Why can’t a HUGE services company grow and retain the best talent in the industry, just the way a HUGE product company could?

November 8, 2007

In the services/consulting space, people prefer and enjoy working for small companies rather than the BIG one’s – which mostly rely on GIGO (GARBAGE-IN and GARBAGE-OUT).
So when a niche company starts growing, they find it hard to retain their best talent – the very people who made the company a NICHE.
We all know that at the end of the day a company is only as good as the people working in it.


Lets see what issues we face when a niche C/S company (a company in Consulting/Services space) starts growing.
But hold on, what do we mean by “growing”? Growing how? Financially or in terms of number of people or in terms of space..?
hmm…isn’t it a no-brainer..? The core motive for the company is to grow financially…just make more profits..but because its a C/S company,
it can’t grow financially without adding  more people and hence more space. If it would’ve been a Products company, they could have addressed growth in a different manner.
Slogg the hell to release the next KILLER APP . And do a good job of selling it and voila, with the same number of people, they could make more money.

But as i said earlier, for a company in the c/s space, this will not apply. they can increase their rates, but its not as sustainable a model for growth as coming out with a next KILLER APP is.
so what happens instead is they are pressurized to get new people onboard who are not as good as the people they currently employ. What can we do – we wanted to grow, so we got new projects, and we are short of people now and the client is breathing down our neck to complete the project. And getting good people is always a bigger challenge. so for now lets just get someone who’s half good as the people we already have and you know *SCALE* these new people to greater heights, hmm…which i reckon is a good thought. Isn’t it..? Well lets say YES for now.

So what happens now? hey..we are growing. we have more projects. we have more people. And more money. hey but there’s one issue.
When we started out, all our developers were top-notch. but as we grew we now have a ratio of say 1:2:4  (top notch:average joe: worse-than-our-average-joe). you know we follow this whole philosophy of scaling people to greater heights. and lets also assume that we reached this ratio of 1:2:4 say over a period of 3 years. Not bad. Our revenues have grown 100 times more and we’are still growing.

So as we keep growing, one of the best talented people working in that so-called NICHE company had enough of it. He Quits.
WTH, now we see a series of exits lined up one-after-another. Almost half of our niche people are leaving.ahh…for the management thats okay..you know nothing much to worry about. they say, the new people have SCALED up to their levels and its an opportunity for them to fill the void of people who’ve called it quits.
so there we go…over a period of time we see that the so-called NICHE company has no more niche people and its more of living over its past reputation. But then for how long. Lets not answer that now.
In the  mean while some new people are paranoid about the attrition and question the management about the retention policies and dispute the management’s theory that the void can be filled by the new people. hmmm…the management gets worried and then comes up with certain measures about addressing it. so they come up with guidelines/policies/councils for addressing  it.
And people take respite in this by thinking that the management cares about the issue and has acted upon it.

Well so over a period of time, we see that among halft the  best talented people we had, half of them call it QUITS. But how come, we had those guidelines/policies/councils etc..for handling attrition. Didn’t we..? Yeah, but you know every person has different reasons for quitting. And as always the management is trying its BEST to address this issue. Just that on the other end, we are getting more projects (which are again yet-another-run-of-the-mill-uninteresting projects) and hence more new people and more money and in terms of money/growth we are doing tremendous. Just that some developers are unhappy with the work they are doing and they want to do some cool-stuff. but the managements asks them “hey but who’s gonna *pay* for the cool stuff…?”…the developers are awestruck… and the management comes says “so you know we can’t do the cool stuffs. But you can do cool stuff on your own at your home…*pet projects* you see!!! ”

hmm…so gradually we see that almost all the best talented people leave the company. And this time when someone raises the concern, the management says, we tried our best, we had so and so policies blah-blah..but you know everyone have their own reason to quit. and then we may ask…is that true..??? aren’t we seeing a pattern here..as we grow, more and more good people leave and this company just becomes yet-another-GIGO.

so what can we do to retain the best talented people…?what do they need…? what does the quality of work has to do with the attrition…?so basically, how can we retain these people and still grow at this pace..? do we have a silver bullet..? how can we feed the ego’s of these niche people who thrive just on the technical challenges..?hey but aren’t we consultants (consultants  – a euphemism for a developer who has to face and handle politics, bureaucracy and less of the technical challenges.) yeah…but the niche people are programmers at their heart and they want to do cool stuff – not just waste their energies on these stupid politics. By doing this, they learn nothing new, hell – they get tired and bored of doing this mundane thing time and again!!! there’s nothing interesting to solve. just to talk to a buch of fools and try to get a lowest common denominator  which will help them do a small part of that yet-another-run-of-the-mill-uninteresting project. that’s all. So at the end of the day, they feel…”to hell with consulting, I CALL IT QUITS!!!”