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Working in corporate america: Is it possible to keep your integrity?

This post digs back a bit. I spent about a decade working in high tech. I started out as an engineer, and fairly quickly moved into executive management. Such is life in the start up world. Anyway, the rapid ascent into the board room presented a number of challenges. One of the biggest was dealing with clients (or potential clients) without telling them lies.

Everybody has a different threshold for how far they will bend the truth in order to get what they want. Here are some real world experiences about how the corporate world works…

I was CTO (Chief Technology Officer) at a fairly young company. I was brought on board by the venture capitalist – not the CEO or board, which always makes things interesting. In any case, this company had a software product that they felt was market ready, and they were trying to land their first real corporate customer. The customer in question was a fairly large international corporation, and I was asked to accompany a senior sales rep to provide the “technical background” to help close the sale. After a fairly pleasant morning meeting a bunch of folks and discussing what our product did and what it was capable of, we spent the afternoon with the clients IT department. As the afternoon progressed, it became clear that this particular entity still operated almost entirely on UNIX – the workers had terminals at their desks – not PCs. There was a handful of windows PCs at the company, but thousands of UNIX terminals. Our product only runs on windows. When it finally became clear that there realy wasn’t any need for, or even any way to use, our product at this company, I asked the VP of IT exactly what they planned to do with our product. He explained that as soon as we finished porting it to run on UNIX, our product would be a major component of their infrastructure, and would be used by almost every single employee. I explained to the VP that our product not only didn’t run on UNIX, but that we had no plans to ever migrate to a UNIX platform. Needless to say, the rest of the afternoon was a bit tense, and the meetings ended fairly shortly after that.

On the ride home, the sales rep was livid. I had just “blown” a sale that had been in the works for more than a year, and that represented a huge pile of cash (which our company desperately needed). I was rather surprised at this reaction – I have a very well established reputation of being a straight shooter and refusing to misrepresent products to potential clients. Fortunately the ride back to the office only took about an hour, so things weren’t too bad. When we got back to the office, the CEO called me in to his office and raked me over the coals. I reiterated to him that I would not misrepresent our product, and that I would not tell a potential customer that we were planning something like porting to UNIX when we weren’t (for those of you unfamiliar, porting a large software package to a different operating system is a huge project – in this case it would have taken a year or so if it was all we did). This was one of the reasons that the Venture capitalist had hired me – there had been to many deals that could not be delivered.

In the end, the company tanked – in large part because of deals that had been made that we could not deliver. The Venture Capitalist ended up punting the entire executive staff, selling off the assets of the company, and we worked together to  do what we could to get some of his money back. He still lost about 20 million….

 Another example involes a partnership between two companies. One company had a product that pretty much owned the market at the time. The other company wanted to buy the product, but had to have it translated into about 20 languages (once again, this is not a small project). The companies involved were big enough that they worked out an arrangement, and decided to internationalize the product as a joint venture. I was brought in to oversee the project and to ensure that everything went smoothly. Technically, I was an employee of the first company. I spent the first month or so there learning about how the company operated, reviewing procedures, and pretty much getting immersed into what it took to get things done.

At the end of the first month, I met with the executives of the company, and explained to them that I didn’t see any way that they could meet the schedules that they had agreed to. The amount of work and debugging needed was grossly underestimated, and the efficiency of the engineers was overestimated. I presented a project schedule that I felt was achievable, and made it clear that I could not support their schedule. It was agreed that at the next meeting of the two companies, they would continue to present their schedule, but that I would also present my schedule, with the details of my concerns. There was no effort made to have me modify my schedule. At the meeting, the representative of the second company was very surprised to see the schedule that I presented. My schedule ran 50% longer, and had a very different schedule for when particular milestones would be achieved. Because the second company was planning global publicity and software releases based on the delivery of our product, this was not trivial (my schedule required an additional 9 months to complete the work). We had a follow up meeting where we spent the better part of two days going over both of the schedules in excruciating detail. The goal was not to discredit one schedule or the other, but to determine which was more likely to be accurate. The bottom line was that we had very different ideas as to the effort needed to complete the project. In the end, the decision was made to attempt to meet the faster schedule, but it was acknowledged that the longer schedule was more likely to accurately predict the delivery date. In the end, the longer schedule was off by 1 day, but because both parties were aware of the issue from the begining, there were no surprises, and the second phase of the project was based on my projections.

