Friday, September 4, 2009

The Passionate Programmer in Business

Last week I wrote about The Passionate Programmer, about my and Chad's very similar ideas on many things. I closed by saying that it's hardly feasible or sustainable for any SME to base the business on passionate programmers. Imagine my surprise opening the PragPub Magazine yesterday where Chad Fowler talks about replacing your people with the worst people available. The idea is quite old and comes from Michael Gerber's The E-Myth Revisited. I read this book back in 2005 and I've been in internal fight with this book ever since. Even in my bookshelf it sits right next to it's antithesis Good to Great by Jim Collins. The idea Chad is getting at is that you should replace great people with great systems and get mediocre people to be run by those systems. Much like a clock - made of hundreds of small cogs and pieces, each easily replaceable and while totally insignificant alone, having a specific, clearly defined and essential role in the clock.

Let's backtrack a bit. I really loved The E-Myth Revisited book for the questions it asks. In fact, a bigger part of the book is dedicated to depicting a typical small business. Painstakingly describing day after day with such a detail and accuracy - I don't know a business owner who wouldn't resonate with every page. Unfortunately, it leaves out most of the answers. Actually, the answers are there, but while you can really feel the pain of the questions, the answers are put almost bluntly - like an external consultant just took over and reads his 6 steps to happiness. It took 10 years for the real answers to arrive. They're in the E-Myth Mastery. While this book never neared the popularity of the first one, I found it infinitely more useful. The main difference is that while the questions remained, the second book provides actual answers. While the first one is based on observation and consultancy, the second is based on first hand experience and the author lives through every sentence. I bought the book in 2006 but I didn't get round to reading it until late 2008. And it was a deja-vu. I read maybe 50 books over those 2 years - yet I didn't read the one that could/would have actually helped me. It was like somebody wrote a book about the what was going to happen, but I couldn't read it because I was too busy heading for the catastrophes I could have avoided if I just read the damn book.

Now back to the good vs. bad people question. Our business is streamlining and automating of business processes. Over the years we worked with companies from more than 30 different industries. Anything from travel agents, through media, manufacturing, logistics to financial consultants and portfolio management. People usually get our systems to either decrease their staff numbers while increasing performance or keep the numbers and radically improve performance. The way to do it is based on what Michael Gerber says - take a process and orchestrate it. In our case, it's followed by computerization, where the computer system does the heavy lifting. In Michael Gerber's case, once the system is orchestrated, the cogs (aka the least qualified people you can find) can be put in places and the show is ready to go on. Your role as a mastermind, is to grease the cogs, innovate and move from technician to manager (and later to businessman). This has worked remarkably well - just look around - this is the principle behind every McDonald's, Burger King, Starbucks, Subway, and so on. As a freshman in university I applied for job in McDonald's but at the end chose to work in research institute. I regret that decision to this very day. While I made considerably more money working in the research institute I lost opportunity to learn about how one of the very successful businesses is run. On the other hand, I've seen a number of places where just systemizing didn't work all that well. Take accounting as an example. The process is well defined (even though with considerable amount of leeway in asian countries), there are formal checks in place like audit, tax checks and so on. Yet I've seen it in quite a mess in a number of places. While there are better accountants just like there are not so great accountants most of them are able to do accounting. The cause was usually somewhere else. Most of the business owners are masters of their trade, they are the masterminds behind the systems and they are the puppet masters running the operation. When it comes to accounting, however, they're lost. So they hire an accountant. And then another. And data entry clerk. And temp staff because of the back log. And still the accounts are in mess. Buying a better (more expensive) accounting system doesn't help much neither. What's missing is usually leadership. It's not an accountant the technician but accountant the puppet master. Human systems don't tend to be as iron clad as the clockwork or jet engine. That's where the 1 obsession of the extraordinary executive (build and maintain a cohesive leadership team) comes from. You cannot be everything to everybody and people are not cogs - you can't just put them in places and expect them to function flawlessly.

I've always believed that you get only as good people as you deserve. And I've paid the price to learn this again and again and again. Most of the work I've been around is not linear. You can hardly say that if one CEO produces 1 mil of profits five CEOs would turn the same company in 5 mil business. Just like if a system takes 1 developer 3 months to develop it doesn't mean it would take 3 developers (offshore or not) 1 month. Just like if one sales person can close deals worth 100k per month it doesn't mean 3 of them will close 300k.

The Chad's article goes on to explain business automation likening it to automation of software development. While interesting to read - this is how software developers must feel when being compared to construction workers :-). I guess (literally guess) that Chad has passed the euphoric stage in his business and tries to see where is all that going. I wouldn't be surprised if it looked awful lot like working in a big company he left, but with way more responsibilities and way less money. That's where I went through the same Freedom musings. Hopefully, I am wrong and the wine and roses will last forever. They didn't for me, though. Time came when I realized that my business was just a business - without the magic IT formula from The 50 Great E-Businesses and instead of counting millions or billions on my account I had (and still have to) change from passionate programmer passionately pursuing his own sweet career to someone running the business. It's not just about me anymore...

Anyway, today I found a book that does a great job explaining just how different running a business is from software development. The book is The 100 Best Business Books of All Time. I am not saying that reading this book or even all 100 books listed will make you the best business person of the century or that it will solve all your problems. I merely believe that reading some of them will help you see what's on the other side and consider it before it's too late. There's a saying that smart people learn from mistakes of others...Never happened to me, but I hear it's great :-)

3 comments:

  1. Peter,

    Thanks for the mention of The 100 Best.

    Two quick things:

    1. Love your bookshelf. If you think we left something out of The 100 Best, share the story of your favorite business book at http://www.myfavoritebizbook.com

    2. We have created another chapter full of industry books that is available as a free ebook. You can check it out and download it at http://www.scribd.com/17729939

    Thanks again!

    ReplyDelete
  2. Hi Todd,
    thanks for the comment
    The picture shows only a small portion of the bookshelf. Since most my the books I buy nowadays are e-books I won't be able to take this kind of pictures anymore :-(

    Anyway, I'll have a look at the e-books, thanks

    Peter

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  3. Chad says "great systems and mediocre people"?

    But which systems are immune to changes?

    And when changes come, what are the mediocre people going to do?

    BTW, I engoy reading your blog. You seem to be an expert on mod_rails in particular.

    ReplyDelete