Seth Godin On The High Cost Of Business By Committee
Big company, big stupidity and waste is often the case. In my (repeat) experience, company that won't pay for X will pay three times the cost of X to fix something else they've screwed up by committee. Godin, author of a slew of books on business innovation, blogs:
In my experience, 40% of the fee goes for the work and 60% goes to pay for the do-overs, staffing, project management and hassle that comes from working from big organizations and committees. A lot of small businesses get burned when they charge just the 40% and the client expects that the other 60% comes for free. It doesn't. If you want to be good at this capability, you can. You can buy it and learn it and then turn around and sell your skill. But it's unlikely you will randomly back into it.







This happens all the time in the world of software consulting. It's what I do for a living. I'm a small shop with just a few contract staff at times. But my name's behind it and so the work is done well and I'm super accountable.
Contrast this with the huge consulting firms out there. They always charge 2X, 3X, perhaps even 5X much per hour, are frequently reported by users to NOT do a good job, but senior managers and projects run by committees will keep paying them through the nose because of reputation.
As the old saying goes, "No one ever got fired buying from IBM."
Robert W. (Vancouver) at July 11, 2009 10:32 AM
I'm delighted to be working for a startup with 6 employees and no outside funding. There are essentially no structural limits to being able to execute good ideas. We don't have to run them by a big executive team, we don't have VCs telling us what we need to do. To the extent that things are decided by committee, it's three of us hashing things out over coffee. Our primary competition has a couple of hundred million in venture funding backing them, and I think we actually have a chance to win, as long as we don't play their game. It would be hard to do if we were a bigger company with more tradition.
Cheezburg at July 11, 2009 12:51 PM
If you can write code AND spend time with the users making sure you (and they) know what the user wants, you have a) an enviable skill set, and b) more time than one person usually has. I love working with users, finding out what they do and what their processes are, and then helping them use technology to do things better. But it would be a stretch to even call my programming skills "novice."
This talk of small, start-up companies, vs. big, bureaucratically-intrenched corporations fascinates me. I wonder what y'all think about the role that employment law plays in all of this. Companies with more than 50 employees (or whatever the number is) have to deal with a raftload of shit. It's a wonder they don't just hire all contractors and be done with full-time employees. They end up with H.R. departments whose sole purpose seems to be keeping companies from getting sued for wrongful termination, having to pay unemployment benefits, and covering the asses of inept managers. Small companies just don't have this crap to deal with. Yet if they are really good at what they do, don't they run into a wall/ceiling at some point? Where they need to get bigger, but they don't want to get bigger?
Pirate Jo at July 11, 2009 6:33 PM
The secret, PJ, is to become a sustained organization rather than a growth organization.
This country is obsessed with growth at all costs. Growth is not always good.
I'm a one-man shop. I do what I do very well. And I do just as much of it as I care to.
When I design a program, I don't talk to the managers to find out how to make the user interface, I talk to the users. The managers know what they want out of it, but the line workers are the ones who know what goes IN to it. And more often than not, if they are in a well-managed company, they've already knocked most of the inefficiencies out of their line process. My job is to make a system that doesn't get in their way or slow them down.
And you just can't get that from a megacorp, because they can't afford to care or they end up with the Board breathing down their necks over a few hours of giveaway time.
brian at July 11, 2009 7:51 PM
I'm fascinated by the small company vs big company dynamic too. I work for a small technology company (not as small as Cheezburg's) that's recently added people to take advantage of product opportunities. I think small companies have the most success when they can take a highly qualified person or group, keep them focused on their core expertise and get out of their way. Adding more people requires coordination, lowering efficiency. Past a certain point the overhead of managing management shoots through the roof.
But, some products require more than a small engineering team to develop, and that's how big companies stay in business.
Pseudonym at July 12, 2009 9:12 AM
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