So what are the big differences between these two cases? In the first, a company was blatantly lying about its product. Even if they had closed the deal, they would never have collected a penny – they had sols something that they could not deliver. In the second case, there was deception involved early on – the “fast schedule” was simply fantasy. When this was exposed, the two companies did a lot of play-acting to find a way to accept the more realistic schedule without outright accusing/admitting that the original schedule was bogus. What was truly interesting about the second case was that both parties knew that the original schedule was bogus (I found this out later), and part of the reason that I was brought in was because it was known that I would present the truth, and that once the truth was out, we could work out whatever we had to make the deal (or the deal would fall through).

So, apparently a certain level of dishonesty is expected in corporate wheeling and dealing. This shouldn’t be a surprise, but what is surpising is that there are well established mechanisms that let a corporation move from the fiction that is needed to “close the deal” to the reality of what it will take – regardless of what the deal said. So, what is the difference between the two examples? In the first case, the client was promised something that the company could not, would not, aad had no intention of delivering. The entire deal was bogus. In the second case, the schedule was bogus, but both parties knew it was, and the schedule was not all that important to the deal. It carried some weight, but it wasn’t really a deal breaker. This is the part that gets me: If it doesn’t really matter, and its not a deal breaker why lie?

My guess is that in the posturing that takes place when a deal of this size is worked out, things like the schedule are used as “negotiating points”. Everyone knows that they are not real, but it makes it possible to “give something up” in exchange for something else. Once the deal is done, these “face saving points” are tossed aside, and with the appropriate political machinations, the truth is brought out in a way that leaves no one offended.

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2 Responses

  1. It seems to me that this sort of inflating of what can be done and when is not a corporate problem, but a human one. Imagine 2 people trying to get a date, and 1 comes out and says everything that is like to be wrong with the relationship, and doesn’t make any extra effort to be attractive and clever at the start. Who gets the date?
    Or on a job interview, does the one who answers the “what is your greatest weakness” question with the truth get hired?

    It is also a problem that appears to be with the exaggerator, but also is the listeners fault. 2 contractors give you an estimate for a job, Smith says he can do it for $500, Jones says $1000. So Smith looks at the work, and if he is honest then even before the job has begun he has noticed enough “extras” (like plumbing or electricity) that bring the job to $1000 or more, but he still gets it, since he is the 1 you are talking to now.

  2. I was more trying to rpesent the difference between the two companies. The first was the archetype for sleazy sales – they would do and say anything to close the deal.
    the second was a more “normal” corporate begotiations. The overall gist of the deal is honest and pretty clear, but there is a lot of dinking around in the details. Everyone knows it, and when something comes up that could have been a major problem (but probably not a deal breaker), or when iot comes out that one of the “details” really isn’t so small, corporate etiquette has ways that the acurate info can come out (like hiring someone like me to run interference).
    the difference is that in the second case, if the company had continued to stick to its fantasy schedule, their credibility would have been shot. The company in the first example WOULD have continued to insist that it could make the fantasy schedule, and I’m pretty sure the deal would have fallen through.
    So, even though the second case included a lot of less than honest detail negotiations, when something turned out to be real, the company was honest enought to admit it, and kick in the appropriate mechanisms to correct the “error” in a way that didn’t leave anyone in the position of having to defend a lie (well, not too hard anyway – just enough to save face).

    I guess the real difference is that in the second case, I can at least recognize the mechanism (and maybe even the need) for this type of fudging in negotiations. Almost all negotiatins involve creting some “freebie” things – things that don’t really matter, but that can be given up to “ballance” a concession. The first company was simply out-and-out dishonest, and even if their product had been truly market ready, world class, etc. etc., they would have ended up tanking simply becuase of the ethics of the executive staff.

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