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>I wonder when this knowledge will make it back to HBS MBA business school, there are plenty of examples in the market. It has, but there's a fundamental incen

>I wonder when this knowledge will make it back to HBS MBA business school, there are plenty of examples in the market. It has, but there's a fundamental incentive problem that I have to wonder might be a byproduct of how younger people are switching jobs so often. You can get a lecture about long-term growth and read 100 case studies about this, but at the end of the day in order to get promoted in your bizdev/MBA role you have to show some accomplishment that you can quantify and put on your resume. You could probably ask these people if they thought this particular change in this particular manner at this particular time was the best long term strategy for the business, and I'd be willing to bet that a lot would have said "no, but we have to do it anyway."

drawkbox 7y ago
Very true, short term is self-interested and you have to be in today's corporate world, especially in the value multiplication/extraction/funding side. I have no doubt Gavriella Schuster figured it would help her budgets and maybe provide growth through some converted customers. But that is short term as really the licensing model of many systems are dying and no one would ever recommend SharePoint if they couldn't use it for free to develop on and use internally. Some products would die faster without the partner program and the licensing model is ancient due to the cloud in favor of per-use/subscription/SaaS, licensing really only works for consumer products but even then it is tough. Microsoft already knows this as Azure is essentially their main product instead of OS going forward. So this move just seems badly timed. The other reason people are so short term focused, especially in the management/budget side, is that building value takes lots of time and is risky to budgets. Therefore budgets are guarded heavily to focus on P&L which overrides research and the open mode needed to create products. Simply doing something that is short term does damage but ultimately brings in short term gains (budget savings), those results can be quantified and seen as a good short term solution while most of these people are long gone before the network effects of that change are realized. Building value takes time and that is why large companies buy up startups, they are value-focused. Even Apple with the iPhone really used all the R&D at NeXT/NeXTSTEP to move so fast and have such a solid market leading launch. Ultimately value creation rules the world, it is just the value creators are usually overruled eventually by the extractors.
- remarkEon 7y ago
  I agree with essentially everything you said. I'm fortunate enough that the average tenure on/in my team/org is 4-5 years, and we have pretty low turnover - so we actually can at least try to prioritize long term goals. Anecdotally I've seen some nasty feedback loops elsewhere that have caused business objectives to be missed, and lots of people to quit or move. At it's base, it's a culture issue - which like you alluded to comes from the top and is a long term struggle.
cannonedhamster 7y ago
What you're describing are perverse incentives. The incentive to take care of your family or yourself means that you build a career by short term value because that's what gets you promoted. Taking care of the customer or user first is generally a path to stagnation or getting fired in most companies. Directives come from the top, first things that get cut are training and travel, then customer impacting tools, then sales incentives, then the company downsizes and executives give themselves bonuses for "being decisive" to save the company, when all they've done is gut the company of any long term viability for short term stability.
- jrs235 7y ago
  when all they've done is gut the company of any long term viability for short term profitability. Ftfy Edit: most the time short or long term stability isn't provided by such moves.
hibbelig 7y ago
> It has, but there's a fundamental incentive problem that I have to wonder might be a byproduct of how younger people are switching jobs so often. And the young people switch jobs so often because the corporations don't care for their employers less, and the corporations do that because of short term gains. It's a vicious circle. If people switch jobs often, you can't build complex software anymore because it takes time to grow the required knowledge.
wilde 7y ago
Yeah, businesses should value employees who build careers with the company more, but they don’t. Job switchers definitely earn more than people who stick around. https://www.frbatlanta.org/chcs/wage-growth-tracker.aspx https://www.frbatlanta.org/chcs/wage-growth-tracker.aspx

drawkbox 7y ago

Very true, short term is self-interested and you have to be in today's corporate world, especially in the value multiplication/extraction/funding side. I have no doubt Gavriella Schuster figured it would help her budgets and maybe provide growth through some converted customers. But that is short term as really the licensing model of many systems are dying and no one would ever recommend SharePoint if they couldn't use it for free to develop on and use internally. Some products would die faster without the partner program and the licensing model is ancient due to the cloud in favor of per-use/subscription/SaaS, licensing really only works for consumer products but even then it is tough. Microsoft already knows this as Azure is essentially their main product instead of OS going forward. So this move just seems badly timed. The other reason people are so short term focused, especially in the management/budget side, is that building value takes lots of time and is risky to budgets. Therefore budgets are guarded heavily to focus on P&L which overrides research and the open mode needed to create products. Simply doing something that is short term does damage but ultimately brings in short term gains (budget savings), those results can be quantified and seen as a good short term solution while most of these people are long gone before the network effects of that change are realized. Building value takes time and that is why large companies buy up startups, they are value-focused. Even Apple with the iPhone really used all the R&D at NeXT/NeXTSTEP to move so fast and have such a solid market leading launch. Ultimately value creation rules the world, it is just the value creators are usually overruled eventually by the extractors.

remarkEon 7y ago
I agree with essentially everything you said. I'm fortunate enough that the average tenure on/in my team/org is 4-5 years, and we have pretty low turnover - so we actually can at least try to prioritize long term goals. Anecdotally I've seen some nasty feedback loops elsewhere that have caused business objectives to be missed, and lots of people to quit or move. At it's base, it's a culture issue - which like you alluded to comes from the top and is a long term struggle.

cannonedhamster 7y ago

What you're describing are perverse incentives. The incentive to take care of your family or yourself means that you build a career by short term value because that's what gets you promoted. Taking care of the customer or user first is generally a path to stagnation or getting fired in most companies. Directives come from the top, first things that get cut are training and travel, then customer impacting tools, then sales incentives, then the company downsizes and executives give themselves bonuses for "being decisive" to save the company, when all they've done is gut the company of any long term viability for short term stability.

jrs235 7y ago
when all they've done is gut the company of any long term viability for short term profitability. Ftfy Edit: most the time short or long term stability isn't provided by such moves.

hibbelig 7y ago

> It has, but there's a fundamental incentive problem that I have to wonder might be a byproduct of how younger people are switching jobs so often. And the young people switch jobs so often because the corporations don't care for their employers less, and the corporations do that because of short term gains. It's a vicious circle. If people switch jobs often, you can't build complex software anymore because it takes time to grow the required knowledge.

wilde 7y ago

Yeah, businesses should value employees who build careers with the company more, but they don’t. Job switchers definitely earn more than people who stick around. https://www.frbatlanta.org/chcs/wage-growth-tracker.aspx https://www.frbatlanta.org/chcs/wage-growth-tracker.aspx