individuals and interactions over processes and tools".)
Except that every incarnation of Agile that I've encountered is a rigid implementation of scrum plus sprint planning plus Jira. And this quickly becomes Waterfall with scrum. And it really sucks.
While I agree that this is against the agile manifesto, that's no excuse. This is how it ends up getting implemented in large corporate environments, a lot in fact, so methinks the agile fans ought to take some ownership of this recurring problem and either find a solution or stop shoving agile down everyone's throats.
Finally, I'd take a 30% pay cut to escape agile to do exactly the same work I'm doing right now minus scrum. I'd get more work done and I'd feel better about it because I would no longer feel like I have the engineering equivalent of an ankle monitor attached to me. That's more than worth the loss of compensation to me.
> Except that every incarnation of Agile that I've encountered is a rigid implementation of scrum plus sprint planning plus Jira.
This is not a problem with Agile; anything that works anywhere will lead to imitations that steal the name and attempt to extract some simple recipe from the "lessons" of that thing that worked.
> While I agree that this is against the agile manifesto, that's no excuse. This is how it ends up getting implemented in large corporate environments
No, its how something that is nothing like Agile gets implemented in large corporate environments and called Agile.
Fundamentally, this is a symptom of a broader leadership culture issue environments in the authority structure and culture has people that neither know nor care to know about the domain have authority for decision making within that domain, and its certainly beyond the power of people external to the affected organizations with an interest in particular approaches to problems in any given domain (software development or otherwise) to do much about. It is, however, a pervasive problem in large bureaucracies (not only corporate ones.)
If the Agile Manifesto were just that and little more, I'd agree with you...
But instead it has become an enormous metastasizing moneymaker for minting Certified Scrum Masters, Certified Scrum Product Owners, Agile Certified Practitioners, and all sorts of other Agile titles for $1000+ a pop. So I guess we're going to have to disagree because I think this means a little ownership of the issues that arise in the practice resulting from that training is appropriate here. Because what I'm hearing from you now sounds a lot like the usual "You're doing it wrong!" refrain which accomplishes precisely nothing.
> But instead it has become an enormous metastasizing moneymaker for minting Certified Scrum Masters, Certified Scrum Product Owners, Agile Certified Practitioners, and all sorts of other Agile titles for $1000+ a pop.
As long as there are people looking for packaged solutions and willing to pay top dollar for them, there will be people willing to sell them to you under any name that you ask.
But if the name on the tin is refers to something diametrically opposed to that kind of packaged-solution approach, well, its probably not going to be an accurate label.
Me too. My productivity curve looks very rocky, with very tall spikes -- huge amounts of very hard stuff done in hours -- and days where nothing happens. There seems to be a longer-duration cycle too. I have super-productive weeks and ho-hum weeks. Overall the average is decently high.
The "cost" is that people are doing things that don't necessarily contribute to the bottom line -- for every GMail, there are 1,000 low-impact ideas.
Isn't that the motivation for the whole 20% idea, though? If you can produce 1 GMail for every 1,000 ideas, it probably doesn't matter if the other 999 didn't produce much of tangible value, because the programme almost certainly paid for itself just on that one success anyway. Meanwhile, you still get to enjoy the morale benefits for all 1,000 staff for the other 80% of their time when they are working on assigned tasks.
I agree. But as an organization grows, the points of view grow. People focus on their niche, and don't necessarily get the big picture. Also, the political environment in a company changes as the company grows, and tends to not reward speculative activity well. If you invent GMail, your boss becomes VP or gets more people/prestise/money/etc, If you invent Orkut, your boss gets to talk about how popular it is in Brazil.
One of the bad side effects of innovative, rapidly developed things is that the support org gets left behind. When the organization is small, this isn't a huge problem. When you're a huge company, the Exec VP of Support has an incentive structure to deliver better support. That VP will lobby for more controlled changes and slower product release cycles.
I've worked in places where most of the organization would be angry if some team invented GMail. They didn't welcome disruption.
> From a management perspective, you're forgetting about the obvious: the less than productive people. The benefit of giving employees no- or few-strings attached time to work on whatever is clear. Things like GMail, Apple 1, etc. The "cost" is that people are doing things that don't necessarily contribute to the bottom line -- for every GMail, there are 1,000 low-impact ideas.
Actually, there are other reason for non-rigid 20% time (that is, the 20% is a target with considerable variation in the short term); it means that resources across the company and in any team aren't fully committed on critical tasks routinely, so surging due to an emergent need doesn't mean dropping the ball somewhere else. When routine utilization gets too high, this rapidly becomes a very significant effect.
Its also a way that people gain experience and understanding and avoid developing tunnel vision around the way things are done on their exisiting primary products, and so become more efficient.
In the case of Google's 20%. The numbers are easy to quantify, how much does 20% of the engineering staff's time cost? How much money has the output of 20% time earned? It might be that Google thought the work was too unfocused, and outside of some pretty obvious early big hits, fairly little else of value was coming out of the work year after year.
The best way to deal with it, I think, is to have people submit proposals, pick the best, then take those people out of regular work for a few months and put them into a "lab" where they come up with an MVP. If it looks good at that stage, invest more in the idea.
When your ability to make money hand over fist starts to get challenged, it is difficult to continue giving people free reign, especially when your competitors focus on cost, cost, cost.
That kind of thinking sounds like it would lead to a "race to the bottom" to me. If everybody is obsessing over - and competing on - a quest to cut costs the most and the fastest, I really don't see how anybody is going to benefit from that in the long run.
