Wednesday, January 28, 2004

Telirati Newsletter #40

Here in the archives of the Telirati we have a classic tragedy of bad management. It is as current as ever in informing the process of management selection in small ventures.

Telirati Newsletter #40: Care and Feeding

In the ecosphere of the enterprise there are two species that require special care and feeding: engineers and salespeople. Salespeople are, to me, a delightful mystery. They live eat and breathe interaction with customers. Yet, the last time I had the pleasure of sharing a car ride with three of them, they were volubly discussing the role of Altoids in White House affairs while I was on the phone with an important investor and potential customer. Engineers, on the other hand, are more my cuppa.

Companies that keep their engineers happy reap worthwhile rewards. They skate over the perils of product transitions, they build high walls around their markets, erecting a thicket of features that are hard to duplicate. They acquire a halo of high touch that can sustain them when they stumble.

Much has been written about keeping engineers happy, and most of it is useless. "Don't step in the leadership" just about sums up that body of work. In keeping with the general approach of these newsletters we will pursue more modest goals here: First, do no harm.

This is evidently harder than it sounds. I recently had a chance to see, at close range, how hard it is. First, be assured that the example I am giving here is taken from real life. It is not a composite or a cautionary fiction. Second, if you think at times I have gone over the top in describing managerial incompetence, I assure you the same situation can be mined to much greater depths and would yield up even worse. For example, the manager I will describe in this document includes in his technique being overtly nasty to a woman seven and a half months pregnant, who put in 80 hour weeks, while pregnant, to get a product out the door. So it isn?t that the villains here deserve protection from universal opprobrium. They go unnamed just because it isn't strictly necessary.

This story begins before your humble chronicler arrived on the scene, in a startup where a charismatic founder and leader has assembled a team of engineers that would be the envy of anyone. The company, having spent many months banging around between unsatisfactory product formulations, sought the stability and direction that some management structure might confer on the product development process. This founder, so brilliant at attracting and retaining top-flight engineers, has only a spotty record of hiring good managers. As a further examination of this example will show, this was the downfall of the company as well as of the founder. Nevertheless, the founder hired an experienced and credentialed manager, ex-of IBM's Lotus division (some of you can at this point see where this is headed, but stay put, it will be worse than your expectations). I should add he was ex-of the non-Notes part of Lotus that had managed to fritter away a very strong franchise in desktop productivity software. But the resume looked good, and he seemed nice enough.

It didn't turn out that way. He was out of touch. He did not get involved in implementation decisions, not out of confidence in his crew, but because of a something like a character defect. He required detailed reports, but did not ever get deeper than this needless paper to find out what was going on. He was what Machiavelli would have called an indolent prince. He arrived early and left rather early. Decisions were made around him, among the engineers and the company founder, late at night when real work was happening. Eventually this manager was, in effect, fired by the people working for him.

The story should have ended here, but it didn't. Lesson #1: Anyone can make a hiring mistake. But to really screw up, you have to botch the firing. The more-serious error here was in not getting rid of this guy the first time (oh yeah, there is a second time).

Engineering resources are too valuable to waste. This is true, but the wrong conclusion was drawn here. It is the people writing the code that are the resource that matters, especially if they are proven to be highly productive. But here, the failed manager was installed in another role: running the company's IT and e-commerce infrastructure.

OK, so you can guess the result. But it bears examination just for the lessons to be learned. An insecure and incompetent manager, rejected by the team he was hired to lead, will make some predictable hiring decisions: Web site development at this company was staffed by third-tier plodders that posed no threat to their second-rate manager (this, after an outsourcing misadventure). The result, for a company with ambitions of becoming the Dell of small business phone systems, was disastrous. A hideously expensive effort yielded up an e-commerce Web site so undistinguished that you can buy aftermarket Beanie Babies from slicker sites that were homemade by housewives. The champagne-grade enterprise software systems do not mesh well. Telesales is sluggish because customers call, intrigued by the product and price, but puzzled over what it does exactly, the Web site being almost opaque on the topic.

Can it get worse? As promised, it does. Through a series of connivances and errors, the board of this company dismissed its founder. As you may have guessed, the ex-VP of engineering, a failed, embittered, and vindictive bureaucrat, was part of the plot to oust the founder from his company. As a reward for supporting this move, he got his old job back, heading R&D as well as the firm's gold-plated yet leaden IT infrastructure. Before going on to describe just how well this is working out, let us recall that the lesson here is "First, do no harm." You are reading the story of how a mistake by a well-intentioned and decent founder, for whom the company's engineering team would walk through fire, got amplified into a full on catastrophe. It happened under the direction of managers who, though they might not be the most benevolent people on Earth, do not have the excuse of lack of experience. It happened under the chairmanship of a long-time pillar of the Boston venture capital community. It happened in a small company where the issues are all easy to see and take little time to grasp. It happened where the stakes are petty. It happened. And if you don't pay close attention to your engineers, it can happen to you.

So there it stands: A manager who failed so thoroughly once, and twice, is back to wreak revenge on the competent and hard-working people who gave him the boot. The environment cannot be described in terms of worker morale, which has evaporated completely, leaving only distilled venom. The engineers are openly contemptuous of their boss, who, in return, is boorish as he can be. He dare not fire them because he hasn't got a clue about how the product works. Headhunters swoop and hover, some of whom placed engineers at this company and were stiffed on their fees. The table has been set for the engineers who will quit right away: Internet startups with great pay and entrepreneurial upside have made their offers. It is tragic for this group of engineers to have to abandon their baby. But their current management has reached a level of awfulness that is comic. Flipping the boss the bird and not getting fired for it is entertaining enough to make some of the group stay on just to see how things turn out. The possibility of a recovery, for the engineering team and for the company in general, still exists, but it would be a reclamation, not a save. You see the picture as if on the moment of impact, like an Edgerton strobe photo of a hammer striking a porcelain vessel.

Copyright 1999 Zigurd Mednieks. May be reproduced and redistributed with attribution and this notice intact.