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Technology Rewriting the Rules of Business
theStorminMormon writes "Fortune magazine is running a story describing the overthrow of Jack Welch's old rules of business. (Welch responds here.) Although the article lists Google and Apple as two paragons of the new rules of business, it fails to note that the old rules of business originated from straight manufacturing firms while the new rules of business are coming from the (more service-oriented) tech sector." From the article: "Steve Jobs has emphasized that Apple hires only people who are passionate about what they do (something that, to be fair, Welch also talked about). At Genentech, CEO Art Levinson says he actually screens out job applicants who ask too many questions about titles and options, because he wants only people who are driven to make drugs that help patients fight cancer."
If you are passionate about what you do, you'll get out of bed in the morning and actually look forward to going to work. Passion also drives you to do your best, not to just get by so you can collect a paycheck.
If "disco" means "I learn" in Latin, does "discothèque" mean "I learn technology"?
I work to live not live to work. I will do my job to the fullest, but I want a life. I don't want to wake up when I'm old and find that I'm alone and regretting that I didn't live my life instead of wasting it in the office.
It's always the crazy ideas that change the world. Of course not every crazy idea is a good one, and there are thousands of business that have gone under for thinking a little too outside the box. If you look around, there's really only one Amazon, only one Google, only one Apple. Companies that operate in more traditional ways seem to last longer on average, but nowadays they're often not leading things.
-mrxak
Onions Will Kill You
I surely hope they have other methods of screening applicants, because I think that some people are easily able to fool interviewers and sound passionate.
They are are just waiting to get hired and once they are, they lay back and start making all kinds of demands.
Got MILF? It does a body good!
From his rebuttal:
> When has there ever been a divergence between shareholders and customers? No one is out saying, "Let's screw this customer today, and if we do, our share price might go up 20 cents." They're just not doing it.
25 years later, the secret of his success slips out: he has never owned a wireless phone.
"Hire passionate people." Well, if that isn't touchy-feely management at its best.
Welch's rule was to grade your players and go with the A's. Some of us might call that a meritocracy. To the B or C graded employee, of course, it looks like an unbalanced, unfair gold-key system driven by self interest on the part of senior managers.
What's the alternative? "Hire passionate people."
Am I the only one who imagines the following conversation: "Look, Bob, I know you're working hard. Your code is better than everyone else's on the team, and that's great! You did a good job getting everybody working together on that one project, too, and you were right about cutting out those side jobs -- if we were still eating those expenditures this project would have crashed and burned months ago. But Dave's the right guy to get this promotion, even though we only brought him in from that middle-manager position at Nabisco three weeks ago, and I'll tell you why. Frankly Bob, you just don't have Dave's passion."
Breakfast served all day!
just a few people want to play with words to make ideas their own. As he pointed out in his rebuttal a lot of the ideas that are being set out for today are compatible if not part of the ideas he espoused.
I do agree with one item, weed out your worst. It is true. You will come to find that that passionate ones will not be lost in this. I'm in a company which doesn't do this, its a good old boy club. As such we still make money but never really move forward. We have so much deadwood it stifles innovation. The only time things change is when someone dies or retires.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
Whenever I hear the phrase "passionate about what you do" I get this eery feeling that they're going to offer up far more "passion" in their compensation package than "salary". Passion is all and well, and enjoying work is naturally important, but a large number of employers (especially in tech sectors) love to use the "passion" card as a way of underpaying their staff. If employees ever complain about meagre wages the employer can always counter with "But you LOVE this work! You should be glad to be doing this for a living!"
There's a fine line between passion and simple exploitation of that passion to get stuff done for cheap. And I don't trust most businessmen to look out for my best interests when cutting a deal.
I work to live not live to work. I will do my job to the fullest, but I want a life. I don't want to wake up when I'm old and find that I'm alone and regretting that I didn't live my life instead of wasting it in the office.
If your mission in life is best accomplished at the office, then how can spending your time there be a waste? If you are genuinely afraid that, when you are old, you will regret the time you spent at work, then maybe you chose your career poorly.
Many or even most people choose their career poorly. Sometimes this is avoidable. Sometimes it is not. Sometimes the best occupation is one that pays poorly or not at all. Too many don't even try. They just chase the money instead. But those who do manage to unify their passion with their career are more effective employees.
How dare someone be interested in their own benefits!?!?!
Some of you are confusing passion with obsession. A passionate employee loves his or her job and strives to do a good job - they don't necessarily devote their entire life to it. I know plenty of passionate people who have lives outside of the office. You can really love your job and try really hard without even taking it out of the office.