Or to put it another way: "You can't cost cut your way to a growing company".
Of course, I'm not saying there's never a time when circumstances change and some cost-cutting might be called for. But cost-cutting is a tactic, IMO, and not a strategy. Innovation, on the other hand, and committing to the activities that lead to more and better innovation, is a strategy.
My feeling: If you want to grow, you have to innovate. So if you reasonably believe that "20% time" is an approach that leads to useful innovations, then cutting it is a short-sighted, and arguably mistake, move.
Kind of a strange point on cost cutting, but how does this fall into the arguement of "paying for talent" when hiring your executive level vs "race to the bottom" point of view for your employees? I've seen this vomitous 180 flip of statement coming from the same company in a short timespan.
The top gets paid an exponential figure for 'talent', but is ignored in any cost cutting measure... yet, any purely non financial 'talent' sets you on a crash course race towards minimum wage of "Oh, you did awesome this year, but times are lean.. here is a 2% raise."
Maybe I am more irked now because the company I work for just got bought by a huge company and R&D staff was slashed in half and "No more research." became a mandate
And then consider that Google's hiring standards seem to have decreased as they need a lot of people and not just the best. Thus 20% of more average people's time is going to be a lot less valuable on average.
While their standards have definitely dropped because they hired me in 2011, they then proceeded to assign hirees like myself to all the work no one else wanted to do around the googleplex.
I suspect this was one of Larry's failed experiments because a whole bunch of the people I met were let go within a year. I personally fled the place after a couple months of trying and failing to find work remotely suitable to my skillset, which was, ironically, what led them to recruit me in the first place.
I've gone on about this elsewhere (search my comments), but it comes down to the utter stupidity of blind allocation for experienced engineers. There were projects that literally needed my exact skill set, and engineers on those teams did their best to try and open up a position for me on them, but middle-level management and HR blocked all their efforts.
I could have stayed a year and hoped for the best, but by then I suspect I would have been so embittered that I would have become the embodiment of a bad culture fit so I left before that happened because I had a great opportunity dropped right into my lap.
Now I suspect I am blacklisted at Google because a few people have tried to get me rehired now that such openings exist and they were immediately shut down by HR.
I'm curious - were the projects you wanted to transfer to in niche technical areas or niche products?
It's very easy at Google to transfer from niche to core. If we (in Search) see someone languishing in another part of the company with skills that we want and they want to work with us, we make the transfer happen, and there's nothing HR or another manager can do about it. It's much harder to transfer from core to niche, and it usually requires a solid track record of sustained performance in your original assignment. I know a number of people that transfer from Search to Google-X after 4-5 years, but I know of virtually nobody that can make that transfer after 1-2. (Basically, the company wants to "make back" their initial investment in you before they'll let you work on speculative projects that may not show a return.)
Arguably some of the niche projects would be better done as startups - they don't face the constraints of working at a large, very visible multinational where they don't get resources or attention from higher management - but the entrepreneurial spirit isn't quite dead at Google.
I was in a core technical area trying to transfer into another core technical area in both cases (really, they needed me elsewhere, I could have made a genuine difference, and the blind allocation process completely hosed that up).
I also didn't know upfront that little tidbit that whatever assignment I took, I would be stuck there for 4-5 years. If I had known that, I would not have accepted my initial assignment, nor any other, until it was something I knew I'd remotely enjoy, and I'd probably still be there today.
So by relentlessly focusing on short-term ROI, Google lost 100% with me.
If they're going to insist on blind allocation, then they ought to not be surprised when it doesn't work out. But I gather the heuristic is to assume these cases are a 100% indicator of non-googliness.
From my perspective, Google recruited me aggressively away from a long-term gig where I had an absolutely stellar reputation. I uprooted my career with the mistaken belief that they wouldn't do this unless they had a reasonably clear idea what to do with me. Apparently they didn't and I'm not the only one who had an experience like that.
Sure, I could have said no and I take full responsibility for saying yes and for everything that happened as a result of doing so. And once I realized that Google was going to be of zero help in fixing what I think was a minor allocation error, I once again took responsibility to do what it took to fix the problem myself: I left.
So here's why I think they wouldn't help: the team onto which I was placed was losing an engineer a month. Every time they got a noogler to say yes (3 times during my short stay), another team would intercept them before they got to their first day on the job. The work was dreadful and tedious and the manager even seemed to hate running the team. And the only reason I said yes was because I had this naive faith that Google wouldn't do something as seemingly daft as blind allocation unless they had a pretty good idea how to make it work. My bad. But not my problem. High level people should have been fixing the root cause here instead of continually throwing nooglers into the pit and expecting a miracle.
I don't think you have a good characterization of this:
What Google has learned over the last few years is that the people they were hiring as "the best" weren't necessarily getting the job done any better than employees from more "average" backgrounds...who happen to be much more readily available in the job market.
I don't think Google's hiring standards have decreased, they've just shifted their focus away from inaccurate signals such as where you went to University and what your GPA was there. One could argue that Google's hiring standards have actually increased, as they're now hiring people who can demonstrate an ability to perform instead of people who were able to get a pretty piece of paper from Stanford.
Full disclosure: I'm a rising senior at Stanford, so maybe your comment is just irritating to me on a personal level. That said, the Stanford CS department is objectively very good; further, judging by the number of people I know who have abandoned or failed out of CS here, plenty of people wouldn't be able to complete the coursework for the undergrad degree even if they were all enrolled. I agree that hiring people based on their school is bad practice (see: people failing out of CS), but I don't think it's fair to call any engineering degree a "pretty piece of paper." I've put too much work into mine for that.
