As always, as the ghost of ob Marley had to bear the burden of his sins for all eternity, so are the organizations burdened with the burden of their debts, and we are not just talking about the type of money. Companies also take other forms of debt, and they can be as burdensome as most financial liabilities. Two of the most unbearable forms are the technical and cultural debt that is collected as a subproject and the investments that companies make on their growth journeys.
This week's episode Three great points, Stanford's Bob Sutton takes us inside a giant Uber swimming exchange, which offers an ideal case study. With its aggravated "broken things" culture and the desire to scale the business as quickly as possible, Uber's leadership has made (and probably failed to make) any number of technical and organizational decisions that will ultimately jeopardize its continued growth and path to sustainability. business: These elections led to the removal of confusion and CEO Travis Kalanick and created a complex mess of technology platform and equally divided organizational culture, both requiring strong and undoubtedly painful processes of dismantling and rebuilding so that the company would not suffer unfortunate processes.
While Uber is an extreme example of how leaders choose to drive the growth of their companies that can come back to haunt them, training is provided for all companies.
In this week's episode, Bob Sutton drives home these three big points:
- Some organizational and technical debt is not only a good thing but it is often necessary.
- You need to be aware that you are accumulating these debts and following the signs that reach the point where you have to settle them.
- As a leader, you may need to create a situation, a burning platform, to mobilize people to pay off your debts.
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Bob Sutton. They had what he called a "spaghetti ball." They took all the different services to order a car, track a car, and it was packed into this big ball. And when some of it was destroyed, the whole thing would go down and it was very difficult to move quickly.
Bob Sutton. They made a whole package of technical and, frankly, legal and cultural decisions that really allowed them to move quickly.
Bob Sutton. (It's) kind of like when you owe a personal debt. You have to pay attention to how many difficulties you have and look for signs, while organizations say it is difficult and difficult to get things done, your best people are frustrated and leaving, your system crashing all the time.
Paul Michelman. I'm Paul Michelman, and this is it MIT Sloan Management Review:& # 39; s: Three great points. Each week we discuss a topic that leaders should be on top of right now and leave you with three ways for you and your organization.
Paul Michelman. Just as Jacques Jacob Marley has had to carry the burden of his sins for eternity, so have the organizations that are burdened with their debts, and we're not just talking about the financial type. There are other forms of debt that companies assume, and they can carry the burden as much as the greater financial liabilities. Two of the most unbearable forms are the technical and cultural debt that is collected as a subproject and the investments that companies make on their growth journeys. Explains Stanford's Bob Sutton.
Bob Sutton. In fact, both stem from the same problem, which is a tendency to impatience and shortcuts so that you can now do the things that will eventually come back to bite you. On a technical level, it tends to use systems such as just being good for some time, or, say, buying a server that will only bring you hundreds of customers when you know that 500 are coming on board. Organizational or cultural debt is similar to the fact that you take shortcuts, but it affects your culture, your organizational structure, so that it damages trust, morals, and communication. So one of the classic things people do (they do) is they will hire people so fast and it won't take them long to train. (They) pose problems to the bodies.
Paul Michelman. Sutton studied the companies' debts, both large and small, both technical and cultural. This is clearly the case in legacy organizations with deeply embedded systems.
Bob Sutton. The number of organizations we have all sponsored that have old pirate systems … I would like to point out that the Internal Revenue Service, as I understand it, needs to be improved so that people can move faster and be more efficient, and everyone is suffering as a result. Or in commercial real estate, most of the building deals that are done to buy large commercial real estate, this is typical of the 1970s with faxes.
Paul Michelman. But this is a bigger problem for new, seemingly more neat organizations that take the risk to scale. Wallpaper baby. Uber: Of course, we know that last year about $ 2 billion in cash was burned, but that is unlikely to take into account the company's total debt.
Bob Sutton. They made a whole package of technical and, frankly, legal and cultural decisions that really allowed them to move quickly. And they especially spent 2017, 2018 paying off the debt they created, doing things that allowed them to move quickly.
Paul Michelman. First, we will take a closer look at the company's technical debts, which are probably more intuitive for most of our listeners. In a new Uber case study written by Sutton with his Stanford colleague Ugie Rao, the authors spent time with Tuan Fami, who took over as Uber's CTO in 2013. Here, Sutton describes the technological confusion he encountered with Pam and how he first applied it. .
