I’m a huge fan of a16z’s thoughtful pieces, both the podcast and individual blogs. This morning however, I found myself grinning and shaking my head through the podcast “Slow-Tech Companies Navigating in a Fast-Tech World” hosted by Michael Copeland @MVC interviewing guest PWC CTO Chris Curran @cbcurran.
The podcast is on-point regarding some major steps “slow-tech” companies can take to attract “fast-tech” talent and become better performing organizations (creating strike-teams with alternative agile pathways and creating a corporate learning function sourcing external ideas from the fast-moving world.)
Explore whether your organization has a desire to enable change, not just a desire for better end-results.
Unfortunately, the reality is far worse than discussed. Step 0 was missing in the discussion — explore whether your organization has a desire to enable change, not just a desire for better end-results. I can speak to this in detail as I’ve had the opportunity to work/consult with companies across the gamut of technical maturity and desire for change. I currently spend a lot of my time setting up a corporate innovation function.
Referring to excited interns at startups and agile large firms (Google, Uber, etc.), Chris Curran argues on the podcast that “that’s not the only place out there.” True, but that is probably the only place where ambitious, aggressive interns and new graduates will have an unhindered opportunity to quickly make large technical contributions and see them to fruition.
Michael Copeland notes that the slow-tech incumbents desperately need the ideas and energy of new graduates. True, they do, but having these ambitious new graduates would not help a firm with obstructionist innovation policies. Attracting talent without first fixing internal obstructionism is a huge disservice to ambitious technology graduates.
Michael Copeland correctly asks “What does the slow tech company have to offer” and Curran correctly points out there are “lots of interesting problems to solve and lots of interesting data to analyze.” This is also true, but none of that happens until a skunk-works team or fast-track is actually set up and measurably enabled to succeed.
There has to be a real desire for change, not just a desire for results. This means the c-suite has to enable those seeking agility and actively remove barriers to innovation efforts. Otherwise, why should students today work at “slow-tech” companies? Here are three obvious reasons they probably should not:
Reason 1: “Slow-tech” Companies’ Strategic Advantages Are Non-Technical
I’m not saying slow-tech companies cannot be successful, they obviously can be and indeed are. But their success usually stems from non-technical advantages:
- Existing sales and distribution channels
- Sheer momentum
- Strong legacy brands and recognition
- Existing Master Servicing Agreements
If you are a new graduate seeking to learn quickly and build something for the world, none of these are technical advantages. They are all advantages only once you actually build something, and all the advantages are in other departments, not in technology. How much fun can that be?
Reason 2: “Fast-tech” Companies Can Move 100x Faster
Yes, two orders of magnitude faster. Some of this is unfair, since many fast-tech companies can choose any technology, any stack, any framework and host externally with little legacy to carry. Much of it is legitimately faster — most fast-tech companies have modern policies that make development and product releases absurdly faster than slow-tech peers. Some simple examples:
- CIO-Obstructionism – I’ve worked at several slow-tech corporations where developers simply cannot get admin rights to their machines. At a fast-tech company installing a new package might be as easy as “venv pip install xyz”; at a slow-tech company it might be a three week process involving a half-dozen signoffs. Heck, you may not even be able to chat! Just because you are in a strike-team with an innovation mandate does not mean you are immune to regressive organizational policies.
- CTO-Obstructionism – I’ve worked at many slow-tech companies where getting a development or test environment can be a many-months effort. Granted, there are good reasons to control environments if you are at a capital markets or asset-management firm for example, but the restrictions are often one-size-fits-all. For example, even if you are developing a market surveillance application with no transactional information and no holdings information and nothing but public data, you still couldn’t host your application externally (e.g., AWS, Heroku, etc.) A fast-tech company can spin up a VM or use cloud services (often free tiers) while a slow-tech company slogs through months of cost benefit analyses. This makes throw-away prototyping efforts almost impossible at slow-tech firms. It consequently creates a low-tolerance for experimentation and fewer opportunities and experiences for new graduates. Even if you have complete architectural and functional freedom, you may find infrastructural to be a rate-limiting step.
- Architecture-Committees – Many Fortune 500 firm architecture committees are often just paper-mills where the only right answer is an Oracle or Microsoft stack. I’ve seen two slow-tech companies with blanket restrictions on open-source software. The SCO debacle didn’t help, but seriously, why would anyone block usage of an Apache HTTP server? Politically-motivated organizational flaming hoops which will hone new graduates’ political skills but will kill momentum and dampen motivation.
Reason 3: Risk Aversion is Lowest at Graduation, So Are Absolute Compensation Spreads
New graduates are likely to have the least personal carry they will ever have. Most are not yet married, likely do not have children, and are very unlikely to own homes. Why not use this singular best moment in life to reach for risk? New graduates can move anywhere without worrying about subletting/selling homes, they can work long or strange hours and meet other young energetic new graduates. You usually don’t have those opportunities at large stable firms.
Large “slow-tech” companies can usually pay senior workers more. The absolute compensation spread at entry-levels, however, are tiny or zero. So the only “cost” of working at fast-moving agile companies is probably only limited to greater risk of fledgling company bankruptcy. Seems like a great risk-reward-learning ratio.
What If You Are Already There?
So what happens when a fast-moving technology team finds themselves trapped in a slow-moving organization with a desire for results but without the willingness to actually enable it? I’ll share my experiences in another blog post, but I was stuck in this exact situation. AIG Investments’ CIO recruited me from Goldman Sachs in 2006. Both companies had huge Credit Default Swaps operations, but AIG Investments had a team of ~18 people managing operations with photocopiers and fax machines while Goldman Sachs had achieved a real-time firm-wide message bus. That is how wide the difference was — AIG Investments was almost 20 years behind.
Our CIO charged me with the transformation. We did achieve modernity eventually, but the effort was entirely organizational and political, not technical. While this was a superb opportunity for management consultants, I would hate to expose any aspiring technologist to such a grueling experience. They would have been much better off working at an agile FinTech startup. Not all technology graduates want to slog through a risky transformational project, many would just like to build & ship product and learn along the way. Some don’t know what they want, though i’d bet they prefer the likely certainty of the latter vs the risky proposition of the former.
On a related note, I’ll share our experiences on this particular project and our road-map for success in another blog posting soon.