Ability to complete coursework is not necessary and sufficient for being a good engineer in a company. Sorry. I've seen too many people flounder around, never completing things, making inane suggestions, and so on, all while talking great theory. Of course, I've seen the opposite, and Stanford is a very good school, I don't think anyone would deny that.
And that shouldn't be surprising. Look at brilliant physicists. Most end up in either the theoretical or experimental side, and are often quite bad at the other. Likewise, theorem heavy CS has its place, but getting through a program like that doesn't mean that you can write a for loop (I've interviewed Stanford grads that fumbled and failed though that), design readable, robust software, push through a sea of decisions and make effective, near optimal decisions (the whole SW life cycle is a n-dimensional optimization problem), get along with peers, and so on.
There is a huge cachet attached to degrees from certain institutions that really isn't deserved, in my opinion. In that sense the paper is "pretty". It's not a slam of the effort anyone at is undoubtedly making at the school, but the reverent regard with which it is regarded.
Except that's really all it is. You might be fancy with your degree for a short period of time and land some interviews others might not, but it soon all goes out the window. The second you have some sort of industry experience, where you went to school and how you did there doesn't really matter.
Your "pretty piece of paper" is essentially like getting your drivers license. It allows you get behind the wheel, but it makes no guarantees you'll be any good at driving. In the end it really doesn't matter much which DMV you go to.
Second that. We engineers have our own perspectives but the management has theirs and it would be unfair to say ours are unconditionally better. If the management thinks in that way there must be a reason for it, and then constructive communication + concessions on both sides would be the real way to achieving a better end.
If someone is "less than productive" you let them go. If they could use some improvement, encourage them to spend their 20% non-core work time learning and improving their basic abilities. Better to grow a less-productive employee who could improve than to roll the dice and try someone else, or expect anything to change while piling on a full workload of critical tasks.
> proven short-term penny-wise/pound-foolish idiocy of MBA-think.
This is a completely unjust attack. Quite frankly, I have no idea what "MBA-think" even is. You make an assumption that an MBA making a bad decision is making a bad decision because they have an MBA. That doesn't pass the test. Would the same person make the same decision even without the MBA?
I always seem to get sensitive over the general MBA hate expressed at HN. As someone who spent years in web development before getting an MBA, I completely fail to connect to any of the insults typically thrown at MBA's on here. I certainly don't recall a class where we learned it's best to destroy 20% time. I don't recall ever being indoctrinated to the type of business thinking that is negatively attributed to MBA's. I recall getting an education on things like finance, economics, marketing, strategy, operations, etc. that weren't covered in my undergraduate technical degree.
I appreciate the developer-oriented aspects of software startups and Hacker News and I'm certain that many people have encountered assholes who happen to hold MBA degrees. I'm certain the degree attracts certain segments, I clearly had some as classmates, but attributing every business decision you disagree with as MBA-think is not a good approach.
This just seems like taking shots at a fuzzy construct for sake of taking shots and I'm not sure what value it adds to the discussion. I'd rather see legitimate reasons why removing 20% time is a bad idea for Google's operations.
I say this as somebody who suffered through getting a professional management degree as well:
I think the observed pattern is that we repeatedly see startups get kicked off, grow like wildfire, then turned into an empty shell of their former selves once the "professional management team" is brought in as they promptly kill off all of the reasons the company was growing in the first place in favor of short-term (bonus making) metrics that are almost never good for long-term growth and survivability.
It repeats over and over and over again and it's especially frustrating when you're on the inside watching outsiders come in as VPs who's only qualification is a top-10 MBA destroy unbelievably large numbers of man-hours of work and turn thriving companies into joyless bean counting husks.
I remember vaguely going through my own management education specific moments where I stood back and realized what a smoking pile of self-serving bullshit and handwaving the professional management industry had become. Most of what we were studying was full of vague and meaningless, but impressive sounding, aphorisms and pretend sciency/engineeringy sounding talk. Management methods were described like bold scientific experiments but constructed of the flimsiest methodology one could come up with. I felt like the books we were reading were consistently written by flimflam men who had no consistent measurable success and wrote endlessly about management theory with the structure of those late night get rich infomercials where they talk endlessly about they're going to show you how to achieve success, but then never actually tell you. Hundreds upon hundreds of pages of it.
I've since tried to purge most of my management education from me. The only thing it really got me used to was a sense of comfort with sitting in front of spreadsheets all day, moving around millions of dollars, and writing status reports.
Matthew Stewart's "the management myth" runs with this thesis. Google it - the Atlantic article is a great read. He explicitly links the Tom Peters types with televangelists and self help infomercial pitchmen.
I remember this article when it came out and thinking how well it mirrored my own experience. I almost feel like I just summarized his 5 pages ;)
The Mayo lighting experiment is an awesome and sadly typical example of the kind of shit poor "research" that goes into the field. With premises, methodologies and outcomes so flimsy a six year old could poke holes in it. Yet these kinds of "studies" are published and taken as a great advances and contributions to "management science".
Before you know it, based on one or two of this "studies", great fads sweep the ranks of professional management and we end up with bizarre and counter-productive management initiatives. When those plans inevitably fails and some consulting firm is brought in and recommends a house cleaning, new management is brought in who's only worth is that they're more up to date on the latest fads and reshape the company along those lines...generating lots and lots of activity (reorg after reorg after reorg) but no actual value.
Part of the problem is that it's immensely difficult to do science with people.
The hardest of the social sciences will create experiments where they try to study a single variable, like a person's reaction to a specific set of stimuli or decision making under a certain specific set of conditions. That way you can at least pretend to control for things.
It is simply impossible to do this in management. There are millions of variables. You can't know them all, control them, or do multiple runs of an experiment.
One of the more recent management fads has been complex systems simulation -- trying to do computer simulations of difficult managerial problems. This can work for logistics, routing, and mechanistic process optimization, but you can't reduce human beings to "agents" in a model.
I'm of the opinion that the entire discipline is in need of a reboot. History has shown that most of the research into the management science bits is of an extremely poor quality and the field is in such a state of denial that they simply can't accept this.
One of the major issues is the concept that a person, with no specific experience of understanding of a certain industry can take a couple years of generic administration courses and get slapped into a VP role in any given company. This concept extends down to the worker bees in that the assumption is made that workers are fungible.
I think this is a fundamental flaw in current management theory that needs to be burned out of the entire field with extreme prejudice. It colors the entire field and I believe is the root cause of most of the major failures in the field.
The case of John Scully is a particularly notable example.
There are some schools that have toyed around with industry focused management degrees, a step in the right direction. You can learn how to manage a business in a particular kind of field...managing professional services in a software vertical is unbelievably different from managing the R&D division for a major cosmetics company, managing a small company is unbelievably different from managing in a megacorp.
I think also that MBAs simply shouldn't be available until a person has a few years of industry experience under their belt -- much like executive MBAs are today.
I think at the very least, because of the damage a shitty MBA student can do in the world, it should require industry specific professional certification that needs to be maintained and has an ethics bar like becoming a lawyer to self-censure particularly bad apples.
One of the major issues is the concept that a person, with no specific experience of understanding of a certain industry can take a couple years of generic administration courses and get slapped into a VP role in any given company.
My point is that I am curious if it is possible to change things so such a person won't be bad for the company after being slapped into the role.
> I'd rather see legitimate reasons why removing 20% time is a bad idea for Google's operations.
Technology has a viable lifetime before you need new technology. As a technology company, you therefore need to be invested in creating new technology or be willing to go in to the spiral of customer loss and only dealing with legacy systems before a slow death.
Statistically speaking, if you know most of your staff is intelligent and has experience in your market, you're more likely to get an outlier idea (one that is way off on the end of the bell curve, ie, actually really good) by casting a wide net, and listening to the bulk of your employees.
The problem is that to go anywhere, ideas need time to gestate and develop, so you have to give all those employees a little bit of time to develop new ideas for your company.
It's been a while since undergrad, but if you want, I could try to bust out an equation modeling (and predicting the expected value of) the likelihood you hit a really important idea in the wide-net situation versus the "dedicated research staff" one.
You're correct that there are smart MBAs, so it might be a bit unfair that "MBA" has become shorthand for something else. But it's not without cause. It's a stereotype with some basis in reality.
The key distinguishing factor to me of MBA-think is a combination of posturing with credentials and cargo cult thinking. The essence of this thought pattern consists of thinking divorced from real-world referents.
A strikingly similar cognitive anti-pattern can be found in the humanities, by the way.
I wonder if this is because business borrowed something rather toxic from the post-1970s "postmodern" intellectual meltdown of the humanities? The worst kind of MBAbabble that I've endured over the years reminds me very much of postmodern literary criticism in its vapid, posturing use of language to hide the fact that the speaker is not actually saying anything.
"Supercalifragilisticexpalidocious! If you say it loud enough you'll always sound precocious!"
In stereotypical MBA-think you have people reasoning about businesses without reasoning about the business -- about what the business actually physically does in the real world. So you see something similar to the cargo-cultish application of design patterns in programming. A management practice will be applied because it worked once in business X, but it's being applied to a business with wildly different characteristics.
At no point is an attempt made to actually walk the halls, talk to the boots on the ground, actually ascertain the concrete nature of the business one is managing in order to tie one's thinking to reality.
Finally, there's the ugly aspect: all of this is posturing to justify unjustly high compensation relative to the people who do real work.
Back to programming, I have run into "enterprise architects" who do not know what they're doing and who make more than the people in the organization who do. What they do know how to do is how to sound impressive.
Back to the humanities, it's sort of transparent to me that postmodern psychobabble is a similar sort of impostiture to hide the fact that the people in question are supposed to be cultural vanguards but in reality have less to say than the street graffiti artists who tag up their buildings at night. Personally I'd fire the humanities people and then hang out in the bushes at 2am and offer the clever social critics with spray paint cans a job.
Elon Musk is a great example of someone at the absolute opposite end of the spectrum from stereotypical MBA-think.
He's not Tony Stark. He's not superhuman. What he does do is get his hands dirty. When he founded SpaceX he actually taught himself some bona fide rocket science so he would know what the hell he was talking about. He did a similar thing with Tesla, actually dove into some of the hard problems of electric car design himself so he'd have a clue. I'm sure he spends most of his days doing managerial things and raising money like any executive, but the fact that he's gotten grease on his hands means that when he reasons about his businesses he's reasoning about his businesses and not about abstractions divorced from reality.
His astonishing success at building businesses doing some of the hardest things one could possibly choose to build a business doing can be chalked up, IMHO, almost entirely to the fact that he is a smart guy reasoning about things instead of reasoning about hypothetical things. He does not confuse the map with the territory.
> I wonder if this is because business borrowed something rather toxic from the post-1970s "postmodern" intellectual meltdown of the humanities? The worst kind of MBAbabble that I've endured over the years reminds me very much of postmodern literary criticism in its vapid, posturing use of language to hide the fact that the speaker is not actually saying anything.
You described easily over 75% of the management textbooks I had to work through when I was getting my management degree. Vapid & content free. It was shocking sometimes to be reading a few chapters in a row, and not even realize different authors wrote them because they all had the same "voice" of page after page of absolutely nothing at all to say.
> It's sort of funny how Soviet business culture actually is.
Capitalist heirarchies look like state heirarchies in a system widely criticized as being "State Capitalism".
Funny to the people who think that the Soviet Union represents the polar opposite of capitalism, expected by the left-libertarians who noted that the Soviet Union recapitulated the features of capitalism central to the socialist critique of capitalism.
It goes more in the opposite direction I think. "The Firm" has a centrally planned economy that in the case of an organization like Google can easily be as big as a small country. So it naturally tends to behave the same way as any other large centrally planned economy.
The thing to understand is that the socialist critique of capitalism has always been that it is a system in which, both on the "micro" scale of firms and the "macro" scale of broader institutions, is centrally organized for the benefit of a narrow elite, with a distinct and well-defined (though, in the case of the "macro" scale, less formal than is the case in, e.g., feudalism) social heirarchy.
The heirarchical megacorporation existed before socialists invented the name "capitalism" to refer to and criticize the system which spawned such beasts, so the Soviet Union mirroring the heirarchical structure of such an entity -- with a similar elite vs. worker power relationship -- is exactly the USSR recapitulating features of capitalism central to the socialist critique, and not "the opposite direction".
It's interesting that you use Elon Musk as an example, since Max Levchin's interview in Founders at Work suggested that his only contribution to PayPal was to attempt to get them to switch all their servers over to Windows.
(Levchin, BTW, seems much more like someone who actually "gets his hands dirty" - which doesn't actually work out all that well sometimes, as evidenced by subsequent ventures like Slide that executed really well against a pointless market.)
> I'm convinced its pure cronyism and ass-covering.
I'm convinced it's not.
Betting on the long term at the expense of the short term is incredibly hard. Even the smartest people in the world will panic (and in some cases pivot) when doubts start to creep into their mind. I am sure all of us have been in a similar situation. It's always easy to judge from the outside but on the inside those decisions are tough, lonely, scary and rarely to do with just covering your own ass.
I'd believe you if the folks I'm recalling had a good track record of having built successful businesses, or if their thinking struck me as... well... thinking, rather than cargo cultism. I know what it looks like when a person is thinking -- even fallaciously or sloppily, but still rubbing neurons together -- and I know what it looks like when a person is bullshitting to give the appearance of thought when they really have nothing at all going on upstairs. Buzzwords divorced from meaning and used without proper context are a dead giveaway for cargo-cult thinking.
Now granted, I know far more about programming than business. I can spot a cargo cult programmer after three sentences. In business it takes me a lot longer, maybe 6-12 months of working with someone. But by then if I've watched the cargo cultism long enough I can be pretty sure that's what I'm seeing, and I stop giving the benefit of the doubt. Sometimes when someone repeatedly seems like an intellectual impostor, it's because they are.
"Even the smartest people in the world will panic (and in some cases pivot) when doubts start to creep into their mind."
I think that's a lame excuse. Maybe my expectations are irrational, but I expect the kind of people who get millions or tens of millions of dollars to experiment with to be fighter pilots, not bus drivers. And if you wreck the ten million dollar plane, you don't get to fly another right away. Someone else gets a turn.
I also expect them to be smarter than me. When I talk to them I should have the feeling I've talked to an intellectual superior, not an impostoring dumbass.
It downright offends me to see the American middle class collapsing and people with no jobs while this shit goes on. If you're an entrepreneur, you're a working stiff too. Your job is to create value, and probably jobs, by building new businesses. When ordinary working stiffs screw up they get passed over or fired. When these guys screw up they get promoted -- or at least endless second chances.
I think what it boils down to is credentialism and cronyism rather than performance-based investing. If I were an investor I would split my odds between two areas: taking a chance on newbies, and investing in people with proven track records. But I would not repeatedly invest in people with poor track records just because their resume says "MIT Sloan School of Business."
Yeah, it's a rant. You're talking to a war veteran here. I also earned these war stories in the Boston metro area, and have heard a fair number from a friend in New York. I've been told that this problem is worse on the East Coast due to the absolute worship of ivy league degrees and in-group connections there. The West Coast is more meritocratically-focused. Never lived or worked there, but the culture I've seen in the West supports that notion.
Whenever you see theoretically smart people acting in stupid ways you should consider incentives before deeming them idiots.
The prioritization of short term benefits is an obvious consequence of reward schemes that judge you based on yearly performance. There is little reason to invest in things that help the company long term if your pay depends on short-to-medium term results, unless you think your company might be going down and are fighting for job security.
> It boggles my mind, given the big money involved, why so many people continue to bet huge sums of cash on the proven short-term penny-wise/pound-foolish idiocy of MBA-think.
A lot of this "idiocy" is in fact rational (if unethical) behavior. At many large companies, upper management is rewarded for short-term gains. In response, these managers adopt strategies that produce short-term gains. If these gains can be boosted by risking the company's future, that too is a rational trade-off: The managers will be long gone when the company falls into decline, but in the meantime they will have collected a lot of pumped-up bonuses.
When people are paid today to burn tomorrow, why are we surprised that they reach for the matches?
> A lot of this "idiocy" is in fact rational behavior. At many large companies, upper management is rewarded for short-term gains.
The fact that microoptimizations that are harmful to the company in a broader perspective are rational on the part of individual mid-level managers working within the incentive framework provided by upper management, doesn't mean they aren't idiocy on the part of the upper management responsible for creating the incentive framework.
In fact, that means they are idiocy on the part of upper management.
I guess that conclusion would depend on whether the upper managers expected to better off (a) by staying at the same company for life or (b) by pumping the short-term returns and then using them as a shortcut to a better position at some other company, where the long-term consequences won't be felt.
This is a story about Google, which is still led by its technical founders (who are also huge equity holders with a long-term interest) and who don't have MBAs? If 20% is getting killed, it's getting killed because Larry Page wants it dead.
I don't think the decision had anything to do with money. It's part of the whole "more wood behind fewer arrows" initiative. Essentially, a defrag. 20% time was seen as having created too much fragmentation with little benefit. Gmail was the only major success to come from the program. Also, Google has a separate team for working on skunk works style projects.
Metaphor is not reality, but that metaphor is terrible. I'm an archer: you want as many arrows as fit in the quiver, and as far as more wood, well, we've switched to carbon fiber shafts for a reason. When you shoot an arrow, velocity gets you to your target, and velocity penetrates it too. Extra weight is a literal drag.
While Go doesn't directly generate any revenue, it's probably not without reason that Google is rewriting some important pieces (dl.google.com for example) in Go. I can imagine their engineers being much more expressive in Go than in C++, causing them to spend less time on writing the code as well as resulting in simpler code (easier to comprehend and maintain, so less time/money spent on maintenance). This doesn't generate revenue but it does optimize development processes, which could indirectly save them some money.
It boggles my mind, given the big money involved, why so many people continue to bet huge sums of cash on the proven short-term penny-wise/pound-foolish idiocy of MBA-think.
This is the con of being a public company: a lot of cynicism. Imagine that you have inside information that Blackberry will revolutionize the mobile market, you will put money in their stocks and may be move on fast once it increases significantly the price. Yes, value investing is very interesting but how many daily transactions are based on this thinking?
I think there was a lot of bias in favor of public companies and now we are realizing that staying private may be the best option if you think long term and don't want to deal with massive conflict of interest.
I've had a speculation for a while that this is why Google, Apple, and many other tech giants like to keep their stock float small and thus their stock price per share very high. I wonder if it's a way of trying to select for longer-term investors. ???
MBAs are just trained to optimize around the the current maximum in the "energy" landscape. These maxima are all too often not the best in the landscape, or even worse, can vanish over time as the landscape changes.
MBAs are like a gradient optimization algorithm without any simulated annealing process.
> MBAs are just trained to optimize around the the current maximum in the "energy" landscape. These maxima are all too often not the best in the landscape, or even worse, can vanish over time as the landscape changes.
> MBAs are like a gradient optimization algorithm without any simulated annealing process.
Now that is content-free babble. If you are a bot, more work is needed. If you are a human, you should be ashamed of yourself.
Companies like Google are not limited by money, they are limited by available people. There are only 1.3 million professional software developers in US. Make it 2 million to account for immigrable developers. Now you want to hire top 1% of the best of the best. How many can you hire? It's not money limitation, it's people limitation.
About MBAs, I don't think changes at Google is because of MBA-invasion. Most of the changes we see today at Google are actually directly influenced by Steve Jobs. When Larry Page became CEO, he requested mentoring meeting with Jobs which he surprisingly granted even though he was very angry about Android. The strongest point Jobs made to Larry was that company should do only 5 things and do it very well (paraphrase). Larry took this to heart and realized Google was extremely fragmented with lots of small undirected efforts going no where. Rest is the history... It's debatable if Google's old model was better than new one. Personally I think the best thing for a company is to keep continuous balance between two extremes. Historically, companies starts believing in one end, drift there and then realize that it's too much then drift towards another end.
Two years ago I was in Colombia and had lunch with 4 late twenties MIT MBA students interning in Medellin. One was ex-Google, one was a consultant at the Big 4.
They'd been there for a week, and told me they hadn't seen any of the city. After work they'd go to the gym or drive their rented car to a restaurant recommended by colleagues. Taxis were a max $3 if you live anywhere in the core, which they did.
On a walk to a restaurant famous for mondongo, we had to cross a 4 lane street. It was 9pm with no traffic and after waiting awhile I noticed the crossing signal didn't go off. I looked both ways with no car in sight and started walking, looking back expecting them to follow. They all stood there awkwardly, with no cars and no other pedestrians, for another 30 seconds, waiting for the walk signal to turn on, while I watched them from the other side. The signal never changed.
They were scared of the city. Anyone who has been to Medellin in the past few years knows there is little to fear.
Not all MBA's are like this, but this group just didn't get it. I realize this is more about travel fears than business smarts, but there is something to be said for people that can adapt and embrace new environments.
> I watched them do shit like destroy products that big customers had money in hand ready to pay for when they were inches away from release.
I'm watching friends in two different, reasonably large consulting companies (~700-1000 employees) suffer as their respective companies go through the consulting version of this kind of MBA suicide. In one case the company even decided to change their name and go through a rebranding. Some examples of the idiocy at work
- The rebranded company's schtick is to hire staff with advanced degrees (PhD preferred and multiple Masters) and at least 10 years of industry experience and charge bongo bucks for renting them out to do high-end but not necessarily mind-blowing work. Something like 80% of their contract staff has a PhD. Due to economic reasons they lost a couple medium-sized contracts. Their response was to lay off half of the PhD employees in the company because they were too expensive to keep around while they looked for new work. even ones who were already working on a contract and making money for the company.
This meant that they also had to cancel at least 3 more medium-sized contracts and a handful of smaller ones because they eliminated the staff who were working on them
At one point they also had two CTOs (because if one is good, two look even better) until they came to their senses and laid one of them off.
- At the other consulting firm, a similar pattern, tightening customer budgets meant that they decided to replace staff already on contract with cheaper, less experience, all new staff to pump up the profitability score on the spreadsheet. (they'd already laid off all of the idle staff not on contract, so without winning new business, some MBA thought that this was the best way to increase the numbers and get another bonus)
But now they've let go all of the people in the firm who had experience doing the work, sometimes decades of experience. And now there are no mentors, no experienced hands, nobody. The quality of the consulting work rapidly went down resulting in the loss of 2 contracts and senior positions that they'd normally fill from within required them to go outside of the firm for.
Both of these firms are in death spirals and all of the people that could help them pull out of it were fired.
At one company I used to work for, I also saw my leadership completely lose their minds and fire off all of the development staff, thinking we could coast with a new sales team and the product we had and pull ourselves into profitability. They also turned down trying to fill out profitable professional services contracts we had with staff because the margins were lower than selling new licenses. I also brought them significant new work in a different line of business where it was decided to turn it down because we didn't want to have to deal with low paid temp staff because "temp workers get paid more than their worth to their temp agencies".
"At one company I used to work for, I also saw my leadership completely lose their minds and fire off all of the development staff, thinking we could coast with a new sales team and the product we had and pull ourselves into profitability."
I watched this particular face-plant occur once as well. When they actually got customers the results were hilarious. Hilarious because I was not a direct employee, mind you.
It was like having a high-end trendy restaurant with excellent branding, great decor, a great location, and no food. So they run across the street to McDonalds and order fifty Big Macs, run back over, dress them up on plates (who will notice), and...
Running out of money sucks, but this maneuver was destined to fail from the get-go. Anyone who knows anything about tech could have told them that. One smarter alternative would have been to lean the development staff -- they had to -- and hire a small number of salespeople on contract (not full time) and offer them disproportionate bonuses to bring in sales.
What they actually did was fire anyone who knew how to make anything -- and in a way that burned bridges! -- and hire a bunch of sales guys full time and at full salary. Hilarity ensued.
What usually happens is that they've locked in some preferential options or stock grants + bonuses etc.
If the company hits it big despite them, the stock is awesome.
If the company does poorly they might miss a bonus but they'll still get their inflated salary.
If the company ends up on the rocks, they'll get their salary cut "till company performance improves" as their pay is usually tied to the performance of the company as an incentive.
But what invariably happens is that, even with their pay tied to company performance, the moment it gets cut, they high tail it out of there and land a new job with their top-10 MBA and another couple years of job experience...saying "I'm looking for growth opportunities" over and over again in their interviews.
I don't know if it's still true, but Facebook used to filter out these types by making them do a version of an engineering interview. Except instead of regurgitating algorithms you learned in college, MBAs had to regurgitate stuff from MBA school. Like derive the time-value of money, or discuss the TPM or whatever. The ones who coasted through MBA school got filtered out really quickly and the ones who took the subject seriously might pass the gauntlet.
Investors bank on most of their investments not succeeding, and the few that do making up for the rest.
The truth is, nobody knows how to bottle "success" and reproduce it -- but in a sense that's what management school is trying to do. With just the right management approach, applied in just the right ways, you can get Instagram instead of Color, or Google instead of Cuil.
The problem is that it's very easy to look at the failures and pick apart the problems. But it's very hard to look at the 1% that succeeds and figure out why -- and when it's attempted it usually overlooks the cases where the company succeeded despite having many of the problems the failed companies had.
Most companies succeed because of 90% dumb luck and 10% business strategy.
(hell, business is so screwed up people still don't understand how to define success. You see it here all the time that a "successful" startup is one that raises a huge round, not one that's profitable and growing...even BusinessWeek does this)
Early stage startup investors expect most investments to fail. Those investing in mature companies expect their investments to do well over many years.
I'm sure MBAs have plenty of stories of incredibly inefficient companies that have squandered opportunities. MBAs aren't about growing startups, they're about taking the now $1bn Instagram and doing more with it.
> I mean sure-- if your company is under cash flow pressure you have to pinch pennies. You have no choice.
Google's per-ad revenue was down 6% last year. Ads are 95% of their revenue. They have huge data to see trends.
Just because Google is still profitable doesn't mean that they aren't seeing a near future of red ink. Say per-ad revenue goes down 10% next year with the same costs and their profit goes from $10 billion-ish down to $5 billion. And if this decrease is a trend?
Competition from iAd and Bing Ads, smaller screens that are harder to advertize on, and so on. It's easy to see a near future Google that has to spam ads or make huge cuts to remain profitable.
Well, so they still have lots of money, and quite a lot of time to do something about it. It sounds like their core business is loosing to competitors, and their solution is to keep the old product (the one that they believe is failing) and cut research?
I don't think that the MBA is so important that it could be blamed for so many ills in the world of work, but I do think there are two fatal flaws with the modern MBA: Demography and intent.
1.) Demography: Who is the ideal MBA candidate? From what I've gathered, the historical answer would be: "Someone from outside a business education about to move into a business role." So, of course, your average MBA is going to be someone who studied Biology or Mechanical Engineering as an undergrad, right? Well, they're in there, but they're surrounded by people who studied Business and Economics as undergraduates, often from elite schools! What could a Wharton undergrad possible gain from a Wharton MBA? Social proof? A two-year vacation? It's unsettling, and it leads to the second problem.
2.) Intent: What sort of work is the MBA cut out for? Well, they're masters of administrating businesses, so...management? Nope. Consulting and banking. Like lemmings, they go right off the cliff into these fields. All of them. Even the ones who came in there looking to simply move up the ladder in their chosen field, like biotech or energy, will feel pressured into becoming some sort of banker or consultant. So, the MBA ends up becoming a launching pad for people outside of consulting and banking to get in, and for people on the inside to move up.
I don't know how business schools would go about rectifying these flaws. Even if they were to shut out business types, that second flaw is so deeply ingrained in the b-school ethos that anyone seeking to be a better manager in their original field would likely be derided by his or her peers as an underachiever.
Interestingly enough, I hear the Executive MBA is a far better experience, simply because the students are too far along in their careers to make a pivot into something else. They're just there to get better. And maybe for the two-year vacation thing as well.
These sorts of stunts also damage the company's and ecosystem's reputation. Its hard enough to get big customers to give startups a chance anyway (and I remember reading that big company buy in is one of the biggest issues in the U.K. startup scene, which I'm sure is not unique).
When you're small, you need a source of revenue quickly, or you'll die. You don't have a luxury to experiment too much, you have to build one thing that works.
When you're a huge company and have untold millions in cash, you can afford experimentation. In fact, you have to, because your revenue source is probably finite and you have to find another before the current source dries up.
This is why Google dived into mobile phones, self-driving cars, home entertainment, renewable energy, Internet providing, consumer cloud computing, goods delivery, etc. Some of the experiments became huge successes (see Android), some failed (see the long list of closed projects), some are too immature to judge (e.g. self-driving cars).
It just looks that experimentation is now locked at a thinner top exec level, while 'simple engineers' are not expected to do too much of it. Which is, of course, a pity.
When you're huge and cash-flush, you have the luxury of really innovating in truly hard areas.
This luxury is damn hard to obtain in a short-term gerbil-wheel economy like ours. Once you have it, throwing it away is like setting fire to a house as soon as you've paid off the mortgage or crashing your new luxury car as soon as you drive it off the lot. It is abysmally stupid and short-sighted. Investors should call for the heads of people who do this, literally. As in on a pike.
People think innovation comes from startups, but in reality it doesn't. Not because startups aren't smart and agile, but because they don't have the resources.
When I say innovation, I mean innovation. I don't mean application of existing innovations to new market areas or problem spaces. Startups excel at that.
But you'll never see a scrappy basement startup whip out a self-driving car, an artificial lung printed from a 3d printer, an orbit-capable reusable rocket, augmented reality goggles with a complete software stack, etc. Not unless the parts for those things already exist and can simply be combined in a novel way to yield a result in less than a year.
If you're big and cash flush, you can do what nobody else can do (except other monsters like you). You can do this.
That dent gets you a Ph.D, but if you do it for something of high economic value it gets you early entry into a market nobody else can enter because they don't know how.
If you do it, you've now created a piece of value that you can do one of many things with. You can feed it into your more short-term product-dev branches and do things nobody else can compete with, you can license it, or you can use it to pump up the prestige of your company in ways no advertising can.
"Holy crap! A self-driving car! And it really works. I mean, there it is, on the road, and it's driving better than I am and getting around faster than I am! I'm going to move all my business's hosting to Google Apps, cause they obviously have the smartest people on the planet..."
I do have the sense though -- and keep in mind I am an outsider -- that there might have been some "ADD" issues with Google's 20% policy as it was implemented. But I don't think the solution is to ditch it. The solution is to focus it, to try to get people to spend their 20% time pushing harder into deeper and more difficult areas instead of whipping out hacks. Maybe incentivize more people to work together more formally on 20% projects over longer spans of time, and incentivize them to tackle things that are very difficult... things only a big elephant can do instead of things a scrappy startup could do.
If an initiative doesn't seem far too wild, then it's not wild enough to be innovative. Quite a few lousy ideas seem too wild initially, but pretty much all of the actually valuable projects are as well.
When you're a big company, you usually get disrupted because you lost focus.
That sounds completely backwards to me. Big companies get disrupted because they are too locked-in to milking their current cash cow, and they either don't see - or consciously choose to ignore - any threat to that cash cow. It's more like a case of myopia combined with tunnel-vision, IMO.
Meanwhile, scrappy upstarts are experimenting and trying new ideas, find a better new approach, and can launch it and start growing it, while $BIGCORP remains blissfully unaware, until it's too late. Basically, the classic Innovator's Dilemma situation.
And while $BIGCORPs often ignore disruptive innovations even when they develop them themselves, it still seems to me that you're better off to be the one developing the disruptive innovation yourself, so you at least have a shot at adapting before somebody else comes along and takes your lunch money.
I'm not sure you could back that up with case studies. Most companies are disrupted because they focus too narrowly. They also tend to think they're in the "tool" business when they grew successful as a solution business. E.G. Whip and Buggy company think they're in the buggy business, get disrupted by a company that thinks they're in the transportation business.
Could be from University of North Dakota, who got the pleasure (early 90's) of being told by Microsoft that they only hired our graduates for Tech Support because we had a nice accent and worked hard (being, of course, all farmer's kids).
Oh, well, at least I had low debt (few $K, paid off easily) even though I got screwed on scholarships by my high school.