Why do good people leave large IT companies?

If you want to build a ship, do not call people
plan, share work, get tools.
We must infect people with a desire for an endless sea.
Antoine de Saint-Exupery

I met with my former student, who now works as a financial director in a large IT company. This company is still one of the most desirable jobs in the field of IT. It produces iron with a significant amount of innovation in embedded software and services.

The CFO asked me to stay, since one of the chief engineers came to the meeting.

I wish I didn't do that.
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Transferred to Alconost

An engineer present at the meeting protested against the forced relocation of his 70-member team to the eastern part of the San Francisco Bay area from Palo Alto. “Today, most of my team gets to work on foot or by train. But because of the relocation of the office, they will have to spend 45 minutes more on the road. Because of this, many may leave. ”

The engineer also complained to his boss, the technical director, who admitted that his hands were tied, as this question "concerns the planning of the premises", and the director of administrative support informed the financial director. Thus, this meeting was the last chance for the chief engineer, calling on the financial director to leave his team in the city.

Most of the employees of this company are engaged in production, but the group of this engineer consisted of experienced software developers. Considering that they can get a new job, just showing up at a local coffee shop, I was amazed at the answer of the finance director: “Sadly, we need more space. They are lucky to work with us. And if they leave, then at least they can boast the name of our company in their resume. ”

SHTA ?! I was not sure which of us was more shocked - the engineer or me.

After the departure of the chief engineer, I must have looked quite surprised, because the CFO told me the following: “We have tens of thousands of employees, and at our growth rate it’s almost impossible to continue using the facilities that we have in the bay area. You know, from day one, our general has introduced a policy of "love us or leave us." (Coincidentally, the general was my intern in one of my start-ups more than two decades ago.) I asked: “And now, when the company became public and so big, did the policy change?” The chief financial officer answered: “No, our general believes that our mission is to change the world. And you need to really want to work here, otherwise you will have to leave. And since we receive a lot of CVs from people who want to work for us, he sees no reason for changes. ”

I don’t know what was better in this situation: to think that a policy that could make sense for an improvised startup was now applied to a company with more than ten thousand employees, or that the phrase “... our mission is to change the world . And you really need to want to work here, otherwise you will have to leave ”- this is exactly what I once told my intern, now the CEO of the company.

Control by adults

Prior to the rapid growth of “unicorns” (startups with an estimated value of over a billion dollars), when companies were governed by a board of directors, they “encouraged” hiring people to “control” the founders after they found the product to match the market. Then they believed that the founders were not able to quickly acquire the skills of personnel management, working with finance, sales and the company's board to bring the company to the level of liquidity, and therefore they hired professional managers. These new CEOs would also play the role of a “limiter” to temper the founder’s appetites.

In recent decades, technology investors have realized that such professional managers are effective in maximizing the product cycle, but not in finding them. However, technological cycles are a treadmill, and in order to survive, start-ups need to be in a continuous cycle of innovation. To do this, it is necessary to maintain the culture of startups for many years - and who will cope with it better? The Founders The founders are comfortable with chaos and confusion. In contrast, professional managers try to bring order to chaos and often kill the startup culture itself as it goes. Venture capital firms realized that it was easier to teach the CEO to scale a company than to train a hired CEO to find innovations for the next product cycle. And they were right. This is exactly how it was in the company where I was invited to visit - over the past five years, more than two hundred "unicorns" appeared, and the founders of the majority of them were at the helm.

Thus, this startup was with the board of directors, “friendly to the founders,” who believed that the company would grow faster if the company remained in control of the CEO who founded it. The curved vision of the reality of this founder attracted a large number of employees who shared this vision. It was so convincing that everyone worked hard for a modest fee and some company shares. They were lucky: after a couple of painful years, they found the product to match the market and became a public company. And those first employees received a reward - their shares turned into cash.

The problem was that at some point after the thousandth employee was hired, large payments from primary securities and from subsequent contributions from their initial placement ended. But the CEO never noticed that for 95% of his company, the payments were over. Flying to the remote offices of the company on a private jet surrounded by employees who joined him at the very beginning and are now worth tens of millions of dollars, the general does not even think that the mantra "you really need to want to work here, otherwise you have to leave" makes no sense newly arrived employees.

At that time, the company attracted interns who wanted to write the name of this popular company in their resume. But since wages were much lower than average, they remained exactly for the period that was needed for their resumes to become quite attractive, and then went to a higher paying job - often in a startup.

And since a very small number of leading engineers see this company as a good place to work, the company began to lose its initial technological advantage.

Wake up signal

The flip side of the founding activities of managing large companies is that there are no written recommendations, lessons or a standard model for how to do this. This is not surprising, provided that, in the past, the founders, as a group, were rarely at the helm as startups became big companies. It is difficult to turn the founders, who nurtured their business thanks to their flexibility, tirelessness, perseverance, and often aggressiveness and irrationality, into managers who can stimulate organizational growth.

This transformation means that they need to quickly learn a new set of skills, sublimate their big egos to work through direct reports and understand that the boundaries of their control no longer cover the whole company. They should also learn to build repetitive processes that allow scaling. Sometimes this happens only after a crisis, which serves as a wake-up signal.

Once a startup develops into a company, the founders and the board of directors should realize that the most important changes are not in systems, buildings, or hardware. They occur in the company's most valuable asset - its employees.

The founders of great companies can figure out how to keep their aspirations, but for them people are more important than the process .

P.S

I was able to share this story only now, because the engineer left the company and founded his own startup in another market segment. Over the next six months, 55 of the 70 employees in his group left, who were asked to move. Of these, 25 have joined his new startup. And what about the remaining 30? 6 new startups have appeared.

Lessons learned

• Be careful with the unintended effects of growth.
  
• Recognize crossings in company size
  
• Admit it: what was the engine of innovation, while you were small, as it grows, may no longer fit
  

About the translator

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