In my experience some of the people who are obsessed with their job (spending nights / weekends) actually hate it.
Does anyone else see a creepy Apple vs. Microsoft comparison here? I know a couple of managers at Microsoft, and the "old" rules sound exactly like what they do.
Haiku for you!
Well they can say what they want but, in my experience, the corporate sector thrives on mediocrity. Most companies want to hire average people and pay them an average amount of money, or a bit less if they can get away with it. I don't claim that this is necessarily wrong, just hypocritical.
They can go on about "passion" and wanting "the best people" but they know that passionate people can be difficult to deal with and the best people not only want the best money and benefits but they want some say in how things get done.
And would they hire someone "passionate" in their late forties or is this merely another codeword for "naive new graduate"?
Ame
Apple on the other hand is so clearly old line. Make quality and useful products targeted to an audience willing to pay for the products. Charge enough for the product to create a good profit. Give good service before, during, and after the sale. Charge enough so that at the end one has enough to pay for fixed costs, manufactureing, service, overhead, and research and development. Do not be afraid to change the product to meet demands, and throw in a bit of flash. This probably had not changed since Ford innovated the car in on color Black, with evolved into the mustang of many colors. I think the old Ford put some big dogs out of bussiness as well.
I understand what the article is saying, but the article is talking about established firm. Apple, as an established firm, did exactly what it was supposed to do. That is fixed itself. Apple has been, and is, a major manufacturer of consumer and proffesional intergrated computer solution. So is Dell. MS only supplies software. Apple is and will continue to be, at least in the near future, a to manufacuturer of high tech solutions. The have proven that they will adjust to meet new needs, just as old bussiness says they should. The article cites IBM, which also did what it needed to do. Refocus on the customer, develop customer oriented products that provided real value. They talk about how the iPod is unique, but how many new catagories of product did IBM help create? The selectric, the PC, SQL, GML, etc.
It is ludicrous to think that anything other than good products or services matter, or that creating new products is something new. IBM exists because it started creating products and focused on customers.
As far as google, that is a story yet to be wrote. They have an Enron like grasp on the ad market, unregulated, not transparent, unpredicatable. The success may be last remant of the dot com boom, or they may be able to leverage advertisers in the same way that TV did. If they are succesful, it will be nothing but bussiness as usual. Create a product, namely adwords, charge enough for it to generate a profit, and use some of the cash to innovate.
I think what happened, especially in the 70's and 80's, was the sense of entitlement of the big corporations. That somehow Americans were obligated to purchase the products no matter how horrible they were. In a perverse way, they were applying the soviet model to capitalism, where the people had to buy what they state supplied, except in out case capatilism provided such an oversupply that we had the illusion of choice. This was illustated with the government bailout of chrysler. In fact, some of the few comapnies that haven't leared thier lesson are in the auto industry. Chrsyler has so given up and is running ads featuring it German owner. In the end what we may be seeing is not new rules of bussiness, but the return to the basics. Make a product, sell a product at a fair price, and realize the consumer is the boss.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
For the vast majority of coders, business pays their salary.
That being said, I agree that this is an article for suits (well, what do you expect from Fortune) and it's packed with business jargon that means very little. A lot of non-tech types make fun of techie jargon, but the jargon means something; when we say "TCP/IP," it's because it's a lot quicker than saying "transmission control protocol and internet protocol," and a whole lot quicker than spelling out, in detail, what each of those terms actually means. Suits have long had a habit of either taking technical jargon (from various fields, not just CS) and twisting it until it doesn't mean anything, or just making up jargon that didn't mean anything in the first place.
"Six sigma," mentioned in the article, is a fine example of this. How many suits really understand what a "sigma" is in this (or any) context, or why six of them is an interesting quantity? Then the six-sigma crowd compounded their sins by using the phrase "black belt." And of course there's all the military talk they love to throw around, this bunch of lifelong civilians who wouldn't know which end of an M16 the bullet comes out of. As a mathematician, a martial artist, and a veteran, I find this particular combination to be the Holy Trinity of bad suit-speak.
So the answer to the question, "Why should we care?" is, "Because that's where the money is" -- but that shouldn't keep us from pointing out what a bunch of jackasses they are.
The correlation between ignorance of statistics and using "correlation is not causation" as an argument is close to 1.
See, i disagree. If you got into IT for creativity, you should have looked into marketing. IT is about standards, best practices, and things 'just working' for your customers (ie the company's internal people). Yes, there are places where creativity is good, but no more than any other 'office job' at the same company.
