Malcolm Davis's Blog

"Why the little fish eat the big fish". - Motivation

With the right incentive, the unattainable can be attained
While fighting the Germans during WW II, General Patton's Army ran out of fuel and came to a halt. With no fuel to advance against the enemy, as a joke, Patton told his Army that they could have a pass (time off). The next day, a portion of Patton's Army was several hundred miles away in Paris. Somehow the soldiers had found fuel.

Proper requirements generate proper results
During the 80's a quality and cost study was conducted comparing military, commercial, and civilian avionics. Commercial avionics had the highest reliability, followed by civilian, then military. The military had the highest cost, followed by commercial then civilian. The military systems were the most expensive to produce, and had the highest failure rate.

Under further investigation, it was determined that the problem with the military avionics revolved around the issue of requirements. The military requirements went into how the system should be constructed, by stating specific components in the design. On the other hand, commercial requirements focused on the consequences of failure. If equipment failed during flight, the vendors are required to reimburse airlines for any cost attributable to the failure. For instance, the additional fuel cost as a result of a missed landing opportunity.

In both cases, it was the customer's requirement model that eventually determined the quality and cost of the product.

Service for fee or ASP
In the IT world, I have worked on projects enormously over-staffed, and which abide by every anti pattern process available. Why does this occur? Simple, the firm makes money by charging people. The more people the firm charges, the more the firm makes. If the people are too productive, there is less need for people on the project. Therefore, the firm makes less money.

What happens if someone would to walk into a corporate IT and offer to do the project for free? Everything would be provided including hardware, software, and support. There would also be a guarantee of quality of service. Instead of a 'flat fee' or 'fee for service', the customer would pay based on usage.

In the ASP model everybody wins; the customer pays less up front, the vendor receives a constant revenue stream. Since the ASP focus is on quality, cost and time to market, the manner in which software is developed is drastically different. This is why small commercial companies can run circles around large clunky IT shops. [Little fish eating the big fish].

Personal drive
My father was a big on incentives. While in high school, I was allowed to stay out all night, weekends, what ever, as long as I maintained all A's and B's. Once a C showed up, I was grounded. The rewards were obvious and making the grades was up to me.

Final thoughts
Motivation comes in many forms, and I don't blame managers or contract firms for looking offshore. The problem with corporate IT is an incentive model that breeds bad behavior. If the model is changed, management's behavior will change, and we will all be better off.

I want to thank Terry James for sharing his philosophy on the subject matter. I have spent many years in both the commercial and IT world; Terry helped me understand why the mindsets are so different. Thanks TJ.

Comments

• Motivation, incentives, measurement, & history lessons
  Your points are well taken. I have often used the phrase "Be careful how you incent". Incenting businesses to push their intellectual capital out of the country because they get a tax break to do so will result in a "brain drain" from the businesses. It is a great short-term win and a huge long-term loss. I like the WWII example you gave because I get to use another one to illustrate this point. Prior to WWII, the US found a place to dump all its excess scrap metal - Japan. Some of that same metal came back to the US on December 7, 1941 - delivered by air at Pearl Harbor. Short term win – resulting in a HUGE loss.

  On the topic of measuring benefits & results of offshoring - when using a metric to estimate benefits & later to measure results, if those metrics are active (i.e., the metric data is produced by the entity that is being measured), the metric will be reached regardless of what happens in the actual process. However, if the metric is passively collected (i.e., behind the scenes - independent of the entity performing the process), then you will get a true measure. The problem is that we have the offshoring firms and their representatives providing the data on how great offshoring is for the US! They purposely do not include the impact on tax flows to the governments (that get reduced as the wages go down or disappear altogether) and the demands for government services (that go up as citizens become unemployed and lose their health benefits). They exclude the impact on related industries such as banking as the consumer debt is not being repaid and bankruptcies grow at record pace.

  False advertising - The old joke about heaven and hell & being taken in by the "demo" comes to mind as offshoring firms hire what they refer to as "hood ornaments" (polished US consultant types) to represent them at sales meetings. It also brings to mind the credentials presented by these firms. For example:

  - MBA's from exotically named institutions (forget that MBA does not stand for Masters of Business Administration and is a mail order certificate from that exotically named institution).

  - "Senior" developers who have only been to a seminar and "Senior" project managers that have been coached into a certification, but really have only developed a single program.

  - "CMM Level 5 companies" that really have only certified a small department within the firm.

  In the end if you buy the demo, you get to spend some time in Hell. To quote some children - "Are we there yet?"

  I have come to agree with the concept of a “global economy”. I don't mind playing by a global set of rules. I only get upset when our country (the United States of America) is the only one that has to play by them. Our country put laws in place to protect workers from the same sub-standard conditions we are now paying companies in other nations to use. Would we pay a firm that used slave labor? Probably not – there is some limit to our corporate hypocrisy after all. Our country put privacy and security laws into effect that do not have to be and are not followed when that data goes offshore.

  So if offshoring is such a great thing for everyone in America, why are offshore call center resources trained to lie about their locations when asked? Why do the offshore call center firms have their people abandon their identities and assume "American-sounding names, and train them to lose their “accents”? Wait - I think we have another WWII analogy here -- people that did that during the war were called spies! This same subterfuge is part of another war -- an economic war that is being waged against America.

  So why are we inviting them in? Is it in the name of being "fair" or in the name of having a "global economy"? If we want a global economy, let's actually have a global economy - we can start by having all these nations repay all the loans that are outstanding. Once those are repaid, then we can talk business. Then we can ensure that the same laws protect all workers regardless of their locations, establish a level playing field and ensure everyone is protected against virtual slavery.

  Let's collect a "fair share" from all these countries for providing the world's police force. Better yet, let's outsource that job & take some of these low cost resources that are so readily available and trainable and send them to Iraq for a tour.

  Somehow, I doubt that will happen. Fair is only fair when the cash flows out of the US or into a CEO's pocket for having come up with a great short term savings.

  Wait - do I hear dive-bombers coming? Are we there yet?

  Ross Emerton
  Tellangon Associates, Ltd.
  

  Posted by: remerton on May 05, 2004 at 01:28 PM

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