In some organisations, the individual succeeds if the organisation as a whole is a success. This is often where the organisation is at risk, either a start up, an organisation in trouble, or continuity requires achieving success. In these organisations, success is only possible if all the individuals align their goals with the goals of the organisation. It is not possible for an individual to succeed if the organisation fails. A “risk managed” culture will normally emerge in this context.
In some organisation’s where continuity is guaranteed, the success of the individual is best achieved by out performing their colleagues. The individual succeeds by placing their own goals above those of the organisation. A “failure” culture will normally emerge in this context if the leadership do not act to prevent it.
In a “risk managed” culture, adoption of new values and practices will be natural and easy. In a “failure” culture, adoption of new values and practices will only occur it aligns with the goals of the individual, something that leadership has a huge impact upon.
The failureship in a failure culture is dominated by self interest. Even if the CEO is trying to improve the share price, they do not necessarily care about the long term future and health of the organisation. The goal is short term value extraction rather than long term growth. I worked at an organisation that was deeply damaged by the financial crisis and specifically the mismanagement of government. Prior to the crisis the CEO had been leveraging the strong national brand to build a trusted global brand. This was a slow and complex process of investment that would take years to evolve this centuries old institution to it next incarnation. The Crisis eventually lead to a new CEO. The new CEO retrenched and shifted to a short term national strategy and sold off the international assets to make the short term profit look good. This strategy distracted from his poor revenue figures. The CEO got their bonus at the expense of the future of the organisation.
Why does this self interest impact the quality of the developers that an organisation hires?
Consider two organisations. The first organisation hires the cheapest staff that they can find. They normally do this through a consultancy which is also driven by self interest. More later on that. The second organisation hires staff who cost twice as much but they need half the amount. The first organisation has two thousand (2,000) developers costing one (1) unit, and the second organisation has one thousand developers costing two (2) units each. Both organisations spend the same amount two thousand units (2,000) on developers. The organisations look like the following.
Although the cost of the workers is the same, the management headcount and the the cost of management have more than halved. Furthermore, if the workers are significantly more experienced, they will require much less support from management which means that those managers in Organisation 2 that have an outline could also potentially be removed. So the final result is a reduction in management headcount in the region of 50% to 75%. So if you want to understand why managers in a failure culture do not want to increase the quality of the workers, you only have to ask “Why don’t Turkeys vote for Christmas”. In a risk managed culture, management is focused on value rather than cost. The desire to move fast means that they want smaller teams of higher quality individuals.
In a failure culture, the failureship does not want to be held accountable for the quality of the workers. As a result, they do not hire directly but instead make extensive use of consultancies with a “global brand”. This also has the added advantage of reducing the quality of the workers even further which increases the demand for poor quality managers. Any decent worker can normally find their own work, either as a permanent or temporary member of staff. People join consultancies because they want to gain experience either in a skill set or in an industry. This is particularly true of graduates (that includes me) who want to get some experience in a variety of industries before deciding where they want to work. Whereas a permanent or contract individual receives 100% of the money paid by the organisation, a consultant from a “global brand” consultancy receives only 30% of the money paid for them. In effect the individual consultant is paying 70% of their fees to the “global brand” consultancy. They are paying that 70% fee for the learning experience that will eventually enable them to receive 100% of the fee. So why would the failureship pay such a huge premium for such poor quality staff? We have to remember that the motivation is self interest rather than the goals of the organisation. “Global Brand” consultancies look after their customers. In the event that a member of the failureship is fired, the “Global Brand” consultancy is incentivised to find that person another job, ideally with more authority as they are more likely to use the services again at their new organisation. Some consultancies even act as car parks for members of the failureship. Once again, asking a member of the failureship to move away from “Global Brand” consultancies to hiring competent individuals is like asking someone who is falling from an airplane to hand over their parachute.
My favourite experience of this nature was a meeting with a senior executive about Safe.
- Me: It is my strongest recommendation that we do not use SAFE because it is rubbish.
- Exec: No! We are going to use SAFE!
- Me: Why?
- Exec: Because I say so.
- Me: In that case let me introduce you to Martin (I still miss you Major Tom) who knows all the people with lots of experience with SAFE.
- Exec: No! It is more than SAFE so we are going to use the “Global Brand” Consultancy called *********
- Me: Why?
- Exec: My best friend is a partner with *********. He finishes his paternity leave next month so I want him to do it.
- Me: Is that the door? Must be going.
In this case it wasn’t even pure self interest, the executive placed the needs of his friend above the needs of the organisation… Though it always helps to keep the “Global Brand” happy in case you need them. 😉
Leaders in a “risk managed” culture would ensure the quality of each individual. They would invest in continual pipeline of high quality candidates preferring to find talent over filling roles.
A large organisation of poor quality individuals in a failure culture gives more opportunity to “leaders” in its failureship. Using “Global Brand” consultancies provides further job security.