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I think you're onto something about strong cash cow being necessary but not sure it's sufficient by itself. Culture of accountability is interesting. It sounds

I think you're onto something about strong cash cow being necessary but not sure it's sufficient by itself. Culture of accountability is interesting. It sounds like you have some experience, what does culture of accountability look like vs. not having one?

acdha 4y ago
I think the cash cow creates the situation where this is possible: if all your company does is one thing, everyone _knows_ that they have to keep selling whatever that is to stay employed. Where I've seen things run off the rails is when managers’ personal compensation and career trajectory aren't linked to something measurable like that. When I worked for a modest (~30 person) web development company in the late 90s we had much smaller version of this problem where we had regular customers who would pay us for design and new features on their sites but only one of the 4 founding partners was directly generating revenue (one of the best designers I've ever worked with, who was also good at managing a group). That wasn't Google-level cash flow but it meant there was no question of making payroll, etc. because we had major companies who liked us and were doing regular site design updates, marketing campaigns, etc. all of the time. Unfortunately, we also had two partners who loved haring off after whatever cool idea caught their fancy and weren't as good at negotiating deals as they thought (e.g. one guy would ask us for estimates and then tell us he signed the contract at 60% of what we quoted, with our actual cost inevitably being around the original estimate). They could get away with that for years because the company was cash-flow positive and money was pouring into the field from all of the companies moving their business online and/or burning VC funding (I still remember one guy bragging that they had several million dollars of Sun hardware & an Oracle license before they had started an application). Unfortunately, that let them tell themselves they were better at business than they actually were and that meant that they were really unprepared when the market got harder: there were many stories but the one which epitomizes it for me was one of them _turning down_ a massive monthly retainer from the local NFL team to create new designs, content, and games on their website because the team didn't want to put _our_ logo on _their_ homepage — at a time where layoffs were imminent in the next month or two! What could have avoided that would have been judging performance deal by deal rather than company-wide — if you're losing money on 80% of your contracts, the fact that you have a few which are very profitable doesn't mean you should rest easy. I've seen similar situations in .edu and .gov where the problems were different but came back to the underlying problem that how you got favorable reviews and promotions was not coupled to the mission, and as a support service there wasn't a direct negative feedback signal from that.
- snapcaster 4y ago
  Thanks for sharing, that was insightful

acdha 4y ago

I think the cash cow creates the situation where this is possible: if all your company does is one thing, everyone _knows_ that they have to keep selling whatever that is to stay employed. Where I've seen things run off the rails is when managers’ personal compensation and career trajectory aren't linked to something measurable like that. When I worked for a modest (~30 person) web development company in the late 90s we had much smaller version of this problem where we had regular customers who would pay us for design and new features on their sites but only one of the 4 founding partners was directly generating revenue (one of the best designers I've ever worked with, who was also good at managing a group). That wasn't Google-level cash flow but it meant there was no question of making payroll, etc. because we had major companies who liked us and were doing regular site design updates, marketing campaigns, etc. all of the time. Unfortunately, we also had two partners who loved haring off after whatever cool idea caught their fancy and weren't as good at negotiating deals as they thought (e.g. one guy would ask us for estimates and then tell us he signed the contract at 60% of what we quoted, with our actual cost inevitably being around the original estimate). They could get away with that for years because the company was cash-flow positive and money was pouring into the field from all of the companies moving their business online and/or burning VC funding (I still remember one guy bragging that they had several million dollars of Sun hardware & an Oracle license before they had started an application). Unfortunately, that let them tell themselves they were better at business than they actually were and that meant that they were really unprepared when the market got harder: there were many stories but the one which epitomizes it for me was one of them _turning down_ a massive monthly retainer from the local NFL team to create new designs, content, and games on their website because the team didn't want to put _our_ logo on _their_ homepage — at a time where layoffs were imminent in the next month or two! What could have avoided that would have been judging performance deal by deal rather than company-wide — if you're losing money on 80% of your contracts, the fact that you have a few which are very profitable doesn't mean you should rest easy. I've seen similar situations in .edu and .gov where the problems were different but came back to the underlying problem that how you got favorable reviews and promotions was not coupled to the mission, and as a support service there wasn't a direct negative feedback signal from that.

snapcaster 4y ago
Thanks for sharing, that was insightful