Bob Sutton. They had what he called a "spaghetti ball." In fact, they were taking all the different services of ordering a car, tracking a car, software used by drivers, and so it was packed into this big ball. And when part of it collapses, the whole thing will go down. And it was very difficult to move quickly. So, if you will, they have undergone a radical transition because of this technical debt. And they moved on to what they called micro services, where by 2017 we had (available) 3,000 different types of decentralized hunting software designed and developed by different teams. And then you had a number of other technical debts that led to all sorts of coordination problems and all sorts of failures and system failures.
Paul Michelman. These technical decisions made to help the Uber business scale have had some absurd consequences.
Bob Sutton. It took 50% longer to get things done than it really needed. And he used the analogy that I liked, the following: We had 3,000 runners going in 3,000 different directions. And he uses the difference between speed and speed, which is: The average speed was really fast, but the speed of the company was really low, because those speeds were all going in different directions. It is one of the choices they have made so they can move quickly, which has finally come to technically bite.
Paul Michelman. Meanwhile, Uber was quickly accumulating another debt – cultural diversity.
Bob Sutton. Trevis, the founding CEO, spoke of this notion of "always being slow": This idea that we can do what we want in our team, and you know, we are rolling it all out, we're just going to push forward and do everything. Well, because you need more coordination between teams, it becomes a debt. In addition, another form of organizational debt at Uber where they really worked was that they had significantly smaller positions. They were constantly hiring all the people who just didn't have the experience to be able to lead teams and think about the greater good.
Paul Michelman. Now a big question today. Has Uber been able to pay off those debts and make it more sustainable for the organization?
Bob Sutton. Well, first of all, they have a new CEO, Dara, who has changed the culture quite a bit. And you know that in the Silicon Valley we hear some of the jokes: Now, things are slowly going on and things are building. And they are also taking action on technical debts. So, are you thinking about all those magnifying speeds? They set a technical record … which increases people's ability to communicate with each other.
They do, too, and this is a classic treatment, or presumably better for decentralized organizations. They have made something, they call it an arch. But they actually built interdisciplinary teams of people from all different parts of engineering. And their job is, in fact, to go through and look for methods to build a general understanding of the code base so that people can more easily communicate between teams, and people also understand the greater good they are aiming for.
Paul Michelman. But the process of recruiting and hiring also had to be distracted. For the first time out of school a young hired engineer was frozen a little, which didn't have the right experience.
Bob Sutton. They really went to training. And they also changed their performance appraisal system, which was a classification system that encouraged individuality and even dog-to-dog behavior to one that emphasized individuality and background planning and rewarding people for collaboration. By the way, many of these changes are similar to those made at Microsoft. Quite the same as Microsoft has shifted from a backdrop to a more collaborative culture under its leadership, more than a humanistic culture. So there's a precedent for a big, old, stable company that seems to be working there too.
Paul Michelman. It's Bob Sutton, a professor of management science and engineering at Stanford University, who also codifies the "Organizational Change in Design" initiative. For a complete overview of the Uber events, you can link to Bob's website. www.bobsutton.net:.
Well, let's get to the road. The three big points you need to keep in mind about technical and cultural debt
Number 1:Some organizational and technical debt is not only a good thing but it is often required.
Bob Sutton. Proper always with caution, it's like taking out a home loan. Most of us wouldn't be able to buy a home unless we were in debt and taking out a mortgage.
Paul Michelman. Number 2:You should be aware that you are accumulating these debts and following the signs that reach the point where you have to settle them.
Bob Sutton. (It is) true when you owe personal debt. You need to pay attention to how much trouble you have and look for signs, in the case of organizations that say it is difficult and difficult to get things done, that your best people will be disappointed and quit, your system continues. down all the time. These are signs that you are in debt, and you need to do something about it. Make it.
Paul Michelman. Number 3:There are times when a leader needs to create a situation, a burning platform, to mobilize people to pay off the company's debts.
Bob Sutton. If you are heading into a crisis of technical and organizational debt, sometimes take action to get people's attention (in fact) by actually declaring an emergency with a burning platform. This is what we saw in the Uber case in 2017 (when) all the problems started to arise.
Paul Michelman. And this is this week Three great points. You can find us on Apple Podcasts, Google Play, Stitcher, Spotify and wherever subtle podcasts stream. We will be forever indebted to you if you would like to rate our app or post a review on Apple Podcasts.
Three great points produced by Mary Dow. Music by Matt Reid. Marketing and Audience Development by Desiree Barry. Our coordinating producer is Makentz Wise. Three great points made possible by the generous support of Clover. Special thanks to Deborah Gallagher, Laurent Rosano, enn Eiffin Martin, Richard Marx, Michael Barrett and Jin Inet Ramos and Karina van Berkum for all they do to make this show possible.
Thank you for listening.
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