Lets see, i need a fool-proof disaster recovery scheme. Best practices or art? I choose best practices. File server? Yep, best practicies. Email? Exchange, please.
Like i said, there is room for creativity, but only here and there. IT is not alchemy by any stretch.
Han shot first.
"At Genentech, CEO Art Levinson says he actually screens out job applicants who ask too many questions about titles and options..." Mr. Levinson went on to say that he also screens anyone asking about salary, vacation, internal advancement, the company's business model, stock performance, or any other matters pertaining to the position. "I ask them, 'Do you want to cure cancer?' It's a simple 'yes or no' question. Any information about us is irrelavant."
With regard to hiring. . . After a company reaches a certain level of success and public recognition, large numbers of people start applying for jobs just because they want to work for a successful company -- not because they want to help make the company successful. In other words, they want to ride the gravy train. Those are the ones you have to weed out.
Start-ups and small companies rarely have this problem. It's after your company turns out to be Google, then everybody wants to climb on board.
In your example Bob IS the passionate person. From the factors the manager listed there is no way he hates his job and can write top code and work well with everybody. Being passionate about what you do isn't about saying how much you love it, its about waking up in the morning and WANTING to go to work and get stuff accomplished.
;P
The manager you imagined is just an example of a bad manager, and not how I imagine hiring passionate employees at all. I would imagine the manager hiring Bob and hearing Bob talk with enthusiasm about all the ideas he has to implement. Hed probably pass over the cookie cutter from Nabisco
"how can they call it a MINE if everything here is THEIRS?!?!" -Straight Jacket
You clearly either did not read the comment to which you replied, or did not understand it.
First, he's complaining about the name Six Sigma, and why it's stupid. He didn't claim Fortune invented it. He did say it's stupid, and why it's stupid. I happen to agree, but that's not really pertinent - the point is, your rant is ill informed (what I think you meant to say - an ill advised rant is one you shouldn't be making because it will have negative repercussions.)
As for using the names of martial arts belts for types of people (or whatever) in the six sigma methodology, he's complaining about this because it, too, is stupid. There's no such thing as a black belt manager unless we're talking about a dojo with a hierarchical management structure.
There is not a lot of meaningful dialogue in the article. Most of it is just being smug and self-assured for the sake of smugness and self-assurance. "Look how smart we are, we're rewriting the rules of business." In fact, from that standpoint, it looks a lot like a Cringely or Dvorak article. There's a small amount of meaningful dialogue in the article, which you could probably fit in a bee's butt and have room left over for what I know about molecular biology.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Suppose your workers' performance is in the 90th, 85th, and 80th percentiles for performance. In grade school, that would be a solid B-average workforce. Now the bottom gets slashed, knocking out all of the 80th percentile people. Who replaces them? If the workers' performance followed a Bell curve, the next percentage should be at 50%. Congratulations, you have just shot yourself in the foot.
Jack Welsh was another hardass CEO interested in his own self-interest and full of ego. That's the fact.
--Chag
The main rule is to remember what a business exists for. And that is not "to make money." Within three weeks of starting b-school we were being told that that was the route to disaster, because although that may be why people invest money or labour in the company, that is their reason, not the company.
The real purpose of a company is satisfy the wants and/or needs of a market segment at a price that the market segment is willing to pay. If you can do this and turn a profit, the company will continue. The market (And here, I mean the customer base, not the stock market.) does not care if you are making a profit. It does not care that your shareholders want ever-increasing profitability.
One of the thing about the "old rules" in the article is its emphasis on the stock price. This is to take your eye off of your market, and I contend that this is the major cause of most of the septic corporate behaviour in the world today.
In fairness to the CEOs, the market and thus the boards of directors insist on this devotion to share price. From the article: "Never before has a CEO more needed to take risks, but rarely has Wall Street been less receptive. A recent Booz Allen study found that a CEO is vulnerable to ouster if his stock price has lagged behind the S&P 500 by an average of 2 percent since he took the top job." (God forbid we should take a momentary hit is stock price because we are developing a new market.) "Cisco Systems CEO John Chambers says he knows a number of colleagues who are planning to step down because of the difficulty of balancing the shortterm pressures of the Street with what's in the longterm best interest of the company."
Despite what many people think about the "intelligence" of the stock market, the function of investment funds is only to make money. There is no incentive in the stock market to take the long view.
In the book "Up the Organization", the author, Robert Townsend, relates that when he was hired to be the CEO of Avis, he insisted on one condition: "Don't talk to me about the stock price for two years!" He didn't want to be distracted from the long term goals by worrying about the vagaries of the stock market. I have alwys thought Mr Townsend to be a very smart man.