Why IT companies are crumbling

A worker is a source of ideas, not just a pair of acting workers.
Bianta

IT companies are distinguished by high flexibility, the ability to adapt to changing market conditions in a short time, the recent global crisis clearly showed this. In conditions that for companies in other sectors of the economy turned into a reason for a significant drop, IT companies were able to resist and even show some growth. And this is despite the fact that the budgets for IT, of many market participants, during the crisis time, were substantially revised. An important factor that provides the opportunity not only to survive, but also to grow, in my opinion, is the central position of a specialist in the production structure of an IT company. The main costs and profits are largely dependent not on the technical equipment of production, but on people directly involved in the process of creating a product. So, for example, a software development company is able to increase its potential, attracting more specialists to the development and raising their professional level, while for companies from other sectors, the growth will, to a large extent, be associated with the development of the material and technical base. . In the changing market conditions, IT companies can more effectively implement their potential in new promising areas, without a significant increase in costs.

What can break this flexible structure and cause the destruction of an IT company? It is worth noting that in this context, the destruction should be understood not only and not so much the immediate liquidation of the company's business, but also the sure negative growth leading to a natural result. Let's see what is the main feature of such companies. An IT company is in the first approximation managers and directly specialists producing a product or service — various programmers, architects, testers, network engineers, administrators, and other people on whom the company's business depends. Here we will begin with the last.

Will any company pay a person $ 200 million a year? The answer is yes. If this person helps the company earn 400 billion dollars per year, the company will be happy to pay him or her 200 million!
Jim Rohn
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An IT specialist is a person who is open to new knowledge, is in a continuous process of self-study, this is required by the specifics of a rapidly changing world in which he lives and works. What was relevant and modern at the moment yesterday's schoolchild enrolled at the institute will hardly be in the mainstream after graduation. So you need to constantly learn. In any successful team there is a guru - a man, a leader, whose experience is unquestionable, he leads those around him behind him, setting the level to which his less qualified comrades aspire. This person is not necessarily the senior officer, the team is self-organizing and, behind the scenes, will single out such person. And it will not be distinguished by the scattering of fashionable gadgets on the table, but by his experience, leadership, authority and knowledge, useful companies. Over time, its value for the company will only increase. The people involved in IT, as noted above, know how to learn, and they do it all the time. Any project they are working on at the same time acts as an area for applying existing knowledge and a training platform, a source of new knowledge and skills. At a certain stage, the solution of the task for them becomes a game in which an important substitution takes place: it is not the wages that bring more satisfaction, but a working, polished to shine, decision, a bit of nested participation in the total final product, introduced even by the price of infringement of some personal needs. In this case, the employee receives moral satisfaction, assessment of colleagues and the leader, a certain self-confidence, earns credibility, and if they also pay for it, it is so good! Such a person feels part of the team and does not feel the breath of the guard behind his back. And this will be the strongest motivation in the subsequent work and will give the opportunity to earn their “200 million”. Everyone is happy.

Motivation alone is not enough: if you have an idiot and you motivate him, then as a result you will get a motivated idiot.
Jim Rohn

However, it is not always the case that such a guru is in the team. A competent manager must foresee such a situation and either start searching for a person capable of taking the place of a leader, or motivate the team to work in current conditions. However, it is important not to miss. It may be that the team is not able to work effectively in the current composition, and the motivation of employees can lead to the opposite effect. So, it may turn out that a certain, not quite professional and literate person, decides to take a leading position, being seduced by the offered bonuses. And this may cause disagreement of others in view of the groundless claims of the applicant. This situation can occur in any team, but it is dangerous for small IT-companies, since its intellectual resource will become unusable and will not be able to achieve its business goal.

Let's return to our guru. The IT company is successfully operating in the market, the employees are satisfied, business owners tirelessly calculate the resulting profit. But there is one problem - the leader of the team, the guru, some time later reaches the "ceiling" and in the future only gradually loses interest in the project. This point, in my opinion, should be considered the beginning of "negative growth" and the destruction of the company. Here, in my practice, there were two models of leadership behavior, both, frankly, unsuccessful ones. The first model consists in the position of the leadership “we don’t have irreplaceable ones”, in this case the objective need to maintain the motivation of the gurus to continue being in the project is ignored, one high-class specialist is tried to be replaced by “two for the same money”. The second is to try to retain the company, various methods are used: increasing the level of compensation, various preferences, and a fatal step is accomplished - a talented technical specialist is appointed to a managerial position, placed at the head of the team with which he achieved success. A man fed up with the received bonuses does not begin to work better, and it turns out as a proverb: how many wolves do not feed, he will still look into the forest. It is known, it is not necessary to explain that rarely a good “techie” is able to become a good manager, primarily because of the difference in views between these two incarnations on the effective organization of work. The result is the same - the loss of a person who, with his personal qualities, charisma and experience, was able to unite people around him, make a team of them and achieve a goal with her.

And this is the worst that can happen. Despite all the potential flexibility of an IT company, it begins to crumble from the inside. Former colleagues suddenly realize that their inspired work was skillfully heading in the right direction, and the one whom they believed, now controls them. The company loses its most qualified specialists who do not agree with the current state of affairs, the rest are not capable of developing a product or providing a service at the same level, the quality decreases, and as a result, the company's share in the market decreases. There comes a logical end.