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| rauniyar |
Posted
on 27-Apr-04 02:00 PM
Hi all,
here is something that I bumped across sometime ago that is worth reading. More so for those people who spend their significant amount of time working for some company, in a cubicle.
Uhi Rajeev,
CT, Amrika
The Case Against Professionalism
How We Have Managed Industry Almost to Death
By Robert X. Cringely
Two weeks ago in this column, we were lamenting the decline of industrial basic research, and last week, it was the decline of science at all in the absence of threats like Hitler and Stalin. But this week, in the culmination of our tragedies of the technical, we lay blame for both phenomena where it clearly and obviously belongs -- on the shriveled hearts and addled brains of professional management. We have managed our technical industries almost to death.
It is easy to forget that professionalism is the enemy of the high-tech startup. If these companies were operated by professionals, they would never have been founded. Nor would a professional tolerate the conditions necessary for startup survival. Michael Eisner never emptied a wastebasket at work, but I'll bet Walt Disney did.
Here is a scene that happens at some point in almost every young company. The founder/CEO/technical visionary meets with his board and finds him or herself out of a job. How could this happen? Well, the company has grown to the point where the board feels that "professional management" is required, so they are bringing in a new management team. The new team is composed of old friends and classmates of the board,
And the new team costs five to 10 times as much, but that's okay because the company is "hiring for growth." This new team cuts staff, cuts costs and out sources everything that can be outsourced, with the result that earnings are improved and the stock goes
up or the company makes itself look better for an Initial Public Offering. The professional managers get big bonuses, they exercise mountains of stock options sell those option shares, then go on to some other, even bigger, job having "saved" the company, which then stagnates, goes into a slow decline, and is eventually acquired by a competitor.
TO BE CONTINUED......
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| bisun |
Posted
on 27-Apr-04 07:11 PM
Rajeev dai,
I wish you had put all the three parts in one thread, as replies to the previous parts. That would have been easier to read and comment. Anyway here are some of the issues I have with the article posted:
1) Cringely seems obssessed with the preserving the past of a company. Why is it wrong to evolve? Do companies always need to have the same old identity? Why not change and acquire new face?
2) That being said, I agree with Cringely that once the founder leaves a company, the company usually goes down the hill. But I don't agree with the reason. The founder is only holding the company together because he has a major long term stake in the company (whether it be emotional, financial or otherwise). So the main cause of the down-hill of the company is not the lack of the founder of the company in the management team, but lack of the person with a major long term stake in it. Mostly the founder is replaced after the IP0. It is not that the new management team doesn't understand the company as well as the founder did or that it is not as capable as the founder to run the company. On the other hand they are usually better at management than the founder. But what they don't have that the founder had is the long-term interest in the company. Most come there to build their careers and move on, as Cringely himself has pointed out. Even if they are there to stay, they have to be accountable to shareholders on short-term basis rather than long term. The shareholders also doesn't really care about long term as long as they can sell their shares and make profits. So they welcome the hype surrounding the companies performance when it's in their interest, no matter the long term effect of the hype.
When we look around, we find that the most of the public companies that are doing well are the ones with a major shareholder who has relatevely major share in the company than the rest of the shareholders whose share (and hence interest in the well-being of the comapany) is diluted.
So I think the fault is with the system as whole rather than the founder being there or not. Look at what happens when a company is about to go public ( as Google is currently doing). The company hires marketers to hype their virtues. After going public, they have to live up to the image-- image not in the eyes of their custmores ( as was previously the case), but the image in the eyes of the Wall Street. The comapny starts playing games on the Wall Street, and the managers become more of politicians for their survival rather than entrepreneurs. So the comapany is bound to lose it's pre-founder (pre-IP0) values.
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| rauniyar |
Posted
on 28-Apr-04 01:40 PM
Bisun,
I agree that the real world gets dirtier as you approach the Wall St. You know, I know and the whole world knows. Management is rather an art than a science in that there is a difference between going to NY art musuem and taking that subway to wall St, hai na ta?
aa by the way, I was rather handicapped in not being able to send all the three parts together coz there are limitations to number of words you can post here at Sajha at a time. In fact I was diligent enough to be involved with Mr SAN for few email transacations of which the last that I wrote was not answered. Kai garne bhana na? (No puns intended for Admin here, but just a forethought that things could be worked out if we all work together for a cause.)
Last but not the least, I treasure the words that you had for me for coming back here. I shall try to get some more people here that could spark some interesting threads.
Uhi Rajeev,
CT, Amrika
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| bisun |
Posted
on 28-Apr-04 01:51 PM
One way around the limitation imposed by the number of words you can post at a time might be to post the rest of the article as reply to the first part. So you post the first part. Then reply to it and post the second part and so on until the whole article is